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The Convergence of Gaming and Gambling in the Cryptocurrency Space

The dynamic convergence between the gaming and gambling industries isn’t a secret, but one thing notable enough is the role cryptocurrencies play in accelerating this overlap, and more so, how it is reshaping both worlds. The symbiotic relationship between gaming, gambling, and cryptos such as Bitcoin, offers players a slew of benefits: increased privacy, lower transaction costs, and quicker payments – just to name a few.

Blockchain-based games are becoming a trend, thanks to the symbioses between the virtual and real economies that they provide. Players can now earn and trade tokens or commodities in-game, gaining real-world monetary value in the process. This concept termed “Play to Earn” has quickly gained much momentum, catapulting games like Axie Infinity to the headlines of gaming and crypto news sites.

According to DappRadar, a platform tracking decentralized applications, as of Q3 2021, blockchain game Axie Infinity counts over a million daily active users and has generated $2 billion in revenue. This represents a mainstream shift towards embracing the economic model that is merged with blockchain gaming.

The blurred line between gaming and gambling isn’t entirely new, although it might be for the cryptocurrency space. Loot boxes in games have been a subject of concern as they can be viewed as a form of gambling. In 2018, Belgium declared loot boxes as illegal under its gambling laws, citing a lack of transparency in chances of winning.

The presence of loot boxes and similar elements that involve risk and reward in games, and the incorporation of cryptos into these mechanisms, bring about a unique blend – a hybrid gaming-gambling ecosystem powered by digital currencies. While it is ethically debatable, it undeniably is another testament to the increasing convergence of these industries.

A closer view into the gambling space has it that online casinos have started to accept and sometimes even insist on Bitcoin and other cryptocurrencies. Traditional gambling’s leap to the digital world was heralded by online casinos, and their further evolution is strongly influenced by cryptocurrencies. Bitcoin’s decentralized nature and anonymity make it a preferred choice for online platforms, offering self-regulation and privacy to players. One such popular platform is bitcoinPenguin, an online casino site that deals specifically in cryptocurrency.

Meanwhile, Bitcoin Lottery – a familiar term within the crypto space operates based on block hashes of predetermined Bitcoin blocks. This allows for a verifiable, tamper-proof way to conduct a lottery, thereby increasing transparency, which is often a common concern in traditional lotteries.

Research by Katie Johnson in 2021 explored the intersection between gaming, gambling, and cryptocurrency, notably indicating a growing trend towards casual gamblers dabbling in the crypto space and gamers moving towards forms of crypto gambling.

The advent of Metaverse further fuels this convergence. As stated by Neil Cross in a recent Forbes article, “The metaverse’s development will have both gambling and gaming implications.” Companies are eagerly exploring these implications, for instance, Decentral Games, a DAO-governed platform. They recently announced a partnership with Atari to bring about a virtual casino in the Vegas City district of Decentraland. Players can bet with cryptocurrencies and utilise $DG as an in-game currency – an indication of how deep the overlap can go.

While exciting, this convergence poses significant regulatory challenges. Bridging the gap between gaming and gambling and adding cryptocurrencies into the mix raises legal and ethical concerns. As regulators grapple with these realities, the crypto, gaming, and gambling world should brace themselves for the upcoming regulatory storm.

As the digital era gallops forward, one thing is for sure: the amalgamation of gaming, gambling, and cryptocurrency worlds is not just difficult to ignore but is creating seismic shifts in the respective industries. It opens a whole new realm of possibilities and the next big thing might just be lurking around the corner.

Sources:

1. DappRadar Q3 2021 Report, DappRadar, 2021
2. Katie Johnson, “Casual Gamblers and Cryptocurrency”, Cryptocurrency Research, 2021
3. Neil Cross, “Gaming, Gambling and the Metaverse”, Forbes, 2021
4. Decentral Games Press Release, 2021.
5. Axie Infinity’s Revenue Report, Axie Infinity, 2021
6. Belgium – Loot Boxes Illegal under Gambling Law, InfoCuria, Case-Law of the Court of Justice 2018

Written by
Johnni Macke
As a critical voice in the realm of cryptocurrency ethics, Johnni Macke commentary navigates through the socio-economic ramifications of Bitcoin gambling, complemented by her active participation in fintech symposiums that discuss the future of blockchain in finance.

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