True ownership needs provable on-chain assets

tl;dr: for true ownership in blockchain games, the assets and the state must be on-chain.

There is a thriving online game industry where game assets can be traded for real world money. Some people even make a living from buying, selling, and collecting these assets. All of that is despite the fact that the players never truly own those assets.

In-game digital assets are owned by the development companies. Players are essentially trading access to particular sprites but never truly owner the items.

Blockchain gaming could be different. In-game assets could exist on-chain with a provably claim to ownership. For blockchain technology to be most effective in gaming, it is not enough to simply associating game items with tokens. I think this concept of provable ownership is also true for many use cases beyond gaming.

In this article, I will outline why the game state must be on-chain in order to enable true ownership. Anything less is not good enough!

Previous posts in this series

Feel free to skip this recap section!

This piece is the fifth post in a series of related articles on blockchain gaming.

In these pieces I argue that interoperability between blockchains will allow for interesting and advanced cross-game / cross-chain interactions. For this to be a reality I think the game state should exist on-chain.

The governance of these games should be on-chain and will probably require some sort of DAO to aid development costs. Also, in order to incentivise decentralised hosting, the nodes in the network should receive a reward.

Old Model — Glorious games of days long past

In the opening paragraphs of this post I outlined the old model of ownership for online games. The assets found in online games are owned by the development companies. These assets include:

Consider the amount of time players have spent while grinding out skill levels. Gah! I remember spending months grinding in the classic days of Runescape. Despite spending too much time leveling up my character or collecting rare items in online games, I never truly owned those assets.

RuneScape classic. Those were fun times. (source)

Players are essentially trading access to particular sprites but never the true ownership of the items. The development company behind Runescape have forbidden the trading of game characters and items for real money. Some of the items that players have collected are worth thousands of dollars that, in theory, can’t ever be sold. This does not feel ‘right’ to me.

Why should we allow asset trading?

By allowing players to trade their assets for money, they are trading the time they spent acquiring the items for money that can be spent elsewhere.

Monetary Release — Once we eventually get bored of a game we should be allowed to leave with our money / time spent. Should we need to reclaim our money spent in order to pay for something important in life, then we should have that option.

Closing the gap — New players who join a mature game will be at a huge disadvantage to the old school players. While it is naturally right that long-time players are stronger; communities have difficulty in sustaining themselves if new players are too far away from the top players. They will never be able to play together. Allowing item trading can help to close the gap. I will note that games like World of Warcraft have level skipping which also helps.

Indie Game Development — Perhaps a less well-known angle to allow for item trading, but allowing players to buy and sell items can help to attract funding at an early stage of development.

This was part of the reason that players pledged thousands of dollars for the indie game Shroud of the Avatar. There was a notion of ownership and being able to game items for real money once the game had launched. Early backers took the risk that their items would be worth more in the future.

SotA raised almost $2 million on kickstarter.

Ownership — Shouldn’t the items simple be ours if we pay for them? Regardless of the reasons for buying or selling, we should have the freedom to do so.

The major problem of these legacy games is that developers can eventually ban item trading, or should the development company shut down then all the items and their value will disappear!

New Model — Our exciting blockchain future

The future of online gaming must make full use of blockchain technology in order to overcome these problems. However, for blockchain technology to provide a notion of true ownership the gaming assets must exist on-chain. It should not be possible to sell the items without selling the on-chain token.

What features must a blockchain game provide in order to ensure true ownership?

Visualising the concept of a Web 3 Game (thanks to my colleague Iggy, Web3 Foundation).

Provably Unique

I don’t know of a single game where you know how many game items assets really exist. This isn’t such a big problem whenever the games and item markets are behaving normally, however the problem is pronounced when item duplication runs wild and the price of the items plummet.

This seems like a natural problem that blockchain can solve.

I’d want to be sure that the items I own own can’t be duplicated at will by the game developers or via an exploit. If I own 1 out of N swords, then I must be able to prove that there are exactly N swords at any one time in a trustless manner. To make this happen, game items will need a unique ID (c.f. NFTs). The items would be fungible, but the IDs prove uniqueness.

Why will this be beneficial?

I do think it requires putting the game logic on chain. Having a proof of uniqueness will help to maintain a healthy economy. Whenever in-game economies die, the longevity of the games tend to decrease.

In a related post by Hoard Gaming: “How to build a robust game economy: Lessons from one of the world’s longest running MMOs”. It covers true ownership of in-game items, as well as the necessity of getting the in-game economics correct.

Provable and Enforceable Ownership

If assets are merely represented by an associated token without proper enforcement then we don’t have a guarantee of ownership. Fortunately, we know that blockchain technology allows us to cryptographically prove ownership of tokens in an open and permissionless system.

If my bitcoin can’t move without my permission, then neither should my gaming assets. Conversely, should I want to sell my assets then I must be allowed to do that. Having the game assets on-chain will mean that this is always possible.

Why will this be beneficial?

I think people will be more willing to help pay for game development when they have the ability to trade their assets. Just think on crowdfunding an indy game via kickstarter. It isn’t so different to an ICO. People help crowdfund games when they see a benefit to purchasing early: e.g. improved backer rewards.

An additional benefit of allowing item trading is that players can recuperate their ‘investment’ should the game turn out to be different than expect. This is attractive as it can decrease risk. If you spent thousands of dollars on a game, you really want some way to sell the items and lower risk. This is the monetary release that I mentioned above, and I believe this can help indy game developers by allowing players to make larger initial investments because the risk of locked items is reduced.

Get building! How to create “CryptoKitties” on Substrate

Speaking asset ownership, there is now a workshop for building a game on Substrate (created by Shawn Tabrizi at Parity). This is exciting as a gaming chain built with Substrate can be connected to Polkadot in the future (see previous blog).

Substrate Collectables Workshop — created by Shawn Tabrizi

What I like about this workshop is that the entire game state is on-chain and the code is, of course(!), open source. I didn’t even know this was being developed until after I wrote my previous blog (published 9th Jan).

To try out the tutorial follow the link below:

This is an interactive hands-on self-paced workshop. You will learn how to build your first blockchain using Substrate, the OpenSource Rust Blockchain Development Kit by Parity. Through the lessons of the workshop, you will build a collectables blockchain — a chain that creates assets, and allows you to interact with and managing ownership of them.

Up Next…

I have a pretty wild idea brewing in my head that I don’t think anyone in the blockchain gaming space has touched upon. Always a nice feeling to be first! Hopefully, I can bash out the idea and get it on to ‘paper’ in the coming week. Stay tuned!

About me

Currently, I work at the Web3 Foundation, covering numerous responsibilities (such as grants, communications, and collaboration). This blog is of a personal nature. It just so happens that my hobby aligns with work.

One of the main projects of the foundation is the Polkadot network. A next generation blockchain platform. To read more about the innovation that Polkadot is bringing to the blockchain industry I invite you to read the following blog post: link.

Questions / Comments?

You can create a reply to me here on Medium, or reach out to me on Twitter: @EAThomson.

Blockchain, Gaming, Web 3. (previously: