FOMO: The rise of crypto rewards in gaming

Hello and welcome to our regular teen show where we have an avid gamer and crypto curious 16-year-old called William joining us. For those of you not in the know, crypto is increasingly being used within popular games as a form of currency.

So, William my first question is why would games pay people in crypto?

Lots of games already have some form of in-game currency, for example V-bucks in Fortnite and robux in Roblox.

These are used to pay for things like new skins, upgrades, and to reward other players. They are bought with real cash.

Now we are seeing web3 games let players earn crypto by completing quests or outperforming other gamers.

The great things about it is that players who earn their own crypto are free to sell it to others.

And this is known in jargon as Play-to-Earn games?

Yes, that’s right. Players are incentivized to play and are rewarded with cryptocurrency and NFTs. Play-to-earn means that rewards given to players have real world value, not just in the game itself.

The game developers earn money through advertising and selling items. And some of these earnings are passed on to players by rewarding them with virtual assets.

How can you earn assets while playing crypto games?

Most play-to-earn games have specific methods to track players' earnings. For example, a blockchain-based trading card game may reward players with a specific number of cryptocurrency tokens for every opponent they beat.

You can also earn rewards by leveling up your in-game character. For example, a blockchain-based role-playing game may reward players with in-game items each time they level up.

These in-game items are often minted as NFTs that can be sold on the secondary market.

So, can I earn real-world money?

Players can be rewarded with cryptocurrency or NFTs. These assets can then be exchanged for stablecoins or fiat currency, basically dollars that can be spent in the real world.

In the early stages of gameplay, you tend to earn fewer assets, meaning you'll make less money by playing. And you need to remember that the asset's value can decrease over time, much like stocks and other cryptocurrencies.

Great. So, how do I get started?

You'll need a cryptocurrency wallet to play blockchain-based games. But before that, you may want to start by identifying a few games that interest you. Once you know which game you want to play, you can find out which crypto wallet you'll need.

Axie Infinity is a really popular game and uses the Ethereum blockchain, so you will need to have an Ethereum wallet, such as MetaMask.

After creating your crypto wallet and storing your wallet passphrase in a safe place, set up an account on the game you have chosen. Some games require software, while others are web-based.

Be aware that some games require players to buy digital assets before they can play. For example, you may have to buy a character NFT or token before interacting with the game.

And what are the risks?

OK. So, if you play games on different blockchains, there’s a risk of sending your tokens to the wrong wallet. Before transferring tokens from one wallet to another, double-check the address to make sure it can hold the tokens you're sending. If you send tokens to the wrong wallet, you cannot retrieve them.

Scams and hacks are another thing to consider. So never share your wallet passphrase. If someone else obtains your passphrase, they can use it to steal your tokens. You must also be wary of games that seem too good to be true. They usually are just that, not true.

And as I mentioned, the value of the crypto earned can easily fluctuate. If a game's popularity declines, the value of its associated assets will probably decrease too. That’s what happened to Axie Infinity in fact.

So just give us a quick summary?

Play-to-earn games are really appealing to my generation, offering players a way to earn money by playing the games they love. But I suggest getting a basic understanding of blockchain and cryptocurrency wallets before you start.