Blockchain’s Revolutionary Impact on Fintech and Gaming

Blockchain is the technology that underpins cryptocurrencies like Bitcoin. However, its applications are expanding into new areas of retail, healthcare transportation, entertainment, gaming, and finance. Blockchain in Fintech and gaming has been a game-changer. The banking industry alone accounts for around 30% of the global blockchain market value. In 2018, financial institutions spent over $550 million on blockchain-based projects. Blockchain technology adoption in finance has accelerated even more since; its market size in the financial sector is expected to reach $22.46 billion by 2026.

Blockchain innovations and the tenets that govern blockchain technology often intersect gaming and Fintech spaces. This article will explore these intersections and how the principles across NFTs, GameFi, and tokenomics are influencing the revolution happening in blockchain-powered financial technology.

Blockchain Innovations are Revolutionizing Fintech

It’s possible to build an entire ecosystem of fintech applications with blockchain technology. The blockchain can potentially change standard financial procedures into completely transparent operations that are based on secure and efficient transactions.

Blockchain has the potential to revolutionize finance completely. Financial activities on the block are free of intermediaries, completely transparent, and may establish peer-to-peer networks as well as lightning-fast transactions. Thanks to blockchain technology, users can now reclaim complete control of their wealth, laying the groundwork for a completely democratic financial system.

By the end of 2021, there were close to 80 million blockchain wallet holders, further cementing blockchain technology’s influence in the democratization of finance. In particular, DeFi, short for “Decentralized Finance,” threatens to disrupt the global finance status quo. It is a blanket term used to describe the numerous fintech applications built on blockchain technology. The applications reduce or sometimes altogether remove intermediaries in financial transactions, a truly revolutionary concept.

Smart contracts are revolutionizing the financial services industry and will have an enormous impact on industries beyond finance, such as health care and infrastructure. Ethereum, Polkadot, and Cardano are three major smart-contract crypto platforms. To survive, big financial institutions, banks, and governments must embrace blockchain innovations or grapple with the possibility of becoming obsolete. Many large financial corporations are hiring blockchain developers and developing their own blockchain apps and cryptocurrencies.

Blockchain innovations in the Fintech industry address several issues:

• Dependency on a centralized system – Takes power away from third parties and higher authorities that have always controlled the financial sector.
• Lack of transparency – Intermediaries can be biased or withhold information.
• Time-consuming processes – Verification and settlement can take days or weeks.
• High fees – Intermediaries often charge high fees for their services.
• Fraud – The current system is vulnerable to fraud and scams.

The current financial system is ripe for disruption, and blockchain technology is the perfect tool to do so.

The Intersection of NFTs, GameFi, and Tokenomics with Blockchain Fintech

The popularity of NFTs, GameFi, and tokenomics can be attributed to their sharing many of the same underlying principles as blockchain Fintech. For example, all three concepts rely on decentralization, transparency, and immutability.

• Decentralization means that there is no central authority controlling the network. Transactions are verified and recorded on a distributed ledger, ensuring that no single entity can tamper with the data.
• Transparency is another fundamental principle of blockchain Fintech. All transactions are visible to everyone on the network, providing complete transparency.
• Immutability is another essential property of blockchain Fintech. Every time there’s a new transaction recorded on the blockchain, it is impossible to delete or alter it. This guarantees that all the data on the blockchain is tamper-proof.

Blockchain Meets Gaming

The explosive popularity of gaming and the constant evolution of technology has resulted in a new genre of games: blockchain games. These are video games that use cryptocurrency and blockchain technologies to create game economies that are decentralized, transparent, and secure.

One popular example of a blockchain game is CryptoKitties. It’s a digital collectibles game where players can breed, buy, and sell virtual cats. These cats are stored on the Ethereum blockchain, and each one is unique. CryptoKitties was so popular that at one point, it accounted for more than 10% of all Ethereum traffic. The game showed the world that blockchain games are not only possible, but they can be incredibly popular.

Since then, many other blockchain games have been created, such as Decentraland, Axie Infinity, and Blockchain Cuties. These games are pushing the boundaries of what’s possible with blockchain technology and are providing a glimpse into the future of gaming.

Blockchain has many ways it could potentially revolutionize the gaming industry, including:

• Developers may profit by using blockchain to eradicate in-game asset gray market trading, where items are bought and sold outside of the game for real-world currency.
• Blockchain could also be used to create “provably fair” gaming experiences, where the odds of winning are transparent and verifiable.
• In-game microtransactions could be made more efficient using blockchain, as players would no longer have to go through a centralized third party to make purchases.
• The use of smart contracts could automate many game processes, such as the distribution of rewards, and could provide a more seamless gaming experience.
• Finally, blockchain could be used to enable the projection of real value to intangible assets, such as in-game items and currency. This would create a new class of assets that could be traded and sold outside of the game.

Financialization of Games: Fintech and the Gaming Industry

The gaming business has shifted from selling hard copies in retail locations to selling entirely computer-based soft copies, thanks to the advent of internet gaming and greater access to downloadable material. The benefits of online gaming are numerous: it provides a more expansive video game selection for consumers, a spotlight for smaller creators, and the possibility to improve in-game features and enhance user experience via online updates.

However, when it comes to payments, there is a considerable challenge. Standard bank transfers are inconvenient and time-consuming. Fintech provides an excellent solution to these issues; it integrates financial services into games and gaming platforms. This trend of financialization of games is being driven by the convergence of the gaming and Fintech industries. This trend is evident in the growing number of games incorporating Fintech features, such as in-game currencies, trading, and investing.

GameFi, which combines gaming with finance, is based on blockchain networks that aim to marry the fun of playing video games with the financialization of a game’s economy. In addition to allowing players to establish verifiable in-game asset rights, blockchain technology creates marketplace structures that make it possible to trade these assets both inside and outside the game.

In blockchain-based games, players can earn tokens as a reward by dedicating time to level up, finish tasks and challenges, and improve their characters, in what is referred to as a play-to-earn (P2E) model. Tokens on blockchain networks represent all objects in these blockchain-based games.

You’ll need to purchase these locations and characters to play the game. If the popularity of the game increases, so will your game accessories NFTs. So, you or someone else playing the game can own every armor, sword, or plot of land in the game; every gamer inside a blockchain-based game is both a player and an owner.

Games have diverse narratives, but they all include resource accumulation. Excellent gameplay allows you to increase your in-game money (fungible tokens) and in-game assets (armor, attire, items, land), often represented as non-fungible tokens (NFTs). What makes blockchain-based games different is that after you acquire assets, you can decide to trade them for fiat money or other cryptocurrencies.

Conclusion

Already, blockchain is being used in fintech to develop new payment systems and platforms that are more secure and efficient than existing solutions. In gaming, blockchain is being used to create new platforms that give gamers more control over their in-game assets and experiences. With so much potential, it’s no wonder that blockchain is being called the “Internet of Value.” We can only imagine the kinds of innovations that will come from its continued development. 

Blockchain, a disruptive technology that has the potential to transform many industries, is still in its infancy. As it matures, you can expect to see many more innovations as creative minds find new ways to apply blockchain principles in the creation of new use cases and solutions that’ll transform how we live and work.