Crypto Academy Articles

How To Invest in Crypto Gaming Coins

October 30, 2022

What Is Crypto Gaming?

First of all, what is crypto gaming? In a few very simple words, as the name seems to suggest, crypto gaming is the marriage of cryptocurrencies AXS, NFTs, and the gaming industry.

In many online video games nowadays, in-game commerce is a rather common experience. In fact, in most of the latest offerings from major gaming companies, players are expected to earn money within the game by accomplishing various mission objectives and by interacting with other characters in the game. Doing so will enable players to upgrade gear, purchase materials and mounts, and enjoy a dynamic gaming experience.

Sometimes, this latter activity of interaction with other characters is possible with other real players — that is, other human beings, as in the case of MMORPGs (“multi-player online role playing games”) for the uninitiated. In such online games, as is natural to human instinct, a market develops where different players trade with each other for the assets that they need in return for in-game currency and other tradeable items determined by the game developers.

These in-game items often increase in value because of their rarity or their popularity, and their value can inflate among the players of the game. Because of this economic reality in the games, the game markets can often intrude upon the real markets outside the game when players who have valuable items trade them for real-life currency. What ends up happening is that the digital world peeks its head out into the real world.

Where Does Cryptocurrency Come In?

This is where cryptocurrency comes in. Cryptocurrency inserts itself behind the market operations of in-game trades and purchases.

What if the in-game currency that the players of the game can earn has actual real-world value and can be exchanged outside of the game? What if the items themselves can also hold value and are able to be purchased and sold in a marketplace outside of the game?

Furthermore, as people become interested in the currency of the game, and therefore, as they have a higher view of the game currency, the value of the in-game currency will also go up.

The result? The cryptocurrency of the game, or the crypto gaming coin, rises in value. This is blockchain-based gaming in a nutshell.

Games where the player can earn money simply by playing games are called, “Play to Earn” games, or P2E games, such as Axie Infinity. This term is a relatively general term that can be associated with any game where the players have an opportunity to earn money by playing the game.

Sometimes, the money can be earned by finding and selling rare items in the game (in the form of NFTs). Other times, the coin can be earned simply by playing the game — that is, by performing certain activities within the game, money may be added to your crypto wallet!

Crypto Is Not Always Tied to the Currency of the Game

The crypto used in games does not always have to be tied to the currency of the game. Another way in which crypto is employed in games is through non-fungible tokens (NFTs).

Non-fungible tokens are simply cryptographic identities (often merely some unique identification number that is on the blockchain) that are tied to a certain digital object such that whoever owns the NFT becomes the “sole owner” of that digital item. In other words, the non-fungible tokens in NFT games can be thought of as the digital equivalent of a title or a deed attached to a physical item.

These NFTs, though seemingly insignificant at first sight, can become immensely valuable when marketed and traded properly. For example, a collage of works made by Beeple, or Mike Winkelmann, a digital artist, was sold at a staggering price of $69,346,250 at Christie’s.

Some Examples of Crypto Coins on the Gaming Crypto Market and How To Trade Them

Some games that employ crypto gaming coins highest on the list according to the volume being traded, on cryptocurrency exchanges, are ApeCoin, Decentraland, and The Sandbox.

ApeCoin

First on our list, ApeCoin is not a gaming coin per se. It was created by Yuga Labs after they generated 10,000 NFT images of various iterations of a cartoon monkey (or rather, apes) on the Ethereum blockchain called Bored Apes Yacht Club (BAYC).

These NFTs of apes are not themselves the coin, ApeCoin, but the prominence of these art pieces as NFT made the affiliated coin, ApeCoin, rise in value. Because Yuga Labs and Bored Apes Yacht Club became so valuable in the public’s eye, ApeCoin, which Yuga Labs issued subsequent to the release of BAYC and related NFTs, rose in value significantly, eventually reaching an impressive market cap.

ApeCoin is not in itself explicitly a coin that is tied to a gaming platform. Rather, it is a coin that links the holders of the coin to a community. By buying an ApeCoin, the trader is able to participate in a broader community and ecosystem into which pay-to-earn games can participate by allowing players to earn ApeCoin as an in-game asset.

If you desire to get into investing in crypto gaming coins but are a little wary of the whole gaming environment that substantiates the coins, this may be the way in. ApeCoin seems to provide an experience of crypto gaming coins that is perhaps most similar to the common cryptocurrency.

DecentraLand

DecentraLand, unlike ApeCoin, is a coin that is directly tied to a gaming experience — a metaverse of sorts is created. In this gaming environment, players can explore lands, create items, and most importantly, trade digital assets within the game with other players and participants in the market.

DecentraLand’s token, MANA, is the in-game currency that is built on the Ethereum blockchain. This coin, like any currency in real life, can be traded between players in-game, and also in coin marketplaces. Furthermore, these are the coins that can be exchanged for NFT in-game items and even digital real estate.

An interesting application of this digital, virtual marketplace that has developed in games like DecentraLand is that now there are attempts at incorporating digital contracts into real estate (real real estate) which may offer great benefits and functionalities to the industry. Some such benefits may be to avoid disputes and fraud and implement fractional ownership.

The Sandbox

The Sandbox has a very similar basis to DecentraLand for its cryptocurrency. The Sandbox is also a game, a metaverse, where the players may play games to earn their NFTs and to trade in the marketplace with their in-game currency. In fact, in The Sandbox, you can create your own NFTs with their editor to play and trade their “Vox Models.”

Now, depending on the popularity of your Vox Model, you may be able to trade your NFTs for SAND. SAND is the in-game currency as MANA is to DecentraLand, and SAND is also built on the Ethereum blockchain. Again, similar to how MANA works, SAND can be traded both within the game for NFTs or outside the virtual world of The Sandbox in cryptocurrency trading platforms.

Finally, the last way a player or a trader can participate in the crypto gaming coin world of The Sandbox is through the purchase of LAND. As the name aptly suggests, LAND is a piece of “land” in the universe of The Sandbox. LAND is not like SAND, a coin, but similar to Vox Models, is a special NFT. Therefore, it can be purchased for the game experience and also traded between players and traders.

Another example of a game that has employed a crypto gaming coin is the new game, Realms of Ethernity, which is backed by Polygon, and has various NFTs that the players can earn throughout their gameplay. An example of these NFTs that are found in the game is “Wanderers,” which are mounts that the players can raise and evolve to benefit their gameplay. Yet another very integrated example of a crypto game coin is Aurory.

A Summary of How To Invest Crypto Gaming Coins

Collating all the ways of earning and trading crypto gaming coins from the above examples, we can see that there are ultimately five distinct ways of investing in and trading crypto gaming coins:

Play the game to earn and trade in-game currency
Trade in-game currency in cryptocurrency marketplaces
Create NFTs to be used as a part of the game (and sell it)
Collect NFTs from the game
Trade NFTs within the game environment

Of course, these ways of investing and trading crypto gaming coins ought to be combined in order to have the greatest profit. The investor (or rather gamer) who plays the game to earn the in-game currency to buy in-game NFT items with that currency and sell their own created NFTs are the ones who will have the valuable NFTs that they have collected throughout their experience in the game environment.

It is this player who knows the game environment in and out who will also be able to shape the game and the outside market in such a way that their tokens and their in-game currency will have a high yield in the end. Just as a great product is often the culmination of the inputs and marketing of great users, so is a crypto game coin a great investment when the investors are passionate about the product.

Integrated participation in the crypto games behind each of the crypto game coins is the design that was originally intended by the makers of the games. What these crypto games often desire to do is to create an ecosystem, an environment, and a community, where the holders of the cryptocurrency, whether NFTs or coins, may be able to have a part in the market they wish to grow.

Conclusion

When all has been said and done, a crypto game coin is basically a coin, a cryptocurrency, or a digital item on the blockchain, that is able to make a mark on the game environment which stands behind it. It is a fascinating application of cryptographic blockchain technology that takes advantage of the human desire to simulate and enjoy life through games and art.

Furthermore, as seen with examples such as real estate, crypto game coins have an influence on simulating and exemplifying how cryptocurrency, in general, can have an influence on real-life operations that we have never dreamed would have been integrated with the digital world.

There are many ways you can integrate yourself into this little digital universe of games — and perhaps for the well-seasoned investor, the best way is to get a sense of its value by participating in the games indirectly by following the coin market from the outside.

You can learn to buy and sell crypto game coins and the NFTs that are produced within the game on external trading sites. And when you have become accustomed to the movements of these crypto game coins, perhaps you can have a hand in influencing their growth by playing around in the game universe for yourself!