The current limits to payment scalability in the blockchain might make creating a profitable blockchain-gaming system impossible.
A profitable gaming system would require the ability to accept payment from hundreds, thousands, or even tens of thousands of players at once. However, Bitcoin blocks are limited to between three and four a second, or 180 or 240 purchases a minute. Ethereum is slightly better; it can handle around 20 transactions a second, or 1,200 purchases a minute.
As a result, cryptocurrency users must pay high-processing costs. In December 2017, Bitcoin users were paying between $20 and $55 to process a transaction that took 30 minutes to complete, No wage earner is going to pay $55 and wait 30 minutes just to get access to his favorite strategy game.
These restrictions present a huge barrier for game creators. This is particularly true for creators seeking to produce the next League of Legends game. The game attracts over 27 million players a day and 81 million participants a month (estimated).
Unfortunately, games that accept cryptocurrency do not need League of Legends level of play to crash a cryptocurrency wallet. Simply attracting 2,000 or 3,000 users an hour would overwhelm and possibly crash an existing Ethereum and Bitcoin wallet.
Are Lightning Network and Raiden Network the Answer?
Sidechains like the Raiden Network for Ethereum (ETH) and the Lightning Network for Bitcoin (BTC) offer a possible solution. A sidechain bypasses the Blockchain with a different network of nodes and thus offers users far higher capacity and scalability.
Indeed, the Raiden Network is designed to transfer thousands of micropayments a second. It appears to be an ideal solution for a games company seeking to sell thousands of hours of play at a few dollars each.
However, this solution is still on the drawing board. Neither Raiden nor Lightning has been even beta-tested for mass payment (beta-testing of the Lightning Network only began on March 15, 2018).
So it might be months or years before we know if sidechain technology actually works. For now, game operators will have to look elsewhere for a payment solution.
Is Ripple the Solution?
Other cryptocurrencies may offer solutions for monetizing blockchain gaming.
A likely candidate is Ripple’s xRapid, a conversion app that quickly converts XRP into local fiat currencies. As the app operates outside the blockchain, fast payment with Ripple is entirely feasible. However, Ripple’s utility with gaming is unknown and may be somewhat limited. For instance, the volume of transactions that can be processed by xRapid is unknown. Although many banks and other financial institutions have signed on to use Ripple, only about 61 Japanese banks have signed on to use xRapid.
While Ripple seems tailor-made for online gaming companies, its primarily designed to facilitate foreign exchange transactions. And yet, its high liquidity is what both gamers and games-creators are seeking.
A Chinese Company Offers New Features
Built by the Chinese gaming shop Mob Arts. 777.Bingo may have help gamings scalability problem. Mob Arts has a lot of resources; as it is backed by China’s publicly-traded social media giant Tencent Holdings (HKG: 0700). Tencent is a major player in games. The company’s Chief Strategy Officer has revealed that the business plan for 777.Bingo is to accept cryptocurrency payment for games that are distributed via the internet.
The whitepaper for 777.Bingo shows symbols for Ethereum (ETH), Bitcoin (BTC), and the Qtum (QTUM) cryptocurrency. Details of its SDK (Software Development Kit) are not provided. However, 777.Bingo employs Ethereum and will include an ERC20 protocol utility token called 777. The token will serve as a rewards points system for gamers. And its possible that Qtum will provide the payment solution.
Intriguingly, 777.Bingo is ignoring the ICO market. Instead, its conducting private placements of the 777 token on various exchanges. Ironically, neither U.S. residents nor citizens of the People’s Republic of China will be able to buy 777 tokens because of legal restrictions.
At present, it sounds as if the 777 token is intended as nothing more than a payment system for gamers (and not a cryptocurrency). 777.Bingo will include an “app store” for gamers known as the Bingo Store (and one that any game developer will be able to participate in). Conceivably, developers would be able to receive payment in 777 tokens for games sold through the Bingo store.
XTRABYTES is the Wildcard
One wildcard in all of this is XTRABYTES. Being code-agnostic and having an expected 10,000 transactions-per-second, the platform will provide immense scalability for gamers. It will be also able to host a variety of gaming tokens – all tradable on X-CHANGE. And any gaming-related modules that developed will be able to work in conjunction with XTRABYTES other modules (X-PAY, X-CHAT, X-VAULT, etc). All on a very attractive GUI named XCITE
The platform’s mainnet is expected to launch soon, very likely after the technology receives patent-pending status. The gaming community might be very surprised to find its best solution is hosted outside gaming industry solutions.
Would you like to know more?
We don’t just publish articles, XTRABYTES is a whole new blockchain platform that allows DApps to be programmed in any language, utilizing a new consensus algorithm called Proof of Signature. In doing so, XTRABYTES presents a next – generation blockchain solution capable of providing a diverse set of capabilities to the general public.