Crypto Never Took Off for Gaming Transactions: Here’s Why

People understandably have mixed feelings about cryptocurrency and its potential use for gaming transactions and more. For some, albeit a minority, it remains the future of finance, whereas for others, the economics of the industry are all wrong, and it represents something akin to a Ponzi scheme. We aren’t here to debate those points today, but rather to discuss a specific use case for crypto and gaming that was once lauded as a possibility, yet broadly failed to materialize.

The idea that crypto payments would form the backbone of gaming payments, including in-game transactions, gained a lot of credence in the late 2010s and early 2020s. And you could see how the argument was compelling, especially as transactions would be recorded on the public ledger of the blockchain, not to mention the fact that the middleman of banks would be cut out.

Crypto solved a problem that did not exist

So, what went wrong? Well, the first thing to say is that crypto faced that classic problem that thwarts many tech startups – trying to fix problems that don’t exist. There are many ways to pay for gaming, and the vast majority are swift, free and secure.

Understandably, there might be some reluctance for gamers to constantly dip into their bank accounts for each transaction, but such issues have been solved with payment wallets. This is one of the reasons that PayPal casinos are so popular, for example, as players can move funds instantly, securely, and for free to the iGaming platform and back again.

Secondly, and this is something that has always blighted the crypto sector as a selling point, is that there are usually fees associated with moving crypto. Many crypto enthusiasts laud the sector for its ability to move money faster and cheaper, but this is only true under certain conditions. The bottom line is this. If you want to use PayPal to send your buddy $10 for a round of drinks, it’s free. If you want to send them $10 worth of Ethereum, it isn’t. The same rule applies whether you are depositing at a casino or buying V-Bucks in Fortnite.

Crypto added to the friction instead of taking it away

In short, then, crypto added friction instead of taking it away. Might we make an argument on why it could still be a useful gateway for gaming payments? Well, there is the ubiquitousness of crypto in the sense of being without borders. PayPal is not available in every country, and crypto can remove barriers to regional restrictions in payments. It can also, in theory, lower costs for the gaming platform, as they won’t have to pay bodies like Apple (Apple Pay), PayPal and Stripe. Those costs could be passed on to players.

Yet, we’d argue that there is also a lack of trust between the traditional gaming community and the crypto-gaming movement. Many saw the idea of NFTs and P2E (play to earn) games as tasteful due to their speculative nature, and some even saw it as a cash grab. The decline of NFTs and P2E games in recent years seems to underline that fact.

It remains to be seen what will happen in the future, but most gamers would agree that they do not need to use crypto to move money, and it’s hard to see that changing anytime soon. Until crypto comes up with a solution to a real problem – like making gaming cheaper – then the idea of it transforming gaming and gaming payments will remain firmly on the drawing board.

Source: https://gamespace.com/all-articles/news/crypto-never-took-off-for-gaming-transactions-heres-why/