What are the differences? By DailyCoin

Video games as a form of entertainment have been around for more than half a century already. The first commercially successful arcade machine, Pong, celebrates 50 years this year.

Compared to this, crypto games are a completely new field. It started in 2021, with a chain of events: the NFT boom, Axie Infinity’s popularity, the rise of blockchain games, Zuckerberg’s announcement of Meta and the metaverse boom.

Since the field is still young, there is still a lot of confusion. And one area of ​​differentiation comes with understanding the following: Play-to-Earn, blockchain games, GameFi, NFT games, metaverse, Web3 and Web 3.0.

The “chicken or the egg” dilemma: What are NFT games?

According to some sources, including Wikipedia, the first widely known crypto game was CryptoKitties. The main purpose was to collect NFT cats and breed them to get more and more unique and rare species. I know, there aren’t enough games to be exciting, especially knowing good examples of collectible Tamagotchi-like games, such as Neko Atsume.

But the purpose of the first NFT games, including CryptoKitties, was to apply blockchain technology to the gaming field. It was the first game where you could own your characters as NFTs and transfer them to other platforms, such as marketplaces. However, pioneers are not perfect.

Also, the idea of ​​the blockchain, which the NFT games were built on in the beginning, was created by Vitalik Buterin after he lost his character’s gear after an update in World of Warcraft. He understood that digital artifacts earned with “sweat and blood” could easily be taken from you by developers if the project is highly centralized.

Thus, non-fungible token (NFT) technology, which provides “real” ownership, appears to be the most suitable for the gaming field. CryptoKitties was solely focused on collecting and creating new NFTs. Moreover, the logic of the game was fully based on blockchain technology.

Therefore, an NFT game is usually an idle game for the purpose of collecting NFTs.

Play-to-Earn is not always about crypto

Unlike the first NFT games, they took a step next to being built entirely on the blockchain. Yes, the gameplay was similar to NFT games in the beginning. However, the logic of the game was not entirely on the blockchain anymore.

Also, with the introduction of an internal crypto-economy, the game expanded its earnings mechanics; now the way to make money is not only by breeding Axies and selling them on a marketplace, but by grinding internal currencies, Smooth Love Potion (SLP) and Axie Infinity Shards (AXS), and trading them into stable coins in the internal decentralized exchange, Katana.

At this point, Axie Infinity became a “real” money-making game. So we reached a point where it is very important to mention one thing.

Games to earn is just a monetization model, not a game genre.

Many MMORPGs used fiat-based auctions or secondary markets, before the existence of crypto games. Technically, they were pure play to earn. However, the marketers of crypto game projects used the term too much, so it became associated only with blockchain.

In some cases it even acquired negative connotations. For example, Steam banned all games that used cryptocurrencies, not even differentiating games built on a blockchain or using crypto as an addition to other game mechanics.

The term “play-to-earn” came from the names of other monetization models: free-to-play and pay-to-play. In turn, Play-to-Earn spawned its variants, such as Move-to-Earn, Sex-to-Earn, Learn-to-Earn, and so on.

Crypto Gaming vs Blockchain Gaming: What’s the Main Difference?

Without a doubt, crypto games and blockchain games seem like the broadest notions that characterize the industry in general, as well as a single game project as its entity. Moreover, sometimes people tend to use these as synonyms, which makes sense in some cases, but not everywhere.

“Non-fungible” distinguishes these two concepts based on the level of their decentralization. For example, Decentraland is a blockchain game because it works like a DAO and allows a high level of creativity, to the extent that games are created within the game. In contrast, Light Nite X only rewards in satoshis, which is a centralized project in itself.

However, this approach is not as accurate when it comes to games that have something from both sides. For example, the Axie Infinity ecosystem includes Ronin (RON) exclusively as a governance token. But what about Bomb Crypto, which uses its native token Bombcrypto (BCOIN) as both in-game currency and governance?

When we come to such complicated ecosystems as Gala, which operates on both Gala governance nodes and Gala (GALA) cryptocurrency, but acts as a game development studio as well as a game publisher for smaller studios under its wing, the definition is unclear.

Given the complicated nature of the field, let’s have a rule of thumb: “cryptogaming” is the broadest term. It includes blockchain games, NFT games and all Play-to-Earn with integrated crypto. As for “blockchain games”, that’s still a broad term, but excludes completely centralized projects with little crypto and NFT implications.

For example, if Ubisoft ever integrated the released NFTs into Ghost Recon: Breakpoint, it would become a crypto game, but not a blockchain game. However, it is a dilemma whether to call a game “a blockchain game” if the logic of the game remains only on the blockchain.

In my opinion this no longer works. It became synonymous with cryptogaming: both DappRadar and Wikipedia consider these to be interchangeable notions. Also, the number of games built only on blockchain is falling.

What about GameFi?

Obviously, the term “GameFi” is derived from “DeFi”, which means “decentralized finance.” At first, GameFi was called “DeFi-based games.” After some time, GameFi became a popular keyword in Southeast Asian countries. A common feature of such GameFi projects was a team page with cartoon characters instead of real people. Therefore, the term had some negative connotations and did not find much popularity outside the area, according to Google (NASDAQ:) Trends.

Generally speaking, GameFi combines three notions: DeFi, NFTs and blockchain-built games. Therefore, it can be used as a synonym for blockchain games. But, as I mentioned, it didn’t stick with American and European audiences.

Furthermore, a Web3 company named “GameFi” adds more fuel to the fire of confusion.

Let’s shed some light on the Metaverse dilemma: Web3 or Web 3.0?

Although some consider “Web3” and “Web 3.0” interchangeable, they are slightly different things. Web 3.0 is a concept for the Semantic Web, provided by Tim Berners-Lee back in 2006. This is the next step in the evolution of internet development where machines understand meanings, therefore semantics, rather than the structure of data.

On the other hand, Web3 is a newer concept provided by Gavin Wood, Ethereum’s co-founder and creator of . Web3 is one of the possible ways of Web 3.0 evolution, based on the concepts of decentralization and increased data security.

As for the term “metaverse”, it is too broad to only be associated with crypto. In fact, this is one of the internet iterations including the use of mixed reality: augmented reality and virtual reality. The concept was widely used in science fiction, and only in recent years was it associated with blockchain and decentralization.

To summarize

• A crypto game is any game that includes crypto in any form: an in-game cryptocurrency or NFT technology. It can either be centralized or decentralized.

• A blockchain game is a crypto game that includes some kind of decentralization: nodes, governance tokens, etc.

• GameFi is a synonym for blockchain gaming, which is only widely used in Southeast Asian countries.

• Play to earn is just one monetization model. It became associated with crypto games only in recent years.

• An NFT game is usually an idle game with the main focus on collecting NFTs. In most cases, the logic of the game is built on the blockchain.

• Web 3.0 is a concept for the Semantic Web, provided by Tim Berners-Lee in the 90s.

• Web3 is one of the possible ways of Web 3.0 evolution, based on the concepts of decentralization. It was created by Gavin Wood in 2014.

• Metaverse is one of the internet iterations focused on AR and VR. What used to be called a metaverse in crypto media is a decentralized metaverse.

Finally, I would like to mention that there is no standardized terminology yet. Thus, different sources may use these terms interchangeably. Based on semantic derivation, however, this appears to be the closest differentiation to the right.

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