The past several weeks have seen a huge upswing and expected burst of the Cryptocurrency, Bitcoin. The coin, valued around $600 in January, peaked in December at about $20,000. This massive inflation of the coin’s value has brought mainstream media attention to what has otherwise been a fairly subversive form of currency and investment. Other coins like Litecoin and Etherium have shown a more stable growth, but with new coins being created often, how do Cryptocurrencies affect the video game industry for gamers and developers?

With the rise in use and popularity of Cryptocurrencies, more platforms are accepting them as forms of payment in their stores, including Steam. The security of Cryptocurrencies is highly valued with online purchases, especially as more major retailers suffer from data and security breaches.

Games can use Cryptocurrencies for in-game transactions and not have to worry about conversion rates. This may already seem like a no-brainer since most games already use fictional currencies for this very reason. There are even some Cryptocurrencies that are being made especially for gaming use, such as Tron Coin (TRX) and NITRO, which has been backed by the gaming company, iCandy Interactive. GNation is creating an MMO (pictured below) that will use their own coin, MobileGO as both in-game currency and for esports wagering and prizes.

Cryptocurrencies are also helping Developers raise money for games through investing, and pay international teams without losing money to bank and conversion fees. Gamers and Developers alike can create transactions that clear almost instantly, instead of being tied up for days at a time. A new platform, Game Protocol, is seeking to build a community of investors and developers to create projects around their ICO (Initial coin offering).

But there is a drawback to Cryptocurrencies. The volatile market makes major investors wary. Banks are charging fees to buy and sell coins, so microtransactions can become very expensive. Without traditional regulations, sites to buy and sell coins can control the market. Coinbase, one of the most popular sites to trade Cryptocurrency, is under scrutiny after shutting down coin sales to prevent the value from crashing. These factors are leading many market analysts to believe that Cryptocurrencies will lose general favor over the next few years and may never reach their full potential.

It is the innovation of Cryptocurrencies that draws the video game industry to them. With many companies shifting from physical to digital sales, Cryptocurrencies are appealing to international retailers and innovators. They are volatile as they are not yet regulated by any government or financial institution, and not backed up by any hard form of currency. And the lack of stability is an obvious drawback, with the seller assuming the risk of fluctuations in price. Only time will tell whether this form of currency will find legitimacy within the gaming industry, however, it seems that the trend will continue to grow in 2018.