By Sunny Um WIRED Korea

Everything happened in just a few minutes.

In 2010, a gamer, who went by “Shireulieunshi,” bought a rare in-game pet for $9 from a fellow gamer. It was a coveted limited edition, which had been sold for a higher price.

Shireulieunshi scratched out the pin codes of his gift certificate and sent them out to the seller. Upon receiving the money, the seller told him to wait at the item shop for three minutes and a gift box with the pet would arrive at his account. That he did, but the seller soon logged out of the game without sending a pet to Shireulieunshi.

Shireulieunshi reported the case to the game admins, but they said they couldn’t help him unless he provided supporting evidence of fraud like a screenshot. As he had no evidence to present, he could not take his money back.

No security was provided for gamers when they were conducting transactions in those days. Payment and delivery were based on mutual trust and nothing else.

But this is changing with the use of blockchain technology which can secure in-game transactions, says David Kim, a professor of industrial management and engineering at MyongJi University.

Blockchain is a list of records, better known as blocks, linked in cryptography. Each block holds a timestamp of the previous block and the transaction data.

Since it was conceptualized in 2008, blockchain technology has been adopted by business, finance and many other industries. Now the game industry is jumping on the bandwagon.

The key feature of blockchain technology is transparency. If it is used in a game, every in-game transaction is written on the chain. Gamers could view the records as well as the rules of transactions.

Gamers do not need help from admins when they carry out transactions on blockchain-based games if the games use smart contracts, a computer protocol that automatically processes transactions when all conditions are met.

When conducting transactions, gamers will also have their credentials authenticated with digital wallets linked to their credit cards or bank accounts.

“Many attempts are being made to protect rights and interests of game admins and players on a blockchain-based trading platform,” says Kim in his essay on blockchain and its use in games.

One of the first blockchain-based games released in the digital world is CryptoKitties, which was developed by a Canada-based software company Axiom Zen.

In CryptoKitties, gamers can buy, sell and collect virtual cat avatars using digital wallets like Dapper. Transactions involving the kittens are paid with Ether, the currency of a blockchain platform Ethereum.

CryptoKitties need no secondary markets for outside trade any longer because transactions are securely done on a blockchain platform. A smart contract ensures that an item is delivered when a payment is made. When the game platform was not based on blockchain technology, trade on the secondary market was securer than on the platform.

Many games are Ethereum-based games. In addition to CryptoKitties, a game named Push Sushi uses a token – a value unit on an existing blockchain – that follows the rules of Ethereum. But unlike CryptoKitties, Push Sushi players earn tokens each time they clear the game stage or log into the game.

Gamers can buy items from shops with those tokens and transfer the tokens to their digital wallets on Ethereum.

It wouldn’t be easy to cheat on Push Sushi, as in-game achievements like stages cleared or rewards taken will be recorded on the blockchain platform built by BORA, the service provider of this game.

Some developers design tokens based on a Korean blockchain platform rather than Ethereum. Mgame, a software publisher, is doing a closed beta test of a game Soul Saver, built on Klaytn, a blockchain platform developed by messenger operator Kakao Corp. Gamers playing Soul Saver can buy items with KLAY, a Klaytn token.

In-game items can be also owned by gamers playing blockchain-based games, says An Young from Wemade Tree, a subsidiary company of Wemade Co.

“Previously, game companies gave gamers only the right to use their in-game assets, not the ownership,” he says. “Game companies were able to take back or delete users’ items when they deemed it necessary. But [in blockchain-based games] they are owned by gamers and no developer can do anything about it.”

However, some developers may not welcome the use of blockchain technology in the gaming industry, as the idea of transferring the ownership of in-game assets to players, which may raise legal disputes, doesn’t sound appealing.

“[Adopting] the blockchain technology in designing a game means establishing a new paradigm,” Kim says.

Especially, developers of successful games do not find any advantage in handing over the ownership of virtual assets to the players. In other words, they do not need to entice gamers with the incentive because their games are already popular.

There also is a technical problem to build blockchain-based games, as many blockchain platforms cannot handle a huge amount of transactions at a time. For example, in the first week of release, the transactions of CryptoKitties accounted 10 percent of the Ethereum traffic, which was a cause of delay in transactions took place outside the game.

Some companies try to tackle the problem by designing a new, better-performing platform that can accommodate a larger traffic. One such platform is WEMIX, which is built by Wemade Tree.

WEMIX has two classes of blockchain: a service chain for in-game transactions and a bridging chain that connects the service chains and moves the data and assets for cross-chain transactions.

An says the use of different chains, which prevents the traffic being concentrated on a single blockchain, allows the company to serve more users. The company has eight blockchain-based games on board that are scheduled to put this platform’s efficacy to test this year.

When developers solve all technical problems, however, it will still find it difficult to obtain permission from the Gaming Rating and Administration Committee to release blockchain-based games in Korea.

The committee is worried about the possibility of games fueling speculation in cryptocurrency, with some games offering virtual assets for transactions with cryptocurrency.

“Some companies are trying to break through this problem with the use of non-fundable tokens,” says Kim.