DigFin recently recorded a podcast with PwC’s crypto frontman, Henri Arslanian, in which he explained why digital assets will be adopted more quickly than bank-backed blockchain projects.
We’ll be running that interview later this month, and I’m not going to reveal more, but I wanted to make the point that distributed-ledger tech could find its way into society in ways that surprise you.
As a Gen-Xer, I’m usually oblivious to what the kids are up to these days, but even I have heard of Fortnite, an online video game. Its most popular version is called Battle Royale, in which 100 gamers are placed in an arena with the noble mission of wiping each other out.
(I’m not a gamer, but I’m a big fan of Koushun Takami’s 1999 pulp masterpiece, Battle Royale, in which the gladiators are all schoolkids. But I digress.)
Fortnite Battle Royale now has 125 million players, making it a cultural reference for the under-20 set like, I suppose, Michael Jackson videos on MTV were for my generation.
Gigs meet gaming
On February 2, the tens of millions of people playing that day were all zapped to a virtual stage, where a D.J. named Marshmellow (who’s a real person) played a 10-minute set, encouraging all the avatars to dance. The game designers disabled everyone’s weapons for the duration of the set, and gave all the avatars automatic resurrections if someone managed to kill them.
You can watch the 10-minute clip here, and see all these players’ sci-fi soldiers dancing (well, sort of) around the stage. And once the concert ends, they all return to blasting the daylights out of one another.
More relevant to DigFin’s readers, the game’s designer, Epic Games, released various virtual goodies – emojis, avatar skins – with Marshmellow’s brand that players could buy, in expectation of a rush of micropayments. The Verge has a more complete write-up of the event here.
The makers of digital assets, be they security token offerings to divvy up a property into smaller, tradeable units, or as a tool to help poor people in emerging markets transact small payments quickly and cheaply, have games in their gunsights.
How blockchain scales
If blockchain-based payments are ever going to scale, the first use case is more likely some future version of Fortnite than a letter-of-credit platform or a stock exchange’s middle office.
In the nerdy world of dApps (decentralized applications), there are just three kinds of projects now: finance, gaming, and gambling. Of these, the finance apps are mostly about how to trade and pay for tokens for gaming or gambling.
Video games are huge business. E-sports are also a huge business: Hong Kong just got its first dedicated e-sports stadium in Mong Kok, a 25,000-foot monster complex; Carrie Lam, the city’s chief executive, attended the opening.
In all of these cases, players pay to participate, to clothe their avatars, to obtain virtual objects, to offer gifts – whatever. But in a dApp, those magical swords, fancy outfits, sick rides and so on are tokens. You don’t just buy them: you own them, and you can trade them, even if you leave the game.
The Marshmellow gig in Fortnite is a peek at how micropayments could scale like crazy, and bleed into live entertainment and who knows what else. The dApps world is still a closed world of developers, but what happens when one of them achieves a breakout hit? What happens when people start creating capital markets and lending banks for all that virtual stuff? How much money is going to be made in the payments business then, and who’s going to be positioned to mint it?
If this is doing your head in (two minutes of Marshmellow makes me feel old but somehow totally OK with that), I leave with you with links to Michael Jackson here and Koushun Takami’s awesome novel here.