Traditional Gaming

In-Game Assets

Although in-game content (“digital assets”) can be purchased with fiat currency or claimed as rewards, game operators still reserve the rights to them, and dictate how they can be used. In other words, players don’t truly own these digital assets: the ownership is merely a form of license for accessing aspects of the game. For example, Tencent, the largest video game publisher in the world, is suing a website that enables players of Dungeon Fighter Online to trade virtual coins and other in-game assets on its site for $6.2 million. This case clearly demonstrates that all digital assets are actually owned and controlled by the game operators, rather than the players themselves.

Centralized Servers

The majority of game developers have inadequate resources or experience in managing an economic system for players who want to buy, sell, or trade digital assets. Thus, grey market sales have thrived, opening up a blindspot for scammers and hackers to exploit players while providing no benefit to developers. When operators fail to safeguard against cyberattacks or shutdowns, digital assets are highly exposed to threats of loss, fraud, and theft.