How in-game Bitcoin microtransactions could change future of gaming

Bitcoin startup Zebedee hopes to entice video game developers and players to use Bitcoin as in-game currency—and beyond.

By Frank Cardona

3 min read

What if you could earn Bitcoin while playing video games and then spend your earnings in the real world? One company is working on allowing gamers to do just that. 

On Monday, Zebedee announced a software development kit (SDK) and dashboard that will allow video game developers to integrate Bitcoin microtransactions through the Lightning Network. Why Bitcoin? Because it’s “the native currency of the Internet,” according to Zebedee CEO Simon Cowell.

“The most important practical feature of any currency are the network effects that give it value and utility. Bitcoin is still the leader by a long way,” Cowell told Decrypt in an interview. The company wants to incentivize gamers and developers to earn and spend satoshis, the smallest unit of the cryptocurrency.

The company aims to do this through the fledgling Lightning Network, which allows for instant microtransactions without encumbering the Bitcoin blockchain. 

The company hopes to help game developers find new ways to monetize their products, both within games and outside of them, through Bitcoin.

“Loot boxes, skin purchases, ads and subscriptions has been the limit of fiat and game development. That deadlock is no good for either users or developers,” Cowell said. As for those users, Zebedee wants to give gamers the ability to monetize their time spent playing video games. Users could “be compensated for their attention especially when it comes to being bombarded by adverts,” Cowell explained. 

The tools that the company just released are in closed beta. But the plan is to enable game developers to create games within the dashboard, or simply insert code into an existing game that would integrate the Lightning Network for payments. 

This could lead to anything from a paywall to access sections or actions within games, or even an “entire in-game economy,” Cowell said.

The future of gaming

Zebedee envisions a future in which gamers can earn satoshis in one game, transfer them to another, or later spend them in the real world and convert them to cash. Cowell points to how some players in massively multiplayer online role-playing games (MMORPG) already make a living playing games, and there is a growing trend of players who want to be compensated for their time. 

“I personally think that digital economies will become bigger than ‘real’ economies in our lifetime as they can scale infinitely, frictionlessly, at zero marginal cost,” said Zebedee’s CEO. 

As for mainstream games on major consoles that often operate in closed in-game currency systems, Cowell thinks big developers won’t risk their current models for Bitcoin “until they see it as a competitive threat.” He thinks the first adopters of Bitcoin microtransactions will likely be “Indie Devs and medium-sized gaming studios who are looking for a competitive edge and way to differentiate themselves.”

One partner Zebedee already has lined up is MandelDuck Studios, which has developed a fighting game, Raik, in which spectators can instantly gift players “power-ups” through microtransactions.

The ultimate goal, according to Cowell, is to unlock a Bitcoin economy which he believes is still “stuck in a small community of hodlers.” Does the road to mainstream Bitcoin adoption go through gaming? Zebedee thinks so.

“We set about bridging those two sectors in a way that game developers and users don't need to even know anything about Bitcoin,” he said.

Zebedee plans to demo their new SDK and dashboard for devs at the upcoming Crypto Compare conference in  London and Bitcoin 2020 in San Francisco. 

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