GFTB: Blockchain Gaming With Andreas Antonopoulos

Welcome to the first “Games from The Block” episode for 2021. Today, I am excited to have Andreas Antonopoulos on the show, one of the most iconic figures in the blockchain space and a strong advocate of bitcoin since 2012.

His work has helped thousands of people to understand how bitcoin and blockchain works. He’s a technology entrepreneur and internet security specialist as well as a writer of multiple blockchain-focused books.

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To celebrate 2021, we are giving away 1 book of “Mastering Ethereum: Building Smart Contracts and DApps 1st Edition” as well as 2 books of “The Internet of Money Volume Three: A Collection of Talks.”

Listen to the Blockchain Gaming With Andreas Antonopoulos podcast using your favorite player or Spotify below.

What’s your opinion about Dapps & Smart Contracts? Will these “take over” the world in the next few years?

I certainly think that decentralized applications give us tools to create new ways of doing things and fix problems on the internet today. But at the same time, I don’t think everything has to be decentralized or be a Dapp. It’s unlikely that we will see the internet be transformed over the next few years into a much more decentralized place. 

I think what we’ll see is where decentralization is a critical capability. In areas where centralized systems produce security problems, privacy problems, surveillance problems, control, censorship, governance problems, and things like that. 

We’re gradually going to see more and more introduction of decentralized solutions in the form of Dapps and Dapp components that can be part of bigger applications. 

Can Decentralization help us create better games?

To me, decentralization solves problems of power and control. So in areas where putting one company in charge of something leads to censorship, control, and data privacy issues. 

Those are areas where we can find opportunities to enhance the experience for the user. If there is an element of decentralization or an aspect of interoperability, a good example is games.

For many people, games are much more than just an occasional entertainment thing. There are many people for whom Gaming is a big part of their life and might also be a source of income. 

It’s social interaction. from that perspective, many games today are closed worlds, they are isolated from each other, and there is no overlap or connection between them. The game companies have absolute and complete control. You have no privacy, no security, no independence, no control over assets that you build.

Anything you create isn’t yours. It belongs to the game company, and you can be kicked off for any reason at any time. You can’t transfer things from one game to another. You can’t sell the work you produce inside a game, you don’t have the ability to have artistic expression.

Now, can we fix that with blockchain? Maybe some aspects of this?

Yes, I think we can. The gaming worlds suffer from the concentration of power, concentration of control, trust issues, and censorship, control over money, assets, property, and things like that.

Blockchains provide solutions in all these areas, whether it’s governance, or transferable assets, like non-fungible tokens.

Now we have much more comfortable and consumer-focused ways to monetize your game time and your experiences.

What can we do with Fungible Tokens?

A token is something that represents something else. It could be monetary, like a coin representing a value of $1 Bill. Some times it can represent access, like a ticket for a concert, or something like that. It could be something that represents identity, something like a driver’s license or passport. 

So, in Ethereum, it is straightforward to create various types of tokens, and the most common tokens are fungible tokens. The definition of fungible is when each unit of the token is indistinguishable from() another unit of a token. So if you have X tokens representing a US dollar each, you can’t tell the difference between one token and another. That concept is called fungibility, and it applies mostly to currencies. 

Non-Fungible Tokens (NFTs) or Deeds? What’s the correct way to name them?

The term non-fungible token is actually poorly named, in my opinion, because what it does is it describes this type of token as the negative of fungible, meaning currency. 

The other type of name for a fungible token is called a deed or certificate of title. And I think that’s a much, much better name. A deed is a title you have to your house or the piece of paper that shows that you own your car. Or it might be a certificate that says you own a painting or a piece of art.

A deed as a concept describes non-fungible tokens much better. So what is a non-fungible token? It’s a deed. It’s a digital token that represents ownership, access, association, affiliation, or identity. Regarding some context, it could represent ownership of a shield, a planet in a space game, a costume or character.

It could represent ownership of a player avatar, an entire world in Minecraft, for example, that you own and have constructed.

Can NFTs bring value to the gaming industry?

I think they can bring enormous value to Gaming because they are independent of the game they are used to. You can have secondary markets, and you can have transferability. You can have interoperability, which means you can move from one game to another. 

NFTs represent ownership that the player held, so the player ultimately has the control, which means they can buy and sell these things.

Let’s say that the company that makes your game goes out of business, and theoretically, this game was based entirely on non-fungible tokens. Well, somebody else could build a different game that uses similar mechanics. You could move on of your assets’ effort and experience effectively to this new game. So it makes game systems open instead of closed.

Are NFTs going to disrupt the gaming industry and see big studios following the trend?

Probably not, and I think that’s a good thing. Will Electronic Arts and other big game companies do this? Absolutely not. They won’t do this because their primary mechanism is to use control, monopoly, and economies of scale to make money. 

They have very little interest in creativity, artistic expression, user experience, customer service, freedom, independence, social goods, the promotion of arts, entertainment, or any of these other things. These are all secondary.

And they prove this every time they take a little Indie Game Studio, and completely strangle it and destroy it to turn it into a massive soulless corporate machine for producing shitty games that they sell you with a minor update each year. 

And people go out and buy and then are disappointed and complain. They’re never going to do this because this goes entirely against everything they stand for, but it’s not about them. 

The real question is, can we see a revolution in game making? That starts from indie games, which gives players freedom and a better experience and more control and more independence? We have games that are not as flashy and not big budgets but are enjoyed by players who invest their time and creativity into them to the point where that starts becoming the real game environment.

So I think EA is never going to really embrace this. It’s not in their game. They say it’s in the game. Well, it’s not. NFT’s are not in the game. It’s going to be indie studios. It’s going to be smaller, creative artists.

What I really like to see is the introduction of NFTs and blockchain capabilities into game building platforms. The really interesting thing is not whether EA does NFTs but whether unity does NFTs game creation engines etc. So so we’ll see.

What will happen if quantum computers come out and blockchain is penetrated? If we suddenly find security flaws that we were not aware of?

I want to point out that I’ve been in information security since 1991. I’ve worked in information security before Bitcoin and blockchains. Information Security is a complicated thing. But the most important thing to realize is that information security is a continuous effort against escalating threats, improving defenses, meaning that security is never perfect. But it’s also never wholly failed. 

New attacks come out all the time, and flaws exist that we don’t know about. Quantum computing is just a new vector for attacking the security of cryptographic protocols. But cryptographic protocols also fall to other types of attacks. Over time, it gets weaker and weaker, as our knowledge about cryptanalysis gets better and better. 

It’s important to understand that this is an ongoing competition. The people trying to break it, find a new way to break it, the people trying to defend it, find a new way to protect it.

And this means it’s evolution. There will be attacks that involve quantum computers. There will be flaws that we don’t know about. But because of how we design information security systems, we never design information security systems. If you break one part, you get everything.

One of the essential concepts in information security is called defense in depth or layered defense. Every defense has layers. We have several different ways of defending against several different threats. 

If one of these layers is broken, an attacker may get part of the control or the system or access the money, but they don’t get everything. And the other layers continue to work. 

Suppose quantum computing can break the elliptic curve digital signature algorithm used in Bitcoin. In that case, that’s not the only layer of defense. There are three or four different other layers that protect against theft by a quantum computer, including the fact that addresses are hashes of public keys. We have two different algorithms, the SHA 256, and RIPEMD160, with a public key behind addresses. 

There is a whole structure in Bitcoin and other blockchains where you don’t actually show your public key until you spend it. And then when you spend it, if you don’t reuse your address, it’s already empty. So by the time you show it, there’s nothing there to hack. The mining system works with a completely different algorithm, which is the application of Sha 256.

We can also replace the digital signature algorithm, which is already one of the things planned for 2021, with the introduction of a new signature algorithm called Schnorr signatures. 

There is no one attack that can break everything, especially not in a decentralized system where there’s not only one thing to attack, where if you have a flaw in one software implementation, it’s not the only software. The keys are held in a million different places. So if you want to attack, you’d have to attack a million different places. 

If Bitcoin is the new gold, what is Ethereum?

These analogies are useful to get a general understanding. So it’s useful to say Bitcoin is the new gold for people who don’t understand what Bitcoin is, because they can relate it somewhat to gold, but the truth is Bitcoin isn’t gold. It’s not just digital gold, it’s a much more complex thing than that. And it’s very difficult to say exactly what characteristics of gold it has because it has so many elements that simply don’t exist in the physical world.

For Ethereum, you know, people make another simple analogy. So if Bitcoin is gold, Ethereum is oil, great, but it’s not polluting like oil. So that’s not a good metaphor. These analogies are bad for describing a technical system that is so much deeper and more complex than a simple physical commodity.

Bitcoin is primarily focused on the technology of money, specifically the technology of very scarce, very robust, and very secure money that cannot be stopped. 

Ethereum is focused more on the flexible and programmable money like but also other things. You have tokens, abstractions, financial instruments, programmable smart money, and various other combinations of these things. That includes identity, governance, voting, tokens and deeds, like we just talked about. 

Because it focuses on a broad area, and it’s much more flexible, It’s less secure and less robust than Bitcoin, but that’s okay. Because that’s not its goal, its goal is to be much more expressive. Its goal is to allow you to compose things together and make much more interesting and complex things. 

Bitcoin has to be simple. Simplicity is one of its greatest strengths, the more simple it is, the more secure and robust it can be, the less opportunities for weird things to happen. 

Ethereum chooses to be flexible and complex and programmable. More like Lego, you can make anything with it. And that’s great. But it does mean that it’s not always as secure. So they’re two very different things.

They’re not trying to be the same thing. They’re not trying to compete with each other. And I think they’re both great at what they do and should stick to what they do and not try to beat each other.

Thank you for reading this interview. I wish a healthy and creative 2021 for you.