Another chapter in the unconventional revival of GameStop has begun. GameStop is now entering the world of Web3 through the launch of GameStop Wallet. The beta version of their crypto wallet is a starting point for them as they will launch an NFT marketplace by the end of July. After the on-going GME short squeeze put the declining brick and mortar retailer back in the public eye, the company started using its new resources to explore opportunities created by cryptocurrencies and NFTs.
Being a well-known company, GameStop is opening the door for the general public to learn more and adopt Web3 applications such as wallets, crypto, NFTs and so on. This can be one of the many catalysts that drive the adoption of Web3 and blockchain technology into our daily lives. But for now, let us explore what this GameStop move means for blockchain gaming and for the mass adoption of cryptocurrencies and NFTs.
There are two kinds of crypto wallets: custodial and non-custodial or self-custodial. Custodial wallets are managed by the wallet providers; they hold the private keys (a series of 226 characters that gives access to the wallet) and seed phrase (a sequence of words to keep an account secure) for the wallet users. This means that users can retrieve their account through the provider even if they forgot the passkey and recovery phrase of the wallet.
Unlike custodial, non-custodial wallets don’t offer users a chance to recover their private keys or recovery phrase from the company offering the wallet. The user is the only one responsible for their wallet. Whoever has the private keys has the account, and has the ability to sweep crypto assets from one wallet to another.
If users lose their private keys and recovery phrase, or it gets hacked, they will also lose their crypto funds and NFTs. In addition, all transactions using non-custodial wallets are done on-chain, which means every transaction will require gas/miner/transaction fees. In cryptography, there is only a limited amount of computational resources (gas) that’s why fees can be costly when there is a surge of transactions done on a specific time, and if it requires the transaction to be closed immediately.
It is not ideal for smaller transactions, which is mostly what the general public requires. For custodial, wallet providers simply have the choice when they would carry transactions on-chain to manage costs, even when users do small transactions. However, many argue that custodial wallets go against the very idea of the blockchain. By giving a company access to your crypto wallet you are giving up some control over your crypto and NFT assets. With non-custodial wallets, no one else – including GameStop – can access your assets.
This provides increased security and greater control. In general, those less experienced may opt for a custodial wallet simply because it provides a simpler user experience, protects them from the risk of losing their passwords and hacking of their account through mishandling of their information. These are the reasons why it is surprising that GameStop is offering a non-custodial wallet. Having a non-custodial wallet comes with a lot of responsibility. Wallet users must proceed with care in keeping their info and private keys as most of the blockchain-related crimes or robbery are from mishandled private keys.
What It Means: With so many crypto newcomers entering the space through GameStop Wallet, the company is making a big statement by giving users full control over their wallets. GameStop wallet users need to protect their private keys and recovery phrases as if their life depended on it. If they lose it, they lose access to their wallet and crypto assets. No one can help them recover it. Non-custodial wallets aren’t as user-friendly, but they most likely represent the future of Web3, especially with GameStop giving them this push.
Gamers can “own” in-game assets through the GameStop Wallet which enforces the very foundation of Web3. Web1 was read-only (static pages), Web2 was read-write (world wide web and social media), and now, Web3 is read-write-OWN. This opens the avenue for gamers to create their own in-game assets in the future which they can trade on NFT marketplaces. Epic Games mentioned that one of the long-term goals in turning Fortnite into a metaverse is giving players the ability to become creators of ubiquitous in-game assets which are tradable and accessible in various multiple worlds or games inside its metaverse. This will accelerate the rise of the creator economy in the gaming world.
By being able to own and trade in-game assets, indie game makers have the opportunity to reach their markets, explore new revenue streams, and raise funds to develop their games. Indie game makers can do initial offerings or trade assets to help subsidize their cost of game development.
What It Means: Wallets and marketplaces empower gamers to create new games and in-game assets through new fundraising opportunities in the Web3.
To really democratize owning in-game assets, GameStop must partner with Triple-A games. They would need the buy-in from as many Triple-A titles as possible to accelerate the mass adoption of blockchain gaming by allowing wallet users to own a piece of their favorite games. Democratized ownership of in-game assets will revolutionize the way we play games. These partnerships may also explore leveraging the creator economy to come up with innovative in-game assets. Another interesting move by GameStop is releasing their wallet beta before launching a blockchain game marketplace. This could help them build a large user-base for GameStop Wallet which could attract larger game studios.
What It Means: GameStop must enter into partnerships with Triple A games that will give way to the public owning a piece of their favorite game. All of these factors combined will open up to the mass adoption of crypto and NFTs.
As a well known company to the public, GameStop has the ability to reach the mass market and set the trend on how they will experience crypto and NFTs applied in the gaming world. If they set forth and educate the public on their non-custodial wallet and the responsibility it entails, then it will not take long before we see an upward trend in the adoption of Web3 applications. Gigster helps major companies like GameStop in their projects and ventures into crypto, NFTs, metaverse and other Web3 applications.
With our skilled pool of blockchain development talent, Gigster educates organizations about Web3, counsels them and helps them build their Web3 projects with ease, and removes the hassle of hiring a Web3 team and the costly trial-and-error that comes with it. Tap Gigster to know more about the world of Web3, crypto, NFTs and the metaverse.