As I mentioned yesterday, this post actually germinated from one I started a month ago however ended up rewriting and then splitting it in two, all as a result of a new product or app or service, whatever you want to call it being released – CryptoFights.
CryptoFights is a good example of the sort business model that blockchain can create, with a specific business model called ‘Play & Earn’ which is an evolving industry where it is even possible to make a small living from*. This is a game were nerds build and develop a Dungeons & Dragons style ‘champion’ that they use to battler other nerds ‘champions’ for the opportunity to win prizes.
(if you live in the Philippines).
The ‘Play & Earn’ business model has been around for some time, and the largest player have game economies running to the $100m of dollars. BJW will be excited because the largest of all the operators in this field is currently run on regular old normal databases, however CryptoFights is one of the first to be released on a blockchain.
Now the interesting thing about the prizes that you win ‘Play & Earn’ games is not only you can win a chunk of your opponents ‘wager’ in fighting you, but occasionally you can also win prizes like epic swords, wands, daggers – nerdy D&D stuff. These items are tradeable on market places, with the difference being they cannot be copied, and if stolen they can be traced.
But the most interesting thing of all is that they contain embedded BSV which if you tire of playing CryptoFights you can forgo selling your ‘sword & shields‘ for whatever premium you might be able to obtain on a market, and essentially ‘melt’ the prize down back into raw BSV to spend elsewhere.
Within the space of a month CryptoFights now accounts for for more than 40% of all the transactions taking place on BSV:
…and what did this sudden surge in transaction levels, that took it to comparable levels as ETH actually do to the transaction cost on BSV? Nothing, they didn’t break a sweat on the median transaction, which remain has remained at $0.00024 or around 250th of a cent. The Minimum transaction fee available on BSV is around 1/2 a sat. This works out at 0.00000075 of a dollar or 7500th of a cent.
By the way, CryptoFights was originally planned and developed to be launched on Ethereum, but ETH simply couldn’t handle the volume of trades or the fees, nor could the CryptoFights developers tolerate the constant developer updates in in ETH. Had CryptoFights been launched on ETH, then it would have completely crippled the network alla the “crypto kitties” fiasco, or more recently “Stoner Cat’s” which has again sent the transaction cost on ETH soaring to the double digits (in dollars not cents). Again – Ethereum CAN’T scale.
CryptoFights was released as a Beta back at the start of July and is now generating OVER half a million microtransactions daily, resulting in the amount of on chain activity and transaction level to sky rocket:
Note that the above chart is a Logarithmic chart. The linear increase is reduces the competing versions of Bitcoin to a flat line.
But this biggest impact is that the sky rocketing number of Yesterday alone it provided BSV miners with around $2,500 in revenue that was associated with transaction fees, not mining reward. The result has to be single handedly pull BSV’s mining/fee reward to nearly above 1%…. meaning miners now earn 2.5% of their daily revenue from fees as opposed to block rewards. For blockchains to succeed in the long term this will have to rise to 100% as the bootstrapping block rewards slowly fade away:
And what about fees? Surely they have sky rocketed if the fee component of the total mining reward has increase? Actually they were virtually unchanged. Essentially CryptoFights doubled the number of transactions taking place on the BSV network and the median fee barely budged, remaining at $0.00024 or around 250th of a cent.
This is how, in my honest opinion, BSV will ultimately end up winning. Cryptofights is just a single application and it is seamlessly generating nearly 500k transactions a day by itself, yet in comparison to other ‘Play to Earn’ gaming platforms it is still small fry, larger ‘play to earn’ gaming platforms have economies turning over hundreds of millions of dollars, and if ported across would be generating millions of transactions a day. There are already several other competitors either on BSV or moving to BSV in order to compete in the ‘Play & Earn’ space – Peergame is another such example.
The rise in transaction volumes is finally starting and with it the economics and incentives for mining and transacting on this chain are going to start to become impossible to ignore…. this is what I will look at with the next blog post I’m working on. How this rising transaction volume will change the economics of mining.