Magic: the Gathering (MtG) is arguably the most popular collectible card game in the world. In it, two or more players, or wizards, battle each other in a turn-based card game that is full of magical mystery. Richard Garfield developed the game in 1993 and ever since has slowly grown into a business with a turnover in the nine figures.

Players take turns casting different types of spells, each represented by a collectible card. The players design a deck from a selection of thousands of cards and battle each other to find out whose deck is superior. We won’t delve too deeply into the game mechanics as that is a topic for an entire book. But to give an impression on the complexity of the game a recent study from a group of academics at MIT proved that MtG is the most complex game in the world and that it is impossible to come up with a perfect strategy for the game.

MtG cards have two different types of utility. Aside from being used in the game, they’re also limited-edition collectibles. Similar to designer handbags: there is a limited number produced every season which allows their price to increase over time as the supply remains constant. MtG cards are just like these designer handbags with the difference that you cannot wear them, but you can play with them. And just like the designer handbags, they have many secondary markets where you can buy and sell second-hand cards to improve your deck. In the context of blockchain perhaps the best-known example of a secondary market for MtG cards was the infamous MtGox bitcoin exchange in its early days. Before becoming a bitcoin exchange it was designed for trading MtG cards.

With blockchain, digital collectibles truly became available for the first time. One of the most interesting use cases of blockchain is to offer fungible and non-fungible digital tokens. In case the word fungible is not familiar imagine you have two coins: a two-euro coin and a Roman coin from antiquity. The two-euro coin is fungible: you can walk into any store to buy products just like with any other two-euro coin in circulation. The Roman coin, however, is not. It’s unique and its value is different from the other ancient Roman coins since factors such as condition vary coin to coin. Like the Roman coins, MtG cards are non-fungible. Each is unique in its value depending on the condition and a multitude of other factors. But if we are now, for the first time, able to represent non-fungible items as digital tokens, would it not make sense to try this with MtG cards? Let’s see if there would be an actual benefit to the people involved in the ecosystem in doing so.

If we analyze the stakeholders in the current MtG ecosystem we can see that there are three different types of actors: card owners, shops that retail the MtG cards, and Wizards of the Coast (Hasbro subsidiary that owns the MtG brand). Each has different motivations but they all lack transparency in the MtG economy. In the supply chain Wizards of the Coast designs and prints new cards and releases them to the market. From their warehouses, they ship cards to shops which sell them further to individual buyers.

This first factory-to-shop step in the supply chain is the only transparent part. Any time after that the card may move between countries, buyers and sellers, and there is no transparency where the card has gone. In the secondary markets, card owners and the shops operate on an equal footing, selling and trading cards to each other, which makes it impossible to track the card circulation currently. This, of course, raises the question of counterfeit cards. How can Wizards of the Coast prevent counterfeiting? Unsurprisingly, they can’t.

Admittedly MtG cards do have some fraud prevention mechanisms in place, but the cards are not traceable once they’re out in the world. It’s not possible to detect fraud if the quality is good enough. For that, you’d need a blockchain-based digital asset secondary market. This is a pertinent issue as many of the cards sell for hundreds or even thousands of dollars or euros. A more in-depth discussion on this can be found here.

So let’s consider how a non-fungible token system could work. As most of the shops that sell MtG cards also offer originality checks on the cards we can assume that each card is legitimate at an authorized retailer’s location. So if one would like to make sure that their cards are legitimate, and get a digital token representing them you’d have to go to the nearest official MtG distributor and get them authenticated there. The new cards would be quite simple for users to register as they could be implemented directly at Wizards of the Coast production facility or after they were purchased from the retailers with the same mechanism as for the cards that are already in circulation.

The tokens that would represent each card would include the specific characteristics of the cards and allow the transfer of ownership along with the transfer of the physical card. There are already multiple secondary marketplaces for used MtG cards, so one can think of the non-fungible token as a proof of ownership of the card. In addition, the token would allow buyers to track the movement of the cards and work as a fraud prevention mechanism. Without the transfer of the token and the physical card, a transaction would not be complete, thus creating a prevention mechanism for issuing arbitrary amounts of new tokens without owning the physical card. This marketplace could be neatly linked to an existing blockchain ecosystem by building it on top of a platform such as Ethereum. For the mechanism of exchanging cards with other people some of the existing decentralized exchange protocols, such as 0x, would be very applicable for this use.

More recently, game developers have launched another product in the MtG family: Magic: the Gathering Arena. In Arena, the players can play the same way as in the physical card game. The rules and the cards are the same. However, the difference is that the game is a computer game. Players play against friends or random players and gain more cards and levels either by purchasing them from the store or by playing games. There is one significant difference, though. In Arena there is no secondary marketplace for the cards and the players can obtain their cards only through playing the game or purchasing the cards directly from the game store.

And now, finally, we can connect the dots!

The still untapped killer use case of blockchain is in connecting physical and virtual objects. The MtG product family offers an unprecedented opportunity for this. As far as I know, there is no single game with an existing user base using the same virtual and physical objects and this is the unique strength of MtG. By using a tokenized blockchain backend it will be possible to combine the card databases and supplies of both currently separate entities into one, the traditional MtG card game and Arena. Doing so would allow users to transfer cards from the physical MtG game into the virtual Arena and vice versa. This would also allow for a completely new type of a secondary marketplace to emerge, one where the marketplace itself would function as a gateway between the virtual and physical. In this marketplace, the transfer of value between the virtual cards and the physical ones would be facilitated. If one would hold a certain physical card and would like to use it in Arena they could just exchange them in the marketplace and transfer the token to the virtual game while retaining possession of the token that represents the card itself in the blockchain.

For such a marketplace to become feasible, there needs to be a transfer of information between the physical cards to the virtual ones. The current limitations of blockchain protocols won’t allow for extensive storage of information in the blockchain itself. This is where a secure and stable oracle protocol comes in. In order to connect the back end of the Arena to the shared blockchain that holds the database of the non-fungible tokens requires an oracle solution like Gardener.

One might at this point consider that blockchains are not well suited for storing large amounts of unstructured data such as pictures which might be needed to identify the cards themselves. One possibility for handling this data storage would be to store a picture of the physical card into a decentralized database, such as the Interplanetary File Storage (IPFS). Once the picture of the physical card would be stored in IPFS, the hash of the picture would be recorded in the non-fungible token. Then the oracle can function as a gateway that allows the user to find the correct picture in the database and see that the card they are looking at actually matches the condition that the counterparty is claiming.