Late last week, Fred Ehrsam, the co-founder of Coinbase, delivered a thread on the future direction of the gaming industry and how the cryptocurrency industry could influence the internal economies of virtual worlds.

In the thread, Ehrsam floated the idea that the biggest gaming advancements have come via mods of previous games. Examples include Counter-Strike, which was a mod of Half-Life, and League of Legends, a copy of DOTA, which itself was a mod of Warcraft 3.

Even Fortnite, which just eclipsed $300 million in iOS revenue in under 200 days, was a copy of PUBG, a mod of DayZ: Battle Royale, which again was a mod of ARMA2.

Taken together, it’s clear that the most popular games currently available are simply stacked on top of previous game platforms, which is where Ehrsam believes the opportunity lies.

“The building blocks are more likely to be open and thus stackable. Want to create the biggest game out there? Create the most attractive one to extend! Perhaps the best future business model for future video games is creating a platform,” said Ehrsam.

However popular these current games might be, their internal economies currently lack the ability for players to become real participants, and Ehrsam notably asserts that this is where blockchain and cryptocurrency can help take gaming, and even the entire concept of work, to the next level.

I suspect blockchain-based digital assets will make virtual economies very real. People will be able to earn their entire living in virtual worlds in the next 10-15 years, changing the definition of “work” itself. — Fred Ehrsam (@FEhrsam) October 19, 2018

By leveraging blockchain, games can build entire platform ecosystems that allow for truly scarce assets to gain real-world value through primary and secondary marketplaces. While streamers and professionals are able to earn money playing video games, a blockchain system with real-world transferrable asset value would allow any gamer to earn a living virtually.

However, a common fallacy within the blockchain gaming thesis is that incumbent gaming giants, which are earning billions a year in controlled microtransactions, would transition to a blockchain system. It is currently far too profitable for these companies to keep their economies close-end, making the cash flow in a singular direction.

Thus, Ehrsam believes that the next generation of gaming will be driven by startups and entrepreneurs who are looking to up-end the current system.

Agreed – it will be entrepreneurs (not incumbents) who make the most interesting new things. — Fred Ehrsam (@FEhrsam) October 19, 2018

Some of these new contenders include Loom Network (LOOM), Decentraland (MANA) and even major smart contract platforms like TRON, EOS and NEO are beginning to explore gaming as a way to drive adoption.

So, it’s clear the race is on, and the company that can first develop engaging, scalable games that seamlessly incorporate crypto and blockchain without added steps will likely capture a major share of the market early on.

Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.