Blockchain-based gaming is a rarely talked about sector that nevertheless promises to revolutionise online entertainment and power the digital economy to new levels.

To get an inside perspective on this brave new world, AYO.NEWS caught up with Sergei Labutin, Executive Director of Ether Dale, the Tallinn-based developer and publisher of unique blockchain games, including the popular fantasy RPG, Ether Quest and vaporwave combat game Glitch Goons.

You’re based in Tallinn, what’s the blockchain scene like there?

Estonia is an advanced IT country. There have been many world-class innovations, including Skype, TransferWise, Erply, Playtech, Fortumo and Bolt (former Taxify). This also became possible because the country declared internet access a basic human right.

At the government level, all steps are being taken to become Europe’s Silicon Valley for blockchain startups. There are now many startups in Tallinn working on fundamental things that in the future can change the lives of everyone. The main “limitation” is that there can’t be any money laundering, gray schemes or tax evasion in Tallinn.

If you have an idea that aims to change the world and does not harm nature or others, then Tallinn is the ideal location for your startup. It is also a European country, which makes it possible to find partners and customers within the European Union and scale your business outside Estonia without serious difficulties.

What kind of user base are you seeing for your games right now? Is it still predominantly niche or are you moving into the mainstream?

Though blockchain games players are still a very small niche, we are aiming for the future, and we believe that the values that blockchain technology brings will make this niche 1,000 times larger. We have a strategy to expand the market: we do not follow the mainstream, we will create an entire industry and stand at the helm of this mainstream.

We want to provide simple and clear ways to use the values of the blockchain. We strive to ensure that not only hackers and crypto enthusiasts can understand the game, but that if you have a phone, only a couple of taps will separate you from wielding a sword and a shield in a crypto game. I think this is the main value.

Therefore, answering your question, no, we are not following the mainstream, but our own vision of the future.

Like Ether Dale, we’re convinced that the ability to retain ownership of digital items while moving between games and platforms is a key driver of the way the gaming environment will evolve. How far and fast do you see this developing?

Throughout the entire mainstream video game industry, everything that a player has achieved can be lost at any moment, which devalues the time spent on a game. I see the future as it was before the Internet era, when everyone bought discs, and the game that you bought belonged to you, and so did your victories and defeats. In the new world, however, players will not be isolated from society, and they will be able to play with others.

The results and achievements of a gamer will not be lost if his hard drive burns out or stops working. What will happen in this case is that players will be protected from server owners and any bad decisions from developers that would otherwise affect millions of users.

The problem today is not technology, but regulation and the absence of generally accepted rules of the game. I think that in the next 2 years, general rules will be adopted, followed by regulation. Fraud in the environment of blockchain projects rolls over, so we all need to ensure that users are protected, despite how open the technology is.

That is, the first thing to do is to not think in short-term earnings, but rather think decades in advance. In a young market, the emergence of such companies is impossible in a matter of days, it takes time. I want to believe that we will become one of those. But in order to achieve this, we need time. And, perhaps, achieving this will take a long time, due to the solving of legal problems and whatnot. I think that in the next 5 years there will be either a giant company or a conglomerate of 10 companies that will lead the entire industry.

Returning to the question of a good system of accounting and transfer of property rights in and between games, we will present our solution for startups by the end of this year. I hope this will boost the development of the ecosystem as a whole. Of course, we will ensure that these startups do not try to use our platform for scams.

As you state on your site, your work is effectively blurring the lines between gaming and fintech. Again, how far do you see this going? Do you think that, say in 10 years, people will consider their online assets to be as important as their real-world assets (like the money in their bank accounts, for example)? Are you concerned that politics and regulators may try and spoil the fun, like they normally do, at some point?

Yes this is true.

We, as creators of the side-chain 2.0 platform, solve legal and reporting problems. In many ways, online assets are already the same as physical assets. For example, if you are a company and sold a virtual sword, you must pay taxes in dollars or euros, depending on the country. Although many states have already recognized this, it is too early to speak about regulation and normal accountability.

I think that everything will work out in a matter of 2-5 years, not 10.

Already there are banks that provide the same services for cryptocurrency as they do for fiat. While you cannot pay in Bitcoin in some countries, some of them still require for people to report their crypto holdings and pay taxes for them.

I am from Generation Y, with everything that that entails. I’ve seen people selling an apartment to buy a character in a game. Once I even read about a guy who sold his kidney to make his World of Warcraft character one of the best. Of course, this is crazy, but this is what surrounds me as a Gen. Y person.

So, virtual assets were already valuable for people even before the advent of blockchain technologies. Only now can we create a world that confirms that this is the case, even after centuries. And, if we talk about a truly distant future, then things that are virtual and not tangible will have an ever greater value. I definitely do not believe that money will exist on paper in 200 years. And we are laying the path to this future today.

As for regulation, paying taxes is not the worst. The main problem here relates to control; corrupt authorities of some countries may consider that regular taxes are not enough for them, and they will want to take everything they can from you. I want to believe in the common sense of people, but people act outside of logic and reason all the time. Sometimes control and regulation is necessary. General rules of the game are needed, taking into account the interests of different parties, both the side of the business and the client.

I see a future where technologies, due to decentralization and accessibility, can help an artist from a poor country to get sizeable revenue for their work, and an invaluable masterpiece to the customer at the same time, where both will be happy with the benefits they receive. Taxes do not matter in such a scheme.

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