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Crypto Terms:  Letter G

What are Game Channels?

Meaning:
Game Channels - allow blockchain games to run in near real-time by minimizing block confirmation time.
medium
3 minutes

Let's find out Game Channels meaning, definition in crypto, what are Game Channels, and all other detailed facts.

Before we start explaining what exactly game channels are, let’s outline the basic working principles of blockchain games. Blockchain games guarantee fair play due to being accessible only through fully decentralized and trustless environments. 

It’s still important to note that blockchain games are not without faults and still experience some technical difficulties. Some of them arise as a consequence of scalability issues.

Let’s take a look at multiplayer games with a massive player base as an example. These types of games require a lot of file and data storage for the number of players it accumulates. This data is stored within the underlying blockchain network.

Moreover, blockchain games have to create a transaction for each move. This is a time-consuming process that greatly depends on network congestion. It makes these types of games struggle with speed. In the case of blockchain multiplayer and player-vs-player (PvP) games, quick actions are key to winning so the delay should be as minimal as possible.

This is where Game channels come into play. Game channels allow building scalability within any blockchain network without slowing down the transaction speeds. For instance, this way blockchains can integrate lots of dApps and support a wide range of blockchain games. 

By using game channels, blockchain games enable secure off-chain transactions between the players. Therefore, game channels enable the option to build off-chain private channels that run near real-time and parallel to the main chain. 

In the case of game channels, disputes can be resolved without a third-party or central authority. In some sense, game channels are payment channels for every single game.

We’ve established that the game channels' general purpose is to speed up real-time PvP gameplay.

How do Game Channels Work?

The majority of blockchain game players experience delays between moves. These delays happen because blockchain games usually add transactions per each move, then mine them into blocks, and activate them. However, there is a way to minimize the waiting time using game channels.

This is done by moving the gameplay itself to a secure off-chain network where the players are able to play in close to real-time

For example, let's say two players want to compete for coins. Together, they establish the game rules, chip in for the prize money, open the game channel, and start playing. Cheating without getting caught is virtually impossible since each player is connected to the public blockchain network, and any actions done against the rules are easily provable due to the trustless element. When there is a clear winner between the players, the prize money is released to the winning player’s account through the smart contract. Then, the game channel is closed.

Bitcoin market has both, holders that are long-term investors, and opportunists that are short-term investors. So, low-volatility periods are when holders will purchase their assets. Opportunists, on the other hand, will end such periods and influence volatility when they step into the market.<\/p>\n<p>Therefore, each type of investor obtains a few methods they can utilize, depending on the actions of the other investor. They are all acting in their own best interests, fighting for asymmetric benefits while working together to increase the total value of <strong>BTC.<\/strong><\/p>\n<p>This is an excellent implementation of game theory since it examines how different groups of people react and respond to the actions of the other group.<\/p>\n<h3>The Prisoner&rsquo;s Dilemma<\/h3>\n<p>One of the most well-known game theory examples in practice is the prisoner's dilemma.<strong> It depicts a situation in which two criminals are being questioned after being captured. <\/strong>Each suspect is questioned in a separate room and is unable to interact with the other.<\/p>\n<p>The prosecutor attempts to get the convicts to testify against each other in order to minimize their charges. If one criminal testifies against the other, he may be released while the other is detained for an extended amount of time.<\/p>\n<p>Both are arrested for a shorter amount of time if they both testify against each other. And if they both decide not to betray each other and remain silent, they are merely condemned to the bare minimum of time in jail owing to <strong>a lack of proof<\/strong>.<\/p>\n<p>The prisoner's dilemma has numerous variations, and it <strong>exemplifies the concept of utilizing game theory models to examine human behavior and potential consequences.<\/strong><\/p>","definition":"is an applied mathematics method used to research human activities based on the specific decisions people make in response to certain acts.","status":"published","meta_title":"What is Game Theory? Definition & Meaning | Crypto Wiki","meta_description":"Game Theory meaning: Game Theory - is an applied mathematics method used to research human activities based on the specific decisions people make in response to certain acts.","meta_keywords":null}" :prev-section="{"id":419,"wikipedia_url":"https:\/\/en.wikipedia.org\/wiki\/Gain_(accounting)","level":"easy","author_id":1,"created_at":"2023-06-19T06:58:59.000000Z","updated_at":"2024-01-02T18:10:01.000000Z","slug":"what-are-gains","title":"What are Gains?","section":"G","keyword":"Gains","content":"<p>Gains can also be called <strong>profits<\/strong> and they refer to an increase in value or profit. Gains arise from buying a physical or digital asset and then selling it for a higher price. As an example, a trader can purchase <strong><a href=https://www.bitdegree.org/"//crypto//buy-ethereum-eth/">Ethereum at <strong>$15K<\/strong> and then sell it at <strong>$20K,<\/strong> gaining <strong>$5K.<\/strong><\/p>\n<p>Gains happen in several formats, hence, there are <strong>gross and net profits.<\/strong><\/p>\n<p>Gross profits are calculated before deducting expenditures and other costs paid between the acquisition and sale of an item. <strong>Net yields<\/strong>, on the other hand, are the ultimate amount after fees are deducted. Gains are taxed in the majority of zones.<\/p>\n<p>Nonetheless, the tax owed is mostly determined by the exchanged asset. Just the United States and a few other countries have taxed gains. Cryptocurrency earnings in other locations stay untaxed as a result of the global legislative uncertainty.<\/p>\n<p>Another example would be when the investor obtained a<strong> $1 transaction fee<\/strong>, in this scenario, the initial gain is less than the transaction costs.<\/p>\n<p>Some additional aspects like physical property, agent&rsquo;s fees, maintenance costs, and so on, are included in the profits made. On financial books, gains take over the column of the credit.<\/p>\n<p>Also, gains can have either <strong>realized or unrealized profits<\/strong>. Speaking of unrealized profits, these happen when an asset&rsquo;s price increases, but the investor refuses to sell it during this phase.&nbsp;<\/p>\n<p>For instance, usually, unrealized profits in the cryptocurrency area, are caused by a very unstable market nature, where prices can jump between two price radicals through a very short time.<\/p>","definition":"are the increased value or profit.","status":"published","meta_title":"What are Gains? Definition & Meaning | Crypto Wiki","meta_description":"Gains meaning: Gains - are the increased value or profit.","meta_keywords":null}" :model="{"id":356,"wikipedia_url":"https:\/\/en.wikipedia.org\/wiki\/Blockchain_game","level":"medium","author_id":1,"created_at":"2023-06-19T06:58:59.000000Z","updated_at":"2024-01-02T18:17:22.000000Z","slug":"what-are-game-channels","title":"What are Game Channels?","section":"G","keyword":"Game Channels","content":"<p>Before we start explaining what exactly game channels are, let&rsquo;s outline the basic working principles of blockchain games. Blockchain games guarantee fair play due to being accessible only through fully decentralized and trustless environments.&nbsp;<\/p>\n<p>It&rsquo;s still important to note that <strong>blockchain games<\/strong> are not without faults and still experience some technical difficulties. Some of them arise as a consequence of <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-scaling-problem/">scalability issues<\/strong><\/a>.<\/p>\n<p>Let&rsquo;s take a look at multiplayer games with a massive player base as an example. These types of games require a lot of file and data storage for the number of players it accumulates. This data is stored within the underlying <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-blockchain/">blockchain network.<\/p>\n<p>Moreover, blockchain games have to create a transaction for each move. This is a time-consuming process that greatly depends on network congestion. It makes these types of games struggle with speed. In the case of blockchain multiplayer and player-vs-player (PvP) games, quick actions are key to winning so the delay should be as minimal as possible.<\/p>\n<p>This is where Game channels come into play. Game channels allow building scalability within any blockchain network without slowing down the transaction speeds. For instance, this way blockchains can integrate lots of <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-are-decentralized-applications-dapps/">dApps and support a wide range of blockchain games.&nbsp;<\/p>\n<p>By using game channels, blockchain games enable secure <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-off-chain-transaction/">off-chain transactions<\/strong><\/a> between the players. Therefore, game channels enable the option to build off-chain private channels that run near real-time and parallel to the main chain.&nbsp;<\/p>\n<p>In the case of game channels, disputes can be resolved without a third-party or central authority. In some sense, game channels are payment channels for every single game.<\/p>\n<p>We&rsquo;ve established that the game channels' general purpose is to speed up real-time PvP gameplay.<\/p>\n<p>How do Game Channels Work?<\/p>\n<p>The majority of blockchain game players experience delays between moves. These delays happen because blockchain games usually add transactions per each move, then mine them into blocks, and activate them. However, there is a way to minimize the waiting time using game channels.<\/p>\n<p>This is done by <strong>moving the gameplay itself to a secure off-chain network where the players are able to play in close to real-time<\/strong>.&nbsp;<\/p>\n<p>For example, let's say two players want to compete for coins. Together, they establish the game rules, chip in for the prize money, open the game channel, and start playing. Cheating without getting caught is virtually impossible since each player is connected to the public blockchain network, and any actions done against the rules are easily provable due to the trustless element. When there is a clear winner between the players, the prize money is released to the winning player&rsquo;s account through the smart contract. Then, the game channel is closed.<\/p>","definition":"allow blockchain games to run in near real-time by minimizing block confirmation time.","status":"published","meta_title":"What are Game Channels? Definition & Meaning | Crypto Wiki","meta_description":"Game Channels meaning: Game Channels - allow blockchain games to run in near real-time by minimizing block confirmation time.","meta_keywords":null,"author":{"id":1,"user_id":1,"created_at":"2023-05-03T14:30:55.000000Z","updated_at":"2023-05-11T07:18:20.000000Z","title":"Editor-In-Chief","slug":"aaron-s-editor-in-chief","description":"<p>Having completed a Master&rsquo;s degree on Economics, Politics &amp; Culture for the East Asia region, Aaron has written scientific papers with a comparative analysis of the differences between US&rsquo; Western and Japan&rsquo;s Collective forms of capitalism, 1945-2020.<\/p>\n<p>With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He&rsquo;s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.<\/p>\n<p>Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain &amp; Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.<\/p>\n<p>Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.<\/p>","user":{"id":1,"first_name":"Aaron","last_name":"S.","email":"aaron@bitdegree.org","email_sanitized":"aaron@bitdegree.org","email_verified_at":"2023-12-01T09:40:20.000000Z","must_verify_email":false,"is_registered_with_wallet":false,"status":"active","country":"LT","last_connected_ip":"88.119.132.125","image_id":2641,"referral_token":"05TMu2NysXOCn525","referred_by":null,"created_at":"2023-05-03T14:30:55.000000Z","updated_at":"2024-01-09T15:22:21.000000Z","full_name":"Aaron S."}}}" :chapter-list="[{"id":1,"title":"Blockchain","slug":"blockchain","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-blockchain.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/blockchain-101.jpg","rating":100,"sections":[{"chapter_id":1,"order":1,"slug":"what-is-blockchain","title":"What is the Blockchain?","status":"published","modified_content":null},{"chapter_id":1,"order":2,"slug":"decentralized-blockchain","title":"Anonymous & Decentralized Blockchains: The Cornerstone of Crypto","status":"published","modified_content":null},{"chapter_id":1,"order":3,"slug":"blockchain-transaction","title":"What is a Blockchain Transaction in Crypto?","status":"published","modified_content":null},{"chapter_id":1,"order":4,"slug":"crypto-fees","title":"The Different Types of Crypto Fees Explained","status":"published","modified_content":null},{"chapter_id":1,"order":5,"slug":"what-is-bridging-in-crypto","title":"The Key Notion Behind the Concept of Bridging in Crypto","status":"published","modified_content":null},{"chapter_id":1,"order":6,"slug":"types-of-blockchains","title":"Different Types of Blockchains: What to Look Out For?","status":"published","modified_content":null}]},{"id":2,"title":"Cryptocurrencies","slug":"cryptocurrencies","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-cryptocurrencies.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/cryptocurrencies-101.jpg","rating":100,"sections":[{"chapter_id":2,"order":1,"slug":"what-is-a-cryptocurrency","title":"What is a Cryptocurrency?","status":"published","modified_content":null},{"chapter_id":2,"order":2,"slug":"how-does-cryptocurrency-work","title":"How Does Cryptocurrency Work?","status":"published","modified_content":null},{"chapter_id":2,"order":3,"slug":"is-cryptocurrency-a-good-investment","title":"Is Cryptocurrency a Good Investment? The Pros & Cons","status":"published","modified_content":null},{"chapter_id":2,"order":4,"slug":"coin-vs-token","title":"Coin VS Token: How Do They Differ?","status":"published","modified_content":null},{"chapter_id":2,"order":5,"slug":"what-are-stablecoins","title":"What are Stablecoins, Altcoins & Wrapped Coins?","status":"published","modified_content":null},{"chapter_id":2,"order":6,"slug":"what-is-a-bitcoin","title":"Bitcoin: the Pioneer of the Crypto World","status":"published","modified_content":null},{"chapter_id":2,"order":7,"slug":"what-is-ethereum","title":"The Ultimate Blockchain for dApp Creation: Ethereum","status":"published","modified_content":null},{"chapter_id":2,"order":8,"slug":"what-is-cardano-in-crypto","title":"What is Cardano and What is It Used For?","status":"published","modified_content":null},{"chapter_id":2,"order":9,"slug":"what-is-shiba-inu-coin","title":"Shiba Inu: the Dogecoin 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Trailblazer","status":"published","modified_content":null},{"chapter_id":2,"order":16,"slug":"what-is-algorand-crypto","title":"Did Algorand Truly Solve the Blockchain Trilemma?","status":"published","modified_content":null},{"chapter_id":2,"order":17,"slug":"what-is-olympus-dao","title":"Does Olympus DAO Have Anything to Do With Mythology?","status":"published","modified_content":null},{"chapter_id":2,"order":18,"slug":"what-is-avax","title":"Is Avalanche Network (AVAX) Rightfully Called the Future of DeFi?","status":"published","modified_content":null},{"chapter_id":2,"order":19,"slug":"what-is-monero-coin","title":"Monero: Where Cryptocurrency Meets Cryptography","status":"published","modified_content":null},{"chapter_id":2,"order":20,"slug":"what-is-ripple-xrp","title":"Is Ripple \"it\" When it Comes to Cross-Border Transactions?","status":"published","modified_content":null},{"chapter_id":2,"order":21,"slug":"practical-use-of-cryptocurrencies","title":"The Practical Use of Crypto","status":"published","modified_content":null}]},{"id":3,"title":"Crypto Exchanges","slug":"crypto-exchanges","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-crypto-exchanges.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/crypto-exchanges-101.jpg","rating":80,"sections":[{"chapter_id":3,"order":1,"slug":"how-do-cryptocurrency-exchanges-work","title":"How do Cryptocurrency Exchanges Work?","status":"published","modified_content":null},{"chapter_id":3,"order":2,"slug":"dex-vs-cex","title":"DEX VS CEX: Two Sides of the Crypto Exchange Industry","status":"published","modified_content":null},{"chapter_id":3,"order":3,"slug":"crypto-day-trading","title":"Crypto Day Trading: The Difference Between Buying, Trading, and Swapping","status":"published","modified_content":null},{"chapter_id":3,"order":4,"slug":"kyc-crypto","title":"KYC & AML: The Key to Complying With Legal Industry Standards","status":"published","modified_content":null},{"chapter_id":3,"order":5,"slug":"how-to-buy-crypto","title":"From Fiat to Crypto: How to Buy Crypto for the First Time","status":"published","modified_content":null},{"chapter_id":3,"order":6,"slug":"fiat-to-crypto","title":"Taking Profits: Turning Crypto Into Fiat","status":"published","modified_content":null},{"chapter_id":3,"order":7,"slug":"how-to-use-crypto","title":"You\u2019ve Got Crypto: What Can You Do With It?","status":"published","modified_content":null}]},{"id":4,"title":"Crypto Wallets","slug":"crypto-wallets","updated":false,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-crypto-wallets.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/crypto-wallets-101.jpg","rating":80,"sections":[{"chapter_id":4,"order":1,"slug":"what-is-a-crypto-wallet","title":"What is a Crypto Wallet?","status":"published","modified_content":null},{"chapter_id":4,"order":2,"slug":"hot-wallet-vs-cold-wallet","title":"Hot Wallet VS Cold Wallet: Which One to Pick?","status":"published","modified_content":null},{"chapter_id":4,"order":3,"slug":"non-custodial-wallet","title":"What are Non-Custodial Crypto Wallets?","status":"published","modified_content":null},{"chapter_id":4,"order":4,"slug":"what-is-metamask","title":"Metamask: The Leading Non-Custodial Wallet","status":"published","modified_content":null},{"chapter_id":4,"order":37,"slug":"how-safe-is-cryptocurrency","title":"The Key Crypto Wallet Safety Practices: How Safe Can Crypto Be?","status":"published","modified_content":null}]},{"id":5,"title":"NFTs","slug":"nfts","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-nfts.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/nfts-101.jpg","rating":100,"sections":[{"chapter_id":5,"order":2,"slug":"how-to-trade-nfts","title":"NFT Trading: The Ins and Outs","status":"published","modified_content":null},{"chapter_id":5,"order":3,"slug":"buying-nft","title":"Tips and Tricks of Choosing the Right NFTs","status":"published","modified_content":null},{"chapter_id":5,"order":4,"slug":"how-to-store-nft","title":"How to Store NFTs: Best Practices","status":"published","modified_content":null},{"chapter_id":5,"order":5,"slug":"how-to-create-an-nft","title":"How to Create Your Own NFTs?","status":"published","modified_content":null},{"chapter_id":5,"order":6,"slug":"how-to-make-passive-money-with-nft","title":"Making Passive Money with NFTs","status":"published","modified_content":null}]},{"id":6,"title":"dApps & Defi","slug":"dapps-and-defi","updated":true,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-dapps.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/dapps-defi-101.jpg","rating":80,"sections":[{"chapter_id":6,"order":1,"slug":"what-are-nfts","title":"What are Non-Fungible Tokens (NFTs)?","status":"published","modified_content":null},{"chapter_id":6,"order":1,"slug":"what-is-defi","title":"What is Decentralized Finance (DeFi)?","status":"published","modified_content":null},{"chapter_id":6,"order":2,"slug":"what-is-defi-2-0","title":"DeFi 2.0: The New Version of Decentralized Finance","status":"published","modified_content":null},{"chapter_id":6,"order":3,"slug":"what-are-dapps-in-crypto","title":"What Are dApps and How Do They Work?","status":"published","modified_content":null},{"chapter_id":6,"order":4,"slug":"defi-dapps","title":"Picking the Right dApps: Dos and Don'ts","status":"published","modified_content":null},{"chapter_id":6,"order":5,"slug":"what-is-web-3-0","title":"Web 3.0: The Future of the Internet","status":"published","modified_content":null},{"chapter_id":6,"order":6,"slug":"what-are-smart-contracts","title":"What is the Core Purpose of Smart Contracts?","status":"published","modified_content":null},{"chapter_id":6,"order":7,"slug":"what-is-a-dao-in-crypto","title":"The Notion of a Decentralized Autonomous Ogranization (DAO)","status":"published","modified_content":null},{"chapter_id":6,"order":8,"slug":"what-is-staking-in-crypto","title":"What is the Goal of Staking Crypto Assets?","status":"published","modified_content":null},{"chapter_id":6,"order":9,"slug":"what-is-liquidity-pool-in-crypto","title":"What is a Liquidity Pool and How Does It Work?","status":"published","modified_content":null},{"chapter_id":6,"order":10,"slug":"what-is-automated-market-maker","title":"Automated Market Maker: the Cornerstone of the Decentralized Crypto Exchange Industry","status":"published","modified_content":null},{"chapter_id":6,"order":11,"slug":"what-is-yield-farming-in-crypto","title":"The Main Yield Farming Techniques","status":"published","modified_content":null},{"chapter_id":6,"order":12,"slug":"what-is-an-oracle-in-crypto","title":"Crypto Oracles: The Link Between Blockchain and Outside World Data","status":"published","modified_content":null},{"chapter_id":6,"order":13,"slug":"crypto-gambling","title":"The Peculiarities of Decentralized Crypto Gambling","status":"published","modified_content":null},{"chapter_id":6,"order":14,"slug":"what-is-the-metaverse","title":"Metaverse: A New Perception of Reality","status":"published","modified_content":null}]},{"id":7,"title":"Trading & Investing","slug":"trading-and-investing","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-crypto-trading.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/crypto-trading-101.jpg","rating":80,"sections":[{"chapter_id":7,"order":1,"slug":"where-to-trade-crypto","title":"Where Can You Trade Cryptocurrencies?","status":"published","modified_content":null},{"chapter_id":7,"order":2,"slug":"how-to-invest-in-crypto","title":"Investing in Crypto: What Investing Options Do You Have?","status":"published","modified_content":null},{"chapter_id":7,"order":3,"slug":"ico-vs-ido","title":"ICO vs IDO vs IEO: Which One is the One?","status":"published","modified_content":null},{"chapter_id":7,"order":4,"slug":"what-is-an-airdrop","title":"What are Crypto Airdrops and How to Get Them?","status":"published","modified_content":null},{"chapter_id":7,"order":5,"slug":"how-to-get-free-crypto","title":"How to Get Free Crypto Assets?","status":"published","modified_content":null},{"chapter_id":7,"order":6,"slug":"how-to-arbitrage-crypto","title":"What is Crypto Arbitrage: The Main Principles","status":"published","modified_content":null},{"chapter_id":7,"order":7,"slug":"what-is-a-perpetual-contract","title":"Perpetual Contracts: Futures Contracts Without an Expiration Date","status":"published","modified_content":null},{"chapter_id":7,"order":8,"slug":"what-is-fud","title":"What is FUD: How to Use It to Your Advantage While Investing in Crypto?","status":"published","modified_content":null},{"chapter_id":7,"order":9,"slug":"investing-in-cryptocurrency","title":"Investing in Cryptocurrency: How to Manage Your Risks?","status":"published","modified_content":null},{"chapter_id":7,"order":10,"slug":"what-is-a-rug-pull-in-crypto","title":"What is a Rug Pull in Crypto?","status":"published","modified_content":null},{"chapter_id":7,"order":11,"slug":"how-to-avoid-rug-pulls-in-crypto","title":"How to Spot and Avoid Rug Pulls?","status":"published","modified_content":null},{"chapter_id":7,"order":12,"slug":"how-to-avoid-crypto-taxes","title":"The Key Legal Techniques of Avoiding Crypto Taxes","status":"published","modified_content":null}]},{"id":8,"title":"Crypto 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