Virtual Currency Games
Every little boy’s (and several grown men’s) dream of making a living by playing video gaming is edging nearer to reality. The recent release of HunterCoin and the in-development VoidSpace, games which reward players in digital currency rather than virtual princesses or gold stars point towards a future where one’s ranking on a scoreboard could possibly be rewarded in dollars, and sterling, euros and yen.
The story of the millionaire (virtual) agent…
Digital currencies have been slowly gaining in maturity both in terms of their functionality and the financial infrastructure that allows them to be used as a credible option to non-virtual fiat currency. Though Bitcoin, the 1st and most popular of the crypto-currencies was made in 2009 2009 2009 there were forms of virtual currencies found in video games for a lot more than 15 years. 1997’s Ultima Online was the first notable attempt to add a large scale virtual economy in a game. Players could collect gold coins by undertaking quests, battling monsters and finding treasure and spend these on armour, weapons or real estate. This was an early on incarnation of a virtual currency in that it existed purely within the game though it did mirror real life economics to the extent that the Ultima currency experienced inflation as a result of the overall game mechanics which ensured that there is a never ending supply of monsters to kill and therefore gold coins to collect.
Released in 1999, EverQuest took virtual currency gaming a step further, allowing players to trade virtual goods amongst themselves in-game and even though it was prohibited by the game’s designer to also sell virtual what to one another on eBay. In a genuine world phenomenon that was entertainingly explored in Neal Stephenson’s 2011 novel Reamde, Chinese gamers or ‘gold farmers’ were employed to play EverQuest and other such games full-time with the aim of gaining experience points to be able to level-up their characters thereby making them more powerful and popular. These characters would then be in love with eBay to Western gamers who were unwilling or unable to devote the hours to level-up their own characters. Based on the calculated exchange rate of EverQuest’s currency due to real life trading that took place Edward Castronova, Professor of Telecommunications at Indiana University and an expert in virtual currencies estimated that in 2002 EverQuest was the 77th richest country on the globe, somewhere between Russia and Bulgaria and its GDP per capita was higher than the People’s Republic of China and India.
Launched in 2003 and having reached 1 million regular users by 2014, Second Life could very well be the most complete example of a virtual economy to date whereby it’s virtual currency, the Linden Dollar and this can be used to buy or sell in-game goods and services can be exchanged for real life currencies via market-based exchanges. There have been a recorded $3.2 billion in-game transactions of virtual goods in the a decade between 2002-13, Second Life having turn into a marketplace where players and businesses alike could actually design, promote and sell content they created. Real estate was a particularly lucrative commodity to trade, in 2006 Ailin Graef became the 1st Second Life millionaire when she turned a short investment of $9.95 into over $1 million over 2.5 years through buying, selling and trading virtual real estate to other players. Examples such as for example Ailin will be the exception to the rule however, just a recorded 233 users making more than $5000 in ’09 2009 from Second Life activities.
How exactly to be paid in dollars for mining asteroids…
To date, the opportunity to generate non-virtual cash in video games has been of secondary design, the ball player having to proceed through non-authorised channels to switch their virtual booty or they having to possess a degree of real world creative skill or business acumen that could be traded for cash. This could be set to improve with the advent of video games being built from the bottom up around the ‘plumbing’ of recognised digital currency platforms. The approach that HunterCoin has taken is to ‘gamify’ what’s usually the rather technical and automated process of creating digital currency. Unlike real world currencies that come into existence if they are printed by a Central bank, digital currencies are manufactured by being ‘mined’ by users. The underlying source code of a specific digital currency that allows it to function is named the blockchain, an online decentralised public ledger which records all transactions and currency exchanges between individuals. Since digital currency is nothing more than intangible data it is more prone to fraud than physical currency in that it is possible to duplicate a unit of currency thereby causing inflation or altering the value of a transaction after it’s been made for personal gain. To make sure this does not happen the blockchain is ‘policed’ by volunteers or ‘miners’ who test the validity of each transaction that’s made whereby using specialist hardware and software they ensure that data is not tampered with. This is a computerized process for miner’s software albeit an extremely time consuming one which involves plenty of processing power from their computer. To reward a miner for verifying a transaction the blockchain releases a fresh unit of digital currency and rewards them with it as an incentive to help keep maintaining the network, thus is digital currency created. Since it may take anything from several days to years for a person to successfully mine a coin groups of users combine their resources into a mining ‘pool’, utilizing the joint processing power of these computers to mine coins more quickly.
HunterCoin the overall game sits within this type of blockchain for an electronic currency also called HunterCoin. The act of playing the game replaces the automated procedure for mining digital currency and for the very first time makes it a manual one and with no need for expensive hardware. Using strategy, time and teamwork, players venture out onto a map in search of coins and on finding some and returning safely to their base (other teams are out there trying to stop them and steal their coins) they are able to cash out their coins by depositing them into their own digital wallet, typically an app made to make and receive digital payments. 10% of the value of any coins deposited by players visit the miners maintaining HunterCoin’s blockchain and also a small percent of any coins lost whenever a player is killed and their coins dropped. While the game graphics are basic and significant rewards take time to accumulate HunterCoin is an experiment that might be seen as the first gaming with monetary reward built-in as a primary function.
Though still in development VoidSpace is a more polished approach towards gaming in a functioning economy. worldoftechnicalanalysis.com (MMORPG), VoidSpace is defined in space where players explore an ever-growing universe, mining natural resources such as asteroids and trading them for goods with other players with the goal of building their own galactic empire. Players will be rewarded for mining in DogeCoin, a more established type of digital currency which is currently used widely for micro-payments on various social media marketing sites. DogeCoin will also be currency of in-game trade between players and the methods to make in-game purchases. Like HunterCoin, DogeCoin is really a legitimate and fully functioning digital currency and like HunterCoin it could be traded for both digital and real fiat currencies on exchanges like Poloniex.
The future of video gaming?
Though it is start with regard to quality the release of HunterCoin and VoidSpace can be an interesting indication of what may be the next evolution for games. MMORPG’s are currently being considered as methods to model the outbreak of epidemics because of how player’s reactions to an unintended plague mirrored recorded hard-to-model areas of human behaviour to real life outbreaks. It could be surmised that eventually in-game virtual economies could be used as models to check economic theories and develop responses to massive failures based on observations of how players use digital currency with real value. It is also an excellent test for the functionality and potential applications of digital currencies which have the promise of moving beyond mere vehicles of exchange and into exciting regions of personal digitial ownership for instance. In the mean time, players now have the means to translate hours before a screen into digital currency and then dollars, sterling, euros or yen.
But before you quit your day job…
… it’s worth mentioning current exchange rates. It’s estimated a player could comfortably recoup their initial registration fee of just one 1.005 HunterCoin (HUC) for joining HunterCoin the game in 1 day’s play. Currently HUC cannot be exchanged right to USD, one must convert it right into a more established digital currency like Bitcoin. At the time of writing the exchange rate of HUC to Bitcoin (BC) is 0.00001900 as the exchange rate of BC to USD is $384.24. 1 HUC traded to BC and then to USD, before any transaction fees were taken into consideration would equate to… $0.01 USD. This is not to say that as a player becomes more adept that they cannot grow their team of virtual CoinHunters and maybe employ a few ‘bot’ programmes that could automatically play the game under the guise of another player and earn coins for them aswell but I believe it’s safe to say that at the moment even efforts such as this might only realistically bring about enough change for an everyday McDonalds. Unless players are willing to submit to intrusive in-game advertising, share personal data or join a casino game such as CoinHunter that’s built on the Bitcoin blockchain it is improbable that rewards are ever likely to be a lot more than micro-payments for the casual gamer. And maybe this is a good thing, because surely if you get paid for something it stops being truly a game any more?