Virtual Currency Games

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Every little boy’s (and several grown men’s) dream of making a living by playing video games 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 another where one’s ranking on a scoreboard could be rewarded in dollars, and sterling, euros and yen.

The story of the millionaire (virtual) agent…

Digital currencies have already been slowly gaining in maturity both in terms of their functionality and the financial infrastructure that allows them to be utilized as a credible alternative 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 used in video games for a lot more than 15 years. 1997’s Ultima Online was the initial notable attempt to incorporate a large scale virtual economy in a casino game. Players could collect coins by undertaking quests, battling monsters and finding treasure and spend these on armour, weapons or property. This was an early incarnation of a virtual currency in that it existed purely within the overall game though it did mirror real world economics to the extent that the Ultima currency experienced inflation because of the overall game mechanics which ensured that there was a never ending supply of monsters to kill and thus 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 had been prohibited by the game’s designer to also sell virtual what to one another on eBay. In a real world phenomenon that was entertainingly explored in Neal Stephenson’s 2011 novel Reamde, Chinese gamers or ‘gold farmers’ were employed to play EverQuest along with other such games full-time with the aim of gaining experience points in order to level-up their characters thereby making them better 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 as a result of real life trading that occurred Edward Castronova, Professor of Telecommunications at Indiana University and a specialist in virtual currencies estimated that in 2002 EverQuest was the 77th richest country in the world, somewhere within 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 is perhaps the most complete exemplory case of a virtual economy up to now whereby it’s virtual currency, the Linden Dollar which can be used to buy or sell in-game goods and services could be exchanged for real world currencies via market-based exchanges. There have been a recorded $3.2 billion in-game transactions of virtual goods in the 10 years between 2002-13, Second Life having turn into a marketplace where players and businesses alike were able to design, promote and sell content that they created. Real estate was an especially 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 property to other players. Examples such as Ailin will be the exception to the rule however, only a recorded 233 users making more than $5000 in 2009 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 go through non-authorised channels to exchange their virtual booty or they having to possess a degree of real world creative skill or business acumen which could be traded for cash. This may be set to change with the advent of video games being built from the bottom up round 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 life currencies which come into existence if they are printed by a Central bank, digital currencies are created when you are ‘mined’ by users. The underlying source code of a specific digital currency that allows it to function is called 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 really is more prone to fraud than physical currency for the reason 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 will not happen the blockchain is ‘policed’ by volunteers or ‘miners’ who test the validity of every transaction that is made whereby with the aid of specialist hardware and software they make sure that data has not been tampered with. This is an automatic process for miner’s software albeit an extremely time consuming the one that involves a lot of processing power from their computer. To reward a miner for verifying a transaction the blockchain releases a new 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 an individual to successfully mine a coin groups of users combine their resources into a mining ‘pool’, using the joint processing power of these computers to mine coins quicker.

HunterCoin the game sits within such a blockchain for a digital currency also known as HunterCoin. The act of playing the overall game replaces the automated process of mining digital currency and for the first time makes it a manual one and without the need for expensive hardware. Using strategy, time and teamwork, players go out onto a map searching for coins and on finding some and returning safely with their base (other teams are out there trying to stop them and steal their coins) they can cash out their coins by depositing them into their own digital wallet, typically an app designed to make and receive digital payments. 10% of the value of any coins deposited by players go to the miners maintaining HunterCoin’s blockchain and also a small percent of any coins lost whenever a player is killed and their coins dropped. As Bitcoin Revolution are basic and significant rewards remember 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. A Massively Multiplayer Online Roleplaying Game (MMORPG), VoidSpace is defined in space where players explore an ever-growing universe, mining natural resources such as for example asteroids and trading them for goods with other players with the purpose of building their very own galactic empire. Players will undoubtedly be rewarded for mining in DogeCoin, a far more established type of digital currency that is currently used widely for micro-payments on various social media 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 might be traded for both digital and real fiat currencies on exchanges like Poloniex.

The future of video games?

Though it is start when it comes 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 being considered as ways 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 may 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 example. In the mean time, players now have the means to translate hours in front of a screen into digital currency and then dollars, sterling, euros or yen.

But before you quit your entire day job…

… it’s worth mentioning current exchange rates. It’s estimated that a player could comfortably recoup their initial registration fee of 1 1.005 HunterCoin (HUC) for joining HunterCoin the game in 1 day’s play. Currently HUC cannot be exchanged directly 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 mean… $0.01 USD. This is simply not to say that as a new player becomes more adept that they cannot grow their team of virtual CoinHunters and maybe employ a few ‘bot’ programmes that would automatically play the game under the guise of another player and earn coins for them as well but I think it’s safe to say that right now even efforts such as this might only realistically result in enough change for a daily McDonalds. Unless players are prepared 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 really is improbable that rewards are ever apt to be more than micro-payments for the casual gamer. And perhaps this is a positive thing, because surely if you get paid for something it stops being truly a game any more?