Virtual Currency Games

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 instead of 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) real estate agent…

bitcoin have already been slowly gaining in maturity both in terms of their functionality and the financial infrastructure that enables them to be used as a credible alternative to non-virtual fiat currency. Though Bitcoin, the very first and most well known of the crypto-currencies was made in 2009 2009 2009 there have been forms of virtual currencies used in video games for more than 15 years. 1997’s Ultima Online was the initial notable attempt to incorporate a large scale virtual economy in a 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 on 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 as a result of the overall game mechanics which ensured that there is 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 was prohibited by the game’s designer to also sell virtual items to one another on eBay. In a real world phenomenon which 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 better and sought after. These characters would then be in love with eBay to Western gamers who have been 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 an expert in virtual currencies estimated that in 2002 EverQuest was the 77th richest country in the world, 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 exemplory case of a virtual economy to date whereby it’s virtual currency, the Linden Dollar which may be used to get or sell in-game goods and services can 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 a decade between 2002-13, Second Life having turn into a marketplace where players and businesses alike were able to design, promote and sell content they created. Real estate was a particularly lucrative commodity to trade, in 2006 Ailin Graef became the very first Second Life millionaire when she turned an initial 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 for example Ailin will be the exception to the rule however, only a recorded 233 users making more than $5000 in 2009 2009 from Second Lifestyle.

How to be paid in dollars for mining asteroids…

To date, the ability to generate non-virtual cash in video games has been of secondary design, the ball player having to proceed through non-authorised channels to exchange their virtual booty or they having to possess a degree of real life creative skill or business acumen which could be traded for cash. This could be set to change with the advent of video games being built from the ground up round the ‘plumbing’ of recognised digital currency platforms. The approach that HunterCoin has had is to ‘gamify’ what is usually the rather technical and automated procedure for creating digital currency. Unlike real world currencies which come into existence if they are printed by way of a Central bank, digital currencies are created by being ‘mined’ by users. The underlying source code of a specific digital currency which 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 is more susceptible to fraud than physical currency for the reason that it is possible to duplicate a unit of currency thereby causing inflation or altering the worthiness of a transaction after it has 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 each transaction that is made whereby using specialist hardware and software they make sure that data has not been tampered with. This is a computerized process for miner’s software albeit an extremely time consuming the one that involves plenty 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. Because it can take anything from several days to years for a person to successfully mine a coin sets of users combine their resources right into a mining ‘pool’, using the joint processing power of their computers to mine coins quicker.

HunterCoin the overall game sits within this type of blockchain for a digital currency also called HunterCoin. The act of playing the game replaces the automated procedure for mining digital currency and for the first time helps it be a manual one and without the need for expensive hardware. Using strategy, time and teamwork, players venture out onto a map searching for 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 can cash out their coins by depositing them to 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. As the game graphics are basic and significant rewards take time to accumulate HunterCoin is an experiment that might be viewed as the first video game 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 set 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 purpose of building their own galactic empire. Players will undoubtedly be rewarded for mining in DogeCoin, a more established form of digital currency which is currently used widely for micro-payments on various social media sites. DogeCoin may 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 really is traded for both digital and real fiat currencies on exchanges like Poloniex.

The future of video gaming?

Though it is early days 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 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 world outbreaks. It could be surmised that eventually in-game virtual economies could possibly be used as models to test economic theories and develop responses to massive failures predicated on observations of how players use digital currency with real value. Additionally it is an excellent test for the functionality and potential applications of digital currencies that 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 methods 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 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 competent digital currency like Bitcoin. During 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 simply 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 think it’s safe to state that right now even efforts such as this might only realistically result in enough change for an everyday 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 is improbable that rewards are ever likely to be more than micro-payments for the casual gamer. And perhaps this is a positive thing, because surely if you receives a commission for something it stops being a game any more?

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