Virtual Currency Games
Every little boy’s (and several grown men’s) dream of earning money 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 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 already been slowly gaining in maturity both with regards to their functionality and the financial infrastructure that enables them to be used as a credible option to non-virtual fiat currency. Though Bitcoin, the 1st and most well known of the crypto-currencies was made in 2009 2009 2009 there were forms of virtual currencies used in video games for more than 15 years. 1997’s Ultima Online was the initial notable attempt to add 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 incarnation of a virtual currency for the reason that it existed purely within the 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 way to obtain 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 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 along with other such games full-time with the aim of gaining experience points so as to level-up their characters thereby making them better and sought after. These characters would then be sold on eBay to Western gamers who were unwilling or unable to devote the hours to level-up their own characters. Using the calculated exchange rate of EverQuest’s currency because of the real world 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 on the planet, 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 is perhaps the most complete exemplory case of a virtual economy to date whereby it’s virtual currency, the Linden Dollar that may be used to buy or sell in-game goods and services can be exchanged for real world currencies via market-based exchanges. There were a recorded $3.2 billion in-game transactions of virtual goods in the 10 years between 2002-13, Second Life having become 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 1st 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 real estate to other players. Examples such as Ailin will be the exception to the rule however, only a recorded 233 users making a lot more than $5000 in ’09 2009 from Second Lifestyle.
How exactly to be paid in dollars for mining asteroids…
To date, the ability to generate non-virtual cash in video gaming has been of secondary design, the 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 gaming 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 when 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 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 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 worthiness 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 each transaction that’s made whereby with the aid of specialist hardware and software they make sure that data is not tampered with. This is an automatic process for miner’s software albeit an exceptionally 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. Because 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 quicker.
HunterCoin the game sits within such a blockchain for an electronic currency also called HunterCoin. The act of playing the overall game replaces the automated procedure for 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 made to make and receive digital payments. 10% of the worthiness of any coins deposited by players visit the miners maintaining HunterCoin’s blockchain and also a small percent of any coins lost when a player is killed and their coins dropped. While the game graphics are basic and significant rewards take time to accumulate HunterCoin can be an experiment that might be seen as the first video game with monetary reward built-in as a primary function.
Though still in development VoidSpace is really 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 very own galactic empire. Players will be rewarded for mining in DogeCoin, a 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 means to make in-game purchases. Like HunterCoin, DogeCoin is really a legitimate and fully functioning digital currency and like HunterCoin it can be traded for both digital and real fiat currencies on exchanges like Poloniex.
The future of video gaming?
Though it is early days regarding 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 aspects of human behaviour to real life outbreaks. It could be surmised that eventually in-game virtual economies could be used as models to test economic theories and develop responses to massive failures based on observations of how players use digital currency with real value. Additionally it is a good test for the functionality and potential applications of digital currencies that have the promise of moving beyond mere vehicles of exchange and into exciting areas of personal digitial ownership for example. In the mean time, players will have the methods to translate hours in front of a screen into digital currency and 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 just one 1.005 HunterCoin (HUC) for joining HunterCoin the game in 1 day’s play. Currently HUC can’t be exchanged right to USD, one must convert it right into a more established 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 to USD, before any transaction fees were taken into account would mean… $0.01 USD. This is simply not to say that as a player becomes more adept they could not grow their team of virtual CoinHunters and maybe hire a few ‘bot’ programmes that would 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 right now even efforts like 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 game such as CoinHunter that’s built on the Bitcoin blockchain it really is improbable that rewards are ever apt to be a lot more than micro-payments for the casual gamer. And perhaps Bitcoin Evolution Review is a positive thing, because surely if you receives a commission for something it stops being truly a game any more?