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 instead of virtual princesses or gold stars point towards a future 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…

Digital currencies have already been slowly gaining in maturity both with regards to their functionality and the financial infrastructure that allows them to be used as a credible option to non-virtual fiat currency. Though Bitcoin, the very first and most well known of the crypto-currencies was created 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 first 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 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 because of the 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 though it had been prohibited by the game’s designer to also sell virtual items to each other on eBay. In a genuine world phenomenon which 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 purpose 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 have been unwilling or unable to put in the hours to level-up their own characters. Based on the calculated exchange rate of EverQuest’s currency due to the real world 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 on the planet, somewhere within Russia and Bulgaria and its own GDP per capita was greater 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 is often used to get or sell in-game goods and services could 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 a decade between 2002-13, Second Life having become a marketplace where players and businesses alike were able to design, promote and sell content that 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 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 Ailin are the exception to the rule however, just a recorded 233 users making a lot more than $5000 in 2009 2009 from Second Lifestyle.

How exactly to be paid in dollars for mining asteroids…

To date, the opportunity to generate non-virtual cash in video gaming has been of secondary design, the player having to proceed through non-authorised channels to exchange their virtual booty or they needing 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 around the ‘plumbing’ of recognised digital currency platforms. The approach that HunterCoin has taken is to ‘gamify’ what’s typically the rather technical and automated procedure for creating digital currency. Unlike real life currencies that 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 particular 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 only intangible data it is more susceptible 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 every transaction that’s made whereby using 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 one which involves a lot 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. 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’, utilizing the joint processing power of these computers to mine coins more quickly.

HunterCoin the overall game sits within such a blockchain for an electronic currency also known as HunterCoin. The act of playing the overall game replaces the automated procedure for mining digital currency and for the 1st 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 on the market 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 go to 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 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 really 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 goal of building their very own galactic empire. Bitcoin Era will be rewarded for mining in DogeCoin, a more established form of digital currency that is currently used widely for micro-payments on various social media marketing sites. DogeCoin may also be currency of in-game trade between players and the methods to make in-game purchases. Like HunterCoin, DogeCoin is a legitimate and fully functioning digital currency and like HunterCoin it is usually traded for both digital and real fiat currencies on exchanges like Poloniex.

The future of video games?

Though it is early days regarding quality the release of HunterCoin and VoidSpace is an interesting indication of what may be the next evolution for games. MMORPG’s are currently 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 could be surmised that eventually in-game virtual economies could 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. 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 areas of personal digitial ownership for example. In the mean time, players will have the means to translate hours before 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 a player could comfortably recoup their initial registration fee of just one 1.005 HunterCoin (HUC) for joining HunterCoin the overall game in 1 day’s play. Currently HUC can’t be exchanged right to USD, one must convert it into a more established digital currency like Bitcoin. During writing the exchange rate of HUC to Bitcoin (BC) is 0.00001900 while 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 not to say that as a new player becomes more adept they could not grow their team of virtual CoinHunters and maybe employ a few ‘bot’ programmes that could automatically play the game beneath the guise of another player and earn coins for them as well but I think it’s safe to state that right now even efforts like this might only realistically bring about enough change for a daily McDonalds. Unless players are willing to submit to intrusive in-game advertising, share personal data or join a casino game such as CoinHunter that is 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 get paid for something it stops being truly a game any more?