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 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…

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 alternative 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 found 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 gold coins by undertaking quests, battling monsters and finding treasure and spend these on armour, weapons or real estate. 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 because 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 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 and other such games full-time with the aim of gaining experience points in order to level-up their characters thereby making them more powerful and sought after. These characters would then be sold on eBay to Western gamers who have been unwilling or unable to devote the hours to level-up their own characters. Using the calculated exchange rate of EverQuest’s currency as a result 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 own 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 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 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 an especially 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 ’09 2009 from Second Life activities.

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 proceed through non-authorised channels to switch their virtual booty or they needing to possess a degree of real world creative skill or business acumen that could be traded for cash. This could 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 is typically the rather technical and automated procedure for creating digital currency. Unlike real world 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 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 really is more susceptible to fraud than physical currency in that you’ll be able 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 does not happen the blockchain is ‘policed’ by volunteers or ‘miners’ who test the validity of every 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 exceptionally time consuming the one that involves a great deal of processing power from their computer. To reward Bitcoin Era Official 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 may take anything from several days to years for an individual to successfully mine a coin groups of users combine their resources right into a mining ‘pool’, using the joint processing power of these computers to mine coins more quickly.

HunterCoin the game sits within this type of 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 with no need for expensive hardware. Using strategy, time and teamwork, players go 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 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 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 remember 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 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 for example asteroids and trading them for goods with other players with the goal of building their very own galactic empire. Players will be rewarded for mining in DogeCoin, a far more established type 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 means to make in-game purchases. Like HunterCoin, DogeCoin is 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 regards to quality the release of HunterCoin and VoidSpace is an interesting indication of what could 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 aspects of human behaviour to real life 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 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 1 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 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 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 under the guise of another player and earn coins for them as well but I believe it’s safe to state that at the moment even efforts like this might only realistically bring about 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 apt to be more than micro-payments for the casual gamer. And maybe this is a positive thing, because surely if you get paid for something it stops being truly a game any more?