Virtual Currency Games

Every little boy’s (and many grown men’s) dream of earning money 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 rather than 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 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 popular of the crypto-currencies was made in 2009 2009 2009 there were forms of virtual currencies found in video games for a lot more than 15 years. 1997’s Ultima Online was the first notable attempt to incorporate 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 property. This was an early on incarnation of a virtual currency in 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 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 though it was prohibited by the game’s designer to also sell virtual what to one another on eBay. In Bitcoin Era Site 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 purpose of gaining experience points so as 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 devote the hours to level-up their own characters. In line with the calculated exchange rate of EverQuest’s currency as a result of the real world trading that took place 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 globe, somewhere within Russia and Bulgaria and its 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 example of a virtual economy up to now whereby it’s virtual currency, the Linden Dollar that can be used to get or sell in-game goods and services can be exchanged for real life 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 turn into 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 property to other players. Examples such as for example Ailin will be the exception to the rule however, just 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 ability to generate non-virtual cash in video games 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 life creative skill or business acumen that could be traded for cash. This could be set to improve 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 usually the rather technical and automated process of creating digital currency. Unlike real life currencies which come into existence if they are printed by way of a Central bank, digital currencies are created when you are ‘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 only 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 ensure this will 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 ensure that data is not tampered with. This is a computerized process for miner’s software albeit an exceptionally time consuming the one that involves many 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 being an incentive to keep maintaining the network, thus is digital currency created. Because it can take anything from several days to years for an individual to successfully mine a coin sets of users combine their resources into a mining ‘pool’, utilizing the joint processing power of their computers to mine coins more quickly.

HunterCoin the overall game sits within such a blockchain for a digital currency also known as HunterCoin. The act of playing the game replaces the automated procedure for mining digital currency and for the first time makes it 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 with their base (other teams are out there trying to stop them and steal their coins) they are able to 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 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 is 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 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 more established form of digital currency which is currently used widely for micro-payments on various social media marketing sites. DogeCoin will 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 can be traded for both digital and real fiat currencies on exchanges like Poloniex.

The future of video games?

Though it is early days when it comes 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 as a result 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 test economic theories and develop responses to massive failures predicated on observations of how players use digital currency with real value. It is also a good 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 will have the methods to translate hours in front of 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 overall game in 1 day’s play. Currently HUC cannot 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 account 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 perhaps employ 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 state that at the moment even efforts such as 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 game such as CoinHunter that is 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 good thing, because surely if you get paid for something it stops being a game any more?