Virtual Currency Games

Every little boy’s (and many grown men’s) dream of making a living by playing video games is edging closer 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) agent…

Digital currencies have been slowly gaining in maturity both with regards to their functionality and the financial infrastructure that enables them to be used as a credible alternative to non-virtual fiat currency. Though Bitcoin, the 1st and most popular 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 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 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 due to the game mechanics which ensured that there is a never ending supply of monsters to kill and therefore 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 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 and 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 in love with eBay to Western gamers who were unwilling or unable to put in the hours to level-up their very own characters. Using 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 a specialist in virtual currencies estimated that in 2002 EverQuest was the 77th richest country in the world, somewhere within 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 up to now whereby it’s virtual currency, the Linden Dollar and this can be used to get or sell in-game goods and services could 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 become a marketplace where players and businesses alike were able to design, promote and sell content that 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 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 for example Ailin are the exception to the rule however, just a recorded 233 users making 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 games has been of secondary design, the ball player having to go through non-authorised channels to switch 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 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 had 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 manufactured 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 nothing more than intangible data it really 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 has been made for personal gain. To make sure Bitcoin Revolution Official 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 an automatic process for miner’s software albeit an extremely time consuming the one that involves many 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 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 groups of users combine their resources right into a mining ‘pool’, utilizing the joint processing power of these computers to mine coins quicker.

HunterCoin the overall 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 process of 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 go 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 are able to cash out their coins by depositing them to their own digital wallet, typically an app designed to make and receive digital payments. 10% of the value 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 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 for example 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 marketing 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 might be traded for both digital and real fiat currencies on exchanges like Poloniex.

The future of video games?

Though it is early days with regards to quality the release of HunterCoin and VoidSpace is an interesting indication of what may 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 may be surmised that eventually in-game virtual economies could be used as models to check economic theories and develop responses to massive failures predicated 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 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 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 cannot be exchanged right to USD, one must convert it into a competent digital currency like Bitcoin. At the time of 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 account would equate to… $0.01 USD. This is simply not to say that as a new player becomes more adept that they cannot grow their team of virtual CoinHunters and perhaps 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 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 is improbable that rewards are ever apt to be a lot more than micro-payments for the casual gamer. And maybe this is a good thing, because surely if you receives a commission for something it stops being a game any more?