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Virtual Currency Games

Every little boy’s (and many grown men’s) dream of earning money by playing video gaming is edging closer 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 another 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 allows them to be utilized 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 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 casino 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 for the reason that it existed purely within the overall 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 was 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 even though it was prohibited by the game’s designer to also sell virtual items 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 and other such games full-time with the purpose of gaining experience points to be able to level-up their characters thereby making them more powerful and popular. 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. In line with 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 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 example of a virtual economy to date whereby it’s virtual currency, the Linden Dollar that can be used to buy 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 turn into a marketplace where players and businesses alike could actually 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 property to other players. Examples such as for example Ailin will be 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 opportunity to generate non-virtual cash in video games has been of secondary design, the ball player having to proceed 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 could be set to improve 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 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 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 in that you’ll be able 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 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 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 help keep maintaining the network, thus is digital currency created. Since it may 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 their computers to mine coins more quickly.

HunterCoin the game sits within this type of blockchain for a digital currency also known as HunterCoin. The act of playing the game replaces the automated process of mining digital currency and for the very first 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 with their base (other teams are on the market attempting 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 whenever a player is killed and their coins dropped. While bitcoin 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 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 asteroids and trading them for goods with other players with the goal of building their own galactic empire. Players will be rewarded for mining in DogeCoin, a far more established form 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 methods to make in-game purchases. Like HunterCoin, DogeCoin is a legitimate and fully functioning digital currency and like HunterCoin it could be traded for both digital and real fiat currencies on exchanges like Poloniex.

The future of video gaming?

Though it is start in terms of quality the release of HunterCoin and VoidSpace is an interesting indication of what could 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 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 check economic theories and develop responses to massive failures based 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 instance. In the mean time, players will have the means 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 overall game in 1 day’s play. Currently HUC can’t be exchanged directly to USD, one must convert it right into a more established digital currency like Bitcoin. At the time of 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 that they cannot 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 aswell but I believe it’s safe to say that right now even efforts such as this might only realistically result in 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 likely to be a lot 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?

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