Virtual Currency Games

Every little boy’s (and many grown men’s) dream of making a living 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 instead of 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 already been slowly gaining in maturity both with regards to their functionality and the financial infrastructure that enables them to be used as a credible option to non-virtual fiat currency. Though Bitcoin, the very first and most popular of the crypto-currencies was created in 2009 2009 2009 there were 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 gold 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 as a result of the game mechanics which ensured that there is 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 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 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 have been unwilling or unable to devote the hours to level-up their own characters. Using 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 between 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 exemplory case of a virtual economy to date whereby it’s virtual currency, the Linden Dollar which 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 a particularly lucrative commodity to trade, in 2006 Ailin Graef became the 1st 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 will be the exception to the rule however, just a recorded 233 users making a lot more than $5000 in 2009 2009 from Second Lifestyle.

How 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 ball player having to go through non-authorised channels to switch their virtual booty or they having to possess a degree of real world creative skill or business acumen that could be traded for cash. This may 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 had is to ‘gamify’ what is usually the rather technical and automated procedure for creating digital currency. Unlike real world currencies which come into existence if they are printed by way of a Central bank, digital currencies are manufactured when you are ‘mined’ by users. The underlying source code of a specific digital currency that allows it to function is named 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 for the reason 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 this does not happen the blockchain is ‘policed’ by volunteers or ‘miners’ who test the validity of each transaction that is made whereby with the aid of specialist hardware and software they ensure that data is not tampered with. This is an automatic process for miner’s software albeit an extremely time consuming one which involves lots of 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 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 into a mining ‘pool’, using the joint processing power of their computers to mine coins more quickly.

HunterCoin the game sits within this type of blockchain for an electronic currency also called HunterCoin. The act of playing the overall game replaces the automated process of 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 searching for coins and on finding some and returning safely with 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 designed to make and receive digital payments. 10% of the worthiness of any coins deposited by players visit 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 the game graphics are basic and significant rewards remember to accumulate HunterCoin is an experiment that might be viewed as the first gaming 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 purpose of building their very own galactic empire. Players will undoubtedly 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 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 really 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 can be 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 as a result of how player’s reactions to an unintended plague mirrored recorded hard-to-model aspects of human behaviour to real world 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 based 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 that 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 now 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 1 1.005 HunterCoin (HUC) for joining HunterCoin the 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. 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 equate to… $0.01 USD. Plateforme de trading is not to say that as a new player becomes more adept they cannot grow their team of virtual CoinHunters and maybe hire a few ‘bot’ programmes that would automatically play the game beneath the guise of another player and earn coins for them aswell but I think it’s safe to say that at the moment even efforts like this might only realistically result in enough change for an everyday 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 really is improbable that rewards are ever likely to be a lot 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?