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 coinjoin.io 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) real estate 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 option to non-virtual fiat currency. Though Bitcoin, the 1st 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 initial notable attempt to incorporate 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 real estate. This was an early on incarnation of a virtual currency in that it existed purely within the overall game though it did mirror real life economics to the extent that the Ultima currency experienced inflation because of the overall 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 though it was prohibited by the game’s designer to also sell virtual items to each other 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 along with other such games full-time with the purpose of gaining experience points to be able to level-up their characters thereby making them better and popular. These characters would then be sold on eBay to Western gamers who have been unwilling or unable to put in the hours to level-up their very own characters. Using the calculated exchange rate of EverQuest’s currency because 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 earth, somewhere between Russia and Bulgaria and its own 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 is perhaps the most complete exemplory case of a virtual economy to date whereby it’s virtual currency, the Linden Dollar which can be used to buy or sell in-game goods and services can be exchanged for real life currencies via market-based exchanges. There have been a recorded $3.2 billion in-game transactions of virtual goods in the a decade 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 a particularly 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 Ailin will be the exception to the rule however, just a recorded 233 users making more than $5000 in ’09 2009 from Second Life activities.

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 proceed through non-authorised channels to exchange 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 gaming being built from the ground up round 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 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 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 is more prone to fraud than physical currency for the reason 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’s made whereby with the aid of 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 one which involves a great deal of 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 an individual to successfully mine a coin groups of users combine their resources into a mining ‘pool’, using the joint processing power of their computers to mine coins more quickly.

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 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 searching for coins and on finding some and returning safely to their base (other teams are out there attempting 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 take time to accumulate HunterCoin can be an experiment that might be seen as the first gaming 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 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 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 could be 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 is an interesting indication of what may be the next evolution for games. MMORPG’s are currently being considered as methods 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 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. 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 areas of personal digitial ownership for instance. 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 Bitcoin Evolution 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 game in 1 day’s play. Currently HUC cannot be exchanged directly to USD, one must convert it right 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 to USD, before any transaction fees were taken into account would mean… $0.01 USD. This is simply not to say that as a player becomes more adept they could not grow their team of virtual CoinHunters and perhaps hire a few ‘bot’ programmes that could automatically play the game under the guise of another player and earn coins for them aswell but I think it’s safe to state that at the moment even efforts like 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 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?