Every little boy’s (and many 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 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) real estate agent…
Digital currencies have already 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 1st and most well known of the crypto-currencies was created in 2009 2009 2009 there were forms of virtual currencies used in video games for a lot more than 15 years. 1997’s Ultima Online was the initial notable attempt to add 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 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 world economics to the extent that the Ultima currency experienced inflation as a result of the game mechanics which ensured that there was 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 even though it was prohibited by the game’s designer to also sell virtual items 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 to be able 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 devote the hours to level-up their own characters. In line with the calculated exchange rate of EverQuest’s currency because of the real world trading that occurred Edward Castronova, Professor of Telecommunications at Indiana University and a specialist 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 may be used to buy 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 could actually 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 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 a lot more than $5000 in 2009 2009 from Second Lifestyle.
How to be paid in dollars for mining asteroids…
To worldoftechnicalanalysis.com , the ability to generate non-virtual cash in video gaming has been of secondary design, the player having to proceed 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 may be set to change 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 process of creating digital currency. Unlike real life currencies that come into existence when 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 only intangible data it really is more susceptible 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 each transaction that’s 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 exceptionally time consuming the one that involves a great deal 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 as an incentive to help keep maintaining the network, thus is digital currency created. Because it can take anything from several days to years for a person to successfully mine a coin groups 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 overall game sits within such a 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 without the need for expensive hardware. Using strategy, time and teamwork, players venture 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 to their own digital wallet, typically an app made to make and receive digital payments. 10% of the value of any coins deposited by players go to the miners maintaining HunterCoin’s blockchain plus 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 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 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 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 marketing sites. DogeCoin will also be currency of in-game trade between players and the methods to make in-game purchases. Like HunterCoin, DogeCoin is really 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 start regarding quality the release of HunterCoin and VoidSpace can be an interesting indication of what may 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 test economic theories and develop responses to massive failures predicated 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 example. 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 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 right 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 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 equate to… $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 would automatically play the game beneath the guise of another player and earn coins for them as well but I believe it’s safe to say 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 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?