As this is my first post, I feel I should warn you all that I am not a very interesting man.
So when Marty told us to come up with blogs about interesting topics we were familiar with…well lets just say I didn’t have the easiest of times coming up with anything in particular.
Thus, in a desperate attempt to come up with something to blog about, I decided to write about online culture, so if anyone has ever wondered what memes, trolls, e-sports and many other weird internet terms/phenomena are all about, you have come to the right place.
Now, with introductions out of the way, I figure I should probably get back to the main topic of this post, which if you hadn’t guessed by the absurd title of this pose, will be all about the absurd nature of virtual currencies.
Now, a virtual currency acts exactly like real life currency in that it is used as a means to buy and sell goods, however, unlike real life currencies which works pretty much anywhere, digital currencies only work within their own digital worlds and possess no real buying power outside of their virtual environments. Or at least, that’s how it used to work until the introduction of the internet and more specifically, online games, which sparked the beginning of a strange and controversial movement, wherein virtual currencies began to acquire real life dollar values.
Now, I realize this likely all sounds pretty lame or pointless so far, but unfortunately, much like real economics, virtual economics suffers from the curse of being ridiculously boring. However, many of the transactions themselves do prive to be significantly more interesting.
Take for example the case of Erik Novak (aka Buzz Erik Lightyear as he is known to his peers online). Mr. Novak was an avid and dedicated player of the MMORPG (massively multiplayer online role-playing game) Entropia Universe, and proud owner of Planet Calypso.
Now before I go any further, Entropia has taken a fairly unique approach to their virtual economy in that players can make real money transactions in order to by in game currency, also known as PED (Project Entropia Dollars), as well as withdraw PED for real life funds at a 10:1 ratio, meaning that everything in the game has a real-life dollar value.
So, with this information regarding Entropia’s economy in mind, we return to the case of Mr. Novak who won the planet Calypso in an online auction. Now normally, someone winning an auction in a video game garners little to no attention, as it is one of the most popular ways to make online transactions. However, Mr. Novak is a special case, in that he spent $330,000.00 USD to win the rights to the planet.
Yes, I do mean three-hundred and thirty thousand US dollars.
To most of you, I imagine this seems like an absurd amount of money for what really amounts to nothing more than some fancy pixels on the internet, and I would be inclined to agree with this sentiment. However, the case of Mr. Novak, though fairly extreme, is not as uncommon as you probably think.
While the practice of digital currency aquiring real-life value has generally been confined to the realm of more traditional online games, markets dealing in real and virtual currencies have also been rising in more social environments as well. Think, Neopets or Habo Hotel.
Slowly but surely, the practice of tying real life currency to digital currency is becoming more prevalent.
(I should probably mention here that unlike Entropia Universe, most games do not have a legitimate means to convert digital currency into real dollars, and thus spawn vast unregulated black market enterprises to facilitate these transactions)
In fact, the practice has become so big that many developers have given up trying to combat this issue and are instead pursuing different means of cashing in on it. Such is the case of Blizzard Entertainment, developers of the: Warcraft, Starcraft and Diablo franchises, who recently created a new currency called Blizzard Bucks, which will essentially act as a medium for players to exchange real money for in game currency in their newest release of Diablo.
So what does this all mean?
Well to most, probably nothing.
But to a growing segment of users, it means that they can potentially make a living playing virtual markets for real life dollars.
I can’t help but wonder, where exactly this movement will lead, and to what extent this emerging market may develop.
While it may seem ridiculous and borderline absurd, I can’t help but wonder if one day I’ll be able to go to the mall and instead of paying in dollars and cents, I could potentially pay in digital dabloons or gold pieces?