Today, we would like to introduce a guest blogger, Izzy Woods. Izzy is a freelance finance journo and FOREX trader. Her day job involves current accounts and foreign exchanges. Her real passion however, is virtual currencies and in-game wheeler-dealing. We see virtual currency as an important part of gamification. Understanding how virtual currency has evolved and changed since its creation, is vital to understanding how it can be used successfully in gamification implementations.
The most exciting currencies in the world aren’t the kind of currencies you’d recognize. You can’t even hold them in your hand – they’re virtual, existing intangibly on gaming networks and the hard drives of fiscal pioneers.
Project Entropia Dollar (PED)
In online gaming world, Entropia Universe, the PED is used by more than a million gamers to buy and sell items on planet Calypso. PEDs are obtained by making deposits of real currency, such as US dollars or Swedish kronor. Thanks to a license granted by the Swedish government, a new bank is being created that will allow people to link their real-life current accounts to their online accounts. Soon, users will even be able to take out PED loans.
Bitcoin (BTC)
Billed as the world’s ‘first decentralised digital currency’, Bitcoin was created in 2009 and is unusual in that it does not have a central clearing house operated by a single company or organisation. Instead, it is underwritten by a torrent-like peer-to-peer network. Bitcoin can be used to purchase things in both the real and virtual worlds. Users can store Bitcoin by creating a digital wallet on their computer, or by signing up to an online wallet service. There are currently more than seven million BTCs in circulation online, which is equivalent to more than £41m US dollars.
Linden Dollars (L$)
Linden dollars are the currency used by residents of the Second Life virtual world to buy and sell things in a free market. To earn a stash of Linden dollars, Second Lifers need to find customers who are happy to pay for the products or services that they can supply.
L$ can be exchanged for real-world currencies using market-based currency exchanges. The total size of the Second Life economy grew by 65 percent in 2009, reaching an impressive $567m US dollars. It now accounts for about a quarter of the entire US virtual goods market.
World of Warcraft Gold
When Blizzard Entertainment released World of Warcraft (WoW) in 2004, few could have predicted its rocketing popularity. It has more than 11 million subscribers, and its currency has become the stuff of mass media debate and government legislation. Hundreds of sites sell WoW gold and real-money commerce in this virtual market is now a multi-billion dollar industry.
FarmVille Cash
FarmVille – which sees users harvesting crops, managing livestock and ploughing land – is owned by Zynga, a hugely successful business with $600m US dollars in revenue in 2010. Players of FarmVille earn or buy Farm Cash to help boost their farm’s performance and progress more rapidly. For those who don’t have the time or energy to virtually earn credits, Farm Cash can be bought via PayPal, credit card or by using third-party payment tools.