The Merging of Digital Assets and Virtual Economies

At the age of 7 years my son understands the word Bitcoin and what it is. He will grow up with video platforms such as YouTube where 5 billion videos are being watched everyday and play online games alongside hundreds of millions of other people around the world. These spheres of influence have changed the paradigm of learning on a scale that millennials like myself will struggle to comprehend despite the fact that we felt the changing impact of the Internet. Ask a child what gamers he knows and he can probably recite more names than we could with football players.

One such gaming platform that most people are aware of is Fortnite, a free-to-play computer game developed by Epic Games that has succeeded in acquiring 200 million registered players (and increasing). A large percentage of these players are under the age of 16, which is no bad thing for adoption. Credit cards and debit cards around the world belonging to unaware parents have been utilized to purchase an in-game currency called V-Bucks, short for Vindertech Bucks or Vinderbucks. This in-game currency can be obtained by completing quests and missions but you can also accelerate this accumulation process and purchase V-Bucks with US Dollars or “regular” money.

The low-end and high-end pricing levels for buying V-Bucks in USD are 1,000 V-Bucks for $9.99 all the way to 10,000 (+3,500 Bonus) V-Bucks for $99.99.

After V-Bucks have been acquired they can be used for in-app purchases. Such purchases include cosmetic improvements with gaming avatars called “skins” and various items including battle passes or level upgrades.

There are many different types of virtual economies, with various in-game currencies driving online games and virtual worlds with millions of users. The Fortnite store now accepts Monero, a privacy-driven Cryptocurrency but this is only the beginning of something a lot bigger in regards to mass adoption of Digital Currency.

Another example of this is a popular basketball game on Xbox called NBA2K18. In this game there is a virtual currency simply called “VC”. NBA2K18 has sold over 10 million copies. Although not free to play like Fortnite (which is another article in itself as the gaming industry is shifting) people still purchase this currency for content and customizable objects. Playing the game can accumulate this currency but as above, this process can also be accelerated with US Dollars.

The low-end and high-end pricing levels for buying VC in NBA2K18 are 5,000 VC for $1.99 all the way to 450,000 VC (pay for 250,000 get 200,000 free) for $99.99.

As Digital Currency (or Cryptocurrency) becomes more widely accessible alongside the rise of virtual economies, these two worlds will inevitably start to merge. A tectonic shift will occur with a new generation of youth that will begin to transfer and exchange digital items with one another. Children and teenagers will be trading digital value, freely across borders and eventually, across games and gaming platforms. Add Artificial Intelligence into this equation with AI-AI marketplaces then it gets extremely interesting.

This may raise alarm bells regarding taxation and regulation. It should, and hopefully it will make us rethink our current financial rules and frameworks that have stagnated for so many years. The time taken for authorities to act reactively and create these compliant frameworks will not be able to keep up with the rate of adoption and development of technology. How we handle betting and the spending of money for young persons will be a topical issue. Sharing loans, streaming money, having multiple forms of remote employment, all these changes will become commonplace in probably less than a decade for a large percentage of young society.

When the children start trading Bitcoin or another affiliated form of digital value amongst themselves, for entertainment purposes or not, more of us should be aware and consider the upcoming impact of this by discussing it and not dismissing it through lack of understanding. A lot of time is being spent on keeping the proverbial “worms in the can” regarding digital currency and regulation. When virtual worlds collide with this new emerging technology this could create an interconnected and more accessible economy for people of all ages. The youth are now growing up with what is coming and most of us are just trying to keep pace.

In-game currency is just one of many examples relating to the adoption of digital currency but the key here is to look at what else is happening today, the bigger picture and how we will regulate. The Cryptocurrency industry is desperately scrambling to find the next application that will spark mainstream adoption but many of the applications are evolving right in front of us today.