The Complicated Economic Market of Virtual Currency
Tom Boellstorff is an anthropologist working at the University of California, Irvine. In 2008 he wrote a book called Coming of Age in Second Life: An Anthropologist Explores the Virtually Human. Second Life is a virtual online world where users create avatars and go about their lives however they want, irrespective of how they might be living in the real world. Avatars can chat, have sex with other avatars, and even get married within Second Life without ever interacting with the other person outside in real life. These relationships have very real emotional connotations. I was especially interested, however, in another real aspect of life within the virtual world-currency.
Boellstorff describes how users can buy items within Second Life using the world’s currency called “linden dollars.” Boellstorff purchased land within the world in order to build a house for his avatar. He writes “you paid a virtual real estate agent about thirty dollars for it, conducting the transaction in linden dollars or “lindens.” For the right to own land you paid Linden Lab, the company that owns Second Life, $9.95 a month for a “premium account.’” The linden dollars used in the world are a virtual currency, but they also have a direct value in real world currency. Boellstorff describes what happened when he purchased a shirt from one of the stores within the Second Life world. After buying the shirt, “Seventy lindens (about twenty-five cents during the period of my fieldwork) is deducted from your Second Life account and the shirt is moved into your inventory.” Boellstorff was in fact spending real money even though the transaction was being conducted in linden dollars.
He also pointed out that, importantly, linden dollars could also be converted back into U.S. dollars. Users could set up a shop and sell shirts like the one that Boellstorff bought. The best designers could make a large amount of money on Second Life. For instance, Boellstorff described a dress that an avatar was wearing as “made by a well-known designer who earns over three thousand U.S. dollars a month from her creations.” In using Second Life, money was crossing from the real into the virtual and back again.
Another community that has a similar relationship with money moving between the virtual and the real is World of Warcraft. World of Warcraft is a multiplayer online role-playing game where users create characters and engage in battle and various heroic adventures. World of Warcraft uses an in-game currency made up of gold and tokens. This currency can be used to purchase items within the world as well as game time. Gold can be purchased in the game, but there was also a thriving third party gold market. By introducing the tokens, the company that owns World of Warcraft, Blizzard, wanted to crack down on third party gold sellers. According to Blizzard, “The WoW Token feature is designed to facilitate the exchange of gold and game time between players in as secure, convenient, and fair a way as possible, and without making players feel like they’re playing a game with their hard-earned money.”
I observed a reddit thread devoted to the World of Warcraft economy. There users were discussing how the introduction of the token feature might affect the World of Warcraft market. The users came to the conclusion that the token feature was an effective move by Blizzard to hinder the gold black market. But this would also make it very difficult for users to “mine” gold-meaning that it would now be difficult to amass a large quantity of gold and then sell it to other users for U.S. dollars. Money would still be moving from the real to the virtual, but Blizzard was attempting to cut out the users trying to make real money back from their virtual currency.
