In virtual reality, particularly in virtual worlds, virtual currencies will be widely adopted. There is a simple reason for this. Virtual world transactions don’t make sense when people use a single currency. A virtual community will gather people from all over the world, and using one country’s currency would seem exclusionary (or maybe even rude). Furthermore, the digital currency will create a virtuous cycle for companies creating these worlds by creating an incentive for people to spend more time in them (where they can earn “real money”).
Traditional money is based on faith and credit in some form of government. Taxes would be raised by such a government to pay off the debt. There is a belief among participants in a virtual currency market that it will be valuable over time.
Since Virtual Currency is still calculated in terms of traditional currencies, such as dollars and dinars, its value depends on the conversion process.
Historically, “pump-and-dump” schemes have been associated with price swings in a marketplace. When earlier or larger participants withdraw their virtual currency into sovereign currencies, manipulation of the exchange rate becomes rampant. Anonymity and thin trading slices make such schemes harder to detect in real-time.
A virtual currency marketplace’s opacity makes it possible for non-anonymous players to appear anonymous to everyone else, which is how money laundering is conducted. By synchronizing transactions, dirty money can be masked; it becomes valid.
Virtual currency possibilities in virtual reality
Virtual world developers have a few options.
- It is possible to create a centralized digital currency (like Second Life did with the Linden Dollar before Bitcoin).
- They could use Bitcoin or Ethereum, existing decentralized digital currencies.
- Tokens could be issued (e.g., on Ethereum).
These are the most important reasons for virtual world developers to adopt Virtual currencies. Content creators, in particular, are able to earn “real money” from these worlds. As a result, more people will play the game. In the virtual world, they may even make enough money to pay their rent in the real world. As a result, you would see people spending eight to twelve hours per day in the virtual world.
In addition to virtual worlds, digital currencies can also be used in apps that feature a digital goods market (or a user-generated content market). Game developers today are using this model to unleash a lot of diversity/creativity from their community. A digital currency would make it possible for many people to earn a living in Virtual Reality, and return their earnings to their local currencies as well.
When currency (and banks) become virtual, what will they look like?
Skeuomorphism might remind us of traditional financial practices when it comes to virtual worlds. Virtual bank buildings with pillars, spinning bank vaults, and virtual tellers wearing eyeglasses may soon become reality. Keeping your coins in your wallet might result in them piling up or jostling around when you move around.
It was great to see coins being collected in Ready Player One a Movie based on Future, and spilling out of characters after they were killed (leaving a heap of loot behind).
Conclusion
By enabling virtual reality app users to own their own items and wealth (as opposed to keeping them in a database that is controlled by the app’s creator) we will be able to bridge a further gap with “reality”. These products enable customers to convert the virtual currency they generate into traditional currency they can use to pay their bills in real life. Virtual reality will go from being a hobby or entertainment to a full-time career or lifestyle.
