Virtual currency
Encyclopedia
Virtual currency is used to purchase virtual goods within a variety of online communities; which include social networking websites, virtual worlds and online gaming
sites.
A key revenue driver within social media
, virtual currencies are specific within each game and are used to purchase in-game goods. Characters or avatar
s in virtual worlds own things within the context of the virtual world and users will collect each games' virtual currency to purchase land, supplies and various items used to enhance their status and add points. Some virtual currencies are time-based
, relying upon measurement of in-game achievements in order to accrue exchangeable points.
The word virtual currency or cyber currency is also often used, in a more broad sense, to indicate electronic money, that is not contractually backed by tangible assets nor by legal tender laws, and which is not a tangible commodity itself. Examples are peer-to-peer
crypto-currencies like bitcoin
and the above mentioned in-game currencies that are backed by virtual goods.
and Europe
for years. In the past, the United States
had only devout gamers spending money on virtual goods; driven by the popularity of widely appealing games for social networks such as Facebook
and MySpace
, this is rapidly changing. Zynga
reported that direct purchases of virtual currency and goods accounted for most of its more than $100 million in revenue for 2009.
, 18 million active users manage their own café, while 62 million users cultivate a farm and purchase game dollars towards additions to their farm in Zynga
’s FarmVille
.
Virtual currency systems such as Hub Culture
's Ven
are used beyond gaming to enable trade and purchase of real world items, inventory and knowledge. Ven is the first virtual currency to have been used in commodity and carbon credit trades. In others, such as Empire Avenue
, the virtual currency can only be used to invest in other registered members or purchase in-game ads and services while allowing the purchase of virtual currency via PayPal US dollars.
For users who pay US dollars in exchange for virtual dollars, sites will offer PayPal
or a similar credit card payment option, or through virtual currency platforms such as: SponsorPay, Offerpal, Peanut Labs, Sometrics, Bizmey and more.
, OpenSim
– is figuring out how the commerce system works, see Opensim Payments 101.
Online game
An online game is a game played over some form of computer network. This almost always means the Internet or equivalent technology, but games have always used whatever technology was current: modems before the Internet, and hard wired terminals before modems...
sites.
A key revenue driver within social media
Social media
The term Social Media refers to the use of web-based and mobile technologies to turn communication into an interactive dialogue. Andreas Kaplan and Michael Haenlein define social media as "a group of Internet-based applications that build on the ideological and technological foundations of Web 2.0,...
, virtual currencies are specific within each game and are used to purchase in-game goods. Characters or avatar
Avatar (computing)
In computing, an avatar is the graphical representation of the user or the user's alter ego or character. It may take either a three-dimensional form, as in games or virtual worlds, or a two-dimensional form as an icon in Internet forums and other online communities. It can also refer to a text...
s in virtual worlds own things within the context of the virtual world and users will collect each games' virtual currency to purchase land, supplies and various items used to enhance their status and add points. Some virtual currencies are time-based
Time-based currency
In economics, a time-based currency is an alternative currency where the unit of exchange is the man-hour.Some time-based currencies value everyone’s contributions equally. One hour equals one service credit...
, relying upon measurement of in-game achievements in order to accrue exchangeable points.
The word virtual currency or cyber currency is also often used, in a more broad sense, to indicate electronic money, that is not contractually backed by tangible assets nor by legal tender laws, and which is not a tangible commodity itself. Examples are peer-to-peer
Peer-to-peer
Peer-to-peer computing or networking is a distributed application architecture that partitions tasks or workloads among peers. Peers are equally privileged, equipotent participants in the application...
crypto-currencies like bitcoin
Bitcoin
Bitcoin is a decentralized, peer-to-peer network over which users make transactions that are tracked and verified through this network. The word Bitcoin also refers to the digital currency implemented as the currency medium for user transactions over this network...
and the above mentioned in-game currencies that are backed by virtual goods.
Business
Virtual goods have been in popular demand, driving revenue in AsiaAsia
Asia is the world's largest and most populous continent, located primarily in the eastern and northern hemispheres. It covers 8.7% of the Earth's total surface area and with approximately 3.879 billion people, it hosts 60% of the world's current human population...
and Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...
for years. In the past, the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
had only devout gamers spending money on virtual goods; driven by the popularity of widely appealing games for social networks such as Facebook
Facebook
Facebook is a social networking service and website launched in February 2004, operated and privately owned by Facebook, Inc. , Facebook has more than 800 million active users. Users must register before using the site, after which they may create a personal profile, add other users as...
and MySpace
MySpace
Myspace is a social networking service owned by Specific Media LLC and pop star Justin Timberlake. Myspace launched in August 2003 and is headquartered in Beverly Hills, California. In August 2011, Myspace had 33.1 million unique U.S. visitors....
, this is rapidly changing. Zynga
Zynga
Zynga is a social network game developer located in San Francisco, United States. The company develops browser-based games that work both stand-alone and as application widgets on social networking websites such as Facebook and MySpace....
reported that direct purchases of virtual currency and goods accounted for most of its more than $100 million in revenue for 2009.
Gamer currency
Players of some massively multiplayer online games (MMOGs) spend real money on virtual currency to purchase swords, houses and magic wands for their in-game avatars. In Restaurant City, a game by PlayfishPlayfish
Playfish, currently a property of Electronic Arts, is a developer of free-to-play social network games. Playfish was founded in 2007 by Kristian Segerstråle, Sebastien de Halleux, Sami Lababidi and Shukri Shammas. In October 2008, they secured USD$17 million in venture capital funding from Accel...
, 18 million active users manage their own café, while 62 million users cultivate a farm and purchase game dollars towards additions to their farm in Zynga
Zynga
Zynga is a social network game developer located in San Francisco, United States. The company develops browser-based games that work both stand-alone and as application widgets on social networking websites such as Facebook and MySpace....
’s FarmVille
FarmVille
FarmVille is a farming simulation social network game developed by Zynga in 2009. It is similar to Happy Farm, Farm Town,, and older games such as the Harvest Moon series...
.
Virtual currency systems such as Hub Culture
Hub Culture
Hub Culture is a social network service that operates the global digital currency Ven, and according to its website, is "the first to merge online and physical world environments." It was founded in November 2002. The Hub Culture group of companies is privately held with offices in Bermuda, Geneva,...
's Ven
Ven (currency)
Ven is a global virtual currency used by members of a social network service Hub Culture to buy, share and trade knowledge, goods and services globally. It can be spent at any Hub Culture Pavilion or used for micropayments on the Internet at large. The value of Ven is determined on the financial...
are used beyond gaming to enable trade and purchase of real world items, inventory and knowledge. Ven is the first virtual currency to have been used in commodity and carbon credit trades. In others, such as Empire Avenue
Empire Avenue
Empire Avenue is a stock market simulation social network game that allows users to buy and sell shares of people and websites. It started in February 2010 as an invitation-only closed beta before launching to the public in July 2010. Registration and game play is free.- Gameplay :Players have...
, the virtual currency can only be used to invest in other registered members or purchase in-game ads and services while allowing the purchase of virtual currency via PayPal US dollars.
For users who pay US dollars in exchange for virtual dollars, sites will offer PayPal
PayPal
PayPal is an American-based global e-commerce business allowing payments and money transfers to be made through the Internet. Online money transfers serve as electronic alternatives to paying with traditional paper methods, such as checks and money orders....
or a similar credit card payment option, or through virtual currency platforms such as: SponsorPay, Offerpal, Peanut Labs, Sometrics, Bizmey and more.
Virtual world currency
An often confusing part of using virtual worlds – e.g. Second LifeSecond Life
Second Life is an online virtual world developed by Linden Lab. It was launched on June 23, 2003. A number of free client programs, or Viewers, enable Second Life users, called Residents, to interact with each other through avatars...
, OpenSim
OpenSim
OpenSim may refer to one of several software packages/platforms:* simtk-opensim, biomechanics simulation software from NIH National Center for Biomedical Computation* OpenSimulator, an open source project to develop virtual worlds...
– is figuring out how the commerce system works, see Opensim Payments 101.
See also
- Electronic moneyElectronic moneyElectronic money is money or scrip that is only exchanged electronically. Typically, this involves the use of computer networks, the internet and digital stored value systems...
- Anonymous Internet bankingAnonymous internet bankingAnonymous Internet banking is the proposed use of strong financial cryptography to make electronic bank secrecy possible. The bank issues currency in the form of electronic tokens that can be converted on presentation to the bank to some other currency...
- Fictional currencyFictional currencyA fictional currency is some form of defined or alluded currency in works of fiction. The names of such units of currency are sometimes based on extant or historic currencies while others, such as "Kalganids" in Asimov's Foundation series, may be wholly invented...
- Internet currencyInternet currencyInternet currency was a form of electronic money for the Internet. Most sites offering Internet currency have either shut down or been acquired.-History:...
- BitcoinBitcoinBitcoin is a decentralized, peer-to-peer network over which users make transactions that are tracked and verified through this network. The word Bitcoin also refers to the digital currency implemented as the currency medium for user transactions over this network...