Coinbase co-founder: Blockchain will make gaming economies real

Posted: 19 October 2018 7:06 pm
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With automation-driven job loss looming, it's worth thinking about how to live in the digital world.

"I suspect blockchain-based digital assets will make virtual economies very real. People will be able to earn their entire living in virtual worlds in the next 10-15 years, changing the definition of "work" itself," suggested Coinbase co-founder Fred Ehrsam on Twitter, in response to a study noting the correlation between availability of cheap digital entertainment and workforce participation.

"In 2006 I sold my high end World of Warcraft account for $2,500. I spent 3,000 hours playing. That's $0.87 an hour," he added.

Real digital assets

Perhaps not coincidentally, many other prominent figures in the blockchain space such as Vitalik Buterin, were also deep into World of Warcraft shortly before getting into the emerging blockchain digital asset space.

Of course, approximately 100% (give or take) of all young males in a certain age bracket seem to have played that game at some point, so it could just be a coincidence.

But residents of South Korea, China and Japan were all disproportionately large and early investors in the cryptocurrency space, as well as being disproportionately keen on digital assets before then.

After having already spent heavily on apps, video game assets and other purely digital goods, many residents of these countries didn't need to spend the extra time getting their heads around the concepts of purely digital assets having real value, some have suggested.


Ehrsam also notes that many of the biggest and best games of the last few years got started as mods, drawing parallels between blockchain forks and community created game spin-offs.

"Games are built on modding culture," he says. "Counter Strike and Team Fortress were mods (aka forks) of Half Life. League of Legends copied DOTA which was a mod of Warcraft 3. Fortnite copied PUBG, a mod of DayZ: Battle Royale, which was a mod of ARMA2."

"Crypto supercharges gaming modding culture: the lifeblood of the gaming industry since 1998."

"Why? The building blocks are more likely to be open and thus stackable. Want to create the biggest game out there? Create the most attractive one to extend! Perhaps the best future business model for future video games is creating a platform."

The point has a lot of merit. You only need to look as far as the list of games above, which includes some of the biggest hits of the last decade.

A real economy

"The trajectory is clear: more people are playing games, their economies are getting bigger, the closed economies of these games hurt both trust and extensibility and crypto will make these economies open," Ehrsam says.

juicy crypto words

This is the same mentality behind many of the more rapid developments in the cryptocurrency space. Ethereum, for example, is a community-driven enterprise.

And many other projects are specifically intended to facilitate community involvement in ongoing development, with entire incentive structures and digital economies being built around the goal of motivating people to build "mods," as it were.

If you look at the successes of specific games, this development mentality has a proven track record of overwhelming success. In that respect, cryptocurrency has already made modding-style development methodologies very real.

Gaming economies, meanwhile, have been very real for even longer. Ehrsam mentions that he did the equivalent of earning $0.87 an hour to play World of Warcraft, but professional gold farming in that game has been a thing for even longer.

By 2011 one of the most valuable things to do with prisoners in Chinese labour camps was to sit them in front of a computer and force them to farm World of Warcraft gold, rather than waste their time on physical goods. Just like bitcoin mining, it was a certain proof of work in exchange for valuable rewards that could only be generated with the requisite expenditures of energy.

As automation continues to threaten jobs, and as the digital world becomes an increasingly valuable place to be, it might be time we started asking ourselves if it's possible to make cryptocurrency mining simultaneously useful, value-generating and fun?

Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VET, XLM, BTC, ADA

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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