Recently, Brian Armstrong (CEO of Coinbase) shared his hypothesis that digital currency will be widely used in virtual reality, especially in virtual worlds.
“The reason is simple,” says Armstrong. “When people transact in virtual worlds, it doesn't make sense to use the currency of one country. People from all over the world will gather in these virtual spaces and it would be strange (or perhaps even rude) to use the currency of one country in the digital world.
In addition, digital currency will create an incentive for people to spend more time in these worlds (where they can make 'real money'), creating a virtuous cycle for companies building these worlds. ”
What is a virtual world?
Virtual worlds are things like Second Life... Or, if you've read books like Ready Player One or Cryptonomicon, they describe a metaverse that people will spend a lot of time in the future.
Second Life's economy is still around $ 800 million per year. People can buy all kinds of things in virtual worlds such as real estate, vehicles, special abilities (teleportation), access to events or clubs, and entertainment (new levels, songs, experiences).
Pros and cons of using decentralized digital currency in the virtual world
The developers of these virtual worlds have several options:
- They could create a centralized digital currency (as Second Life did with Linden Dollar, which was pre-bitcoin).
- They can use an existing decentralized digital currency, such as Bitcoin or Ethereum.
- They can create their own token (for example, on Ethereum).
The main arguments for the developers of these virtual worlds to use digital currency are:
- allows participants in these worlds (especially content creators) to earn "real money";
- more people will spend time playing. They might even make a living in a virtual world that pays their rent in the real world. If this happens, you will see that people spend 8 to 12 hours a day.
Although digital currency makes sense in virtual worlds, it can also make sense in any application that has a market for digital products (or user-generated content).
Today it is a popular business model in games that helps app developers unleash the diversity and creativity of their community. Using digital currency to do this, it would allow a large number of people to actually make a living in virtual reality and convert their earnings into local currency.
Conclusion
Virtual reality and cryptocurrency seem to be made for each other; it is a purely digital version of money for a purely digital world.
By allowing buyers of virtual reality applications to truly own their objects and property (and not just a record in the database controlled by the creator of the application), we will overcome another gap with the “real world”.
Clients of these products can borrow the money they generate in virtual worlds and convert them into traditional money to pay their bills in real life.
This will help move virtual reality from a hobby or entertainment to a permanent job or lifestyle.
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