Perhaps the only thing that’s stopping the virtual reality of games and applications is that users can’t make a living out of them – at least not yet. But, with the rising notoriety of cryptocurrency, it’s becoming more conceivable to have a world where people can cash in on the profit they make in virtual worlds and role-playing games (RPGs).
Cryptocurrencies are gaining popularity because of their potential to create an entire economy in the virtual world by making it possible for goods, items, and services to be exchanged in the virtual realm using a medium of exchange which is legitimate and verifiable. Some of the most popular cryptocurrencies as of the present are Bitcoin (BTC), Ethereum (ETH), and ripple (XRP), among others.
Cashing In On Virtual Reality
There are several ways by which cryptocurrency intersects with virtual reality. If you want to learn more about the ways cryptocurrency is being applied and integrated to virtual reality, read on below:
- Giving Unique Identity
The first thing about cryptocurrency which could play an encompassing function in virtual reality is that cryptocurrency is built on giving a unique identity to a digital item. Cryptocurrency is an application of blockchain technology. The basic idea behind blockchain technology is to establish the traceability of a digital thing by encrypting it with a unique identity.
The concept of a unique set of attributes which becomes the encrypted identity of cryptocurrency is also needed in virtual reality. Everything you see in a virtual world are just elements and building blocks. But, there’s no way of saying who owns the items you took in a game you’re playing, except to say that the entire game is owned by the developer as proprietary application.
- Saying Who Owns Them
After giving a unique identity to digital things and items, the next logical way for cryptocurrency technology to intersect with virtual reality is to say who owns these items. When digital items or things have unique attributes or identities, then users can say who owns each specific digital item or thing. For instance, people can now say who owns such and such weapon in a game. The owner of the weapon can now sell it to another gamer or player.
When things in the virtual world can have owners, then people can start trading, exchanging, bartering, or selling them. This is where the direct application of cryptocurrency then intersects and combines with virtual reality.
- Medium Of Exchange
In the same way that fiat currency or paper money is the medium of exchange in the brick-and-mortar world, cryptocurrency can become the medium of exchange in virtual reality.
Some of the first-generation virtual reality games had their own versions of game currency. But, the thing with those kinds of currency is that they couldn’t be traced because each coin or dollar didn’t have a unique identity to set it apart from all the other coins or bills.
With the introduction of cryptocurrency in virtual reality, users and gamers can now use money which has real value because they’re encrypted with a unique identity. The equivalent of this in papers bills is the unique serial number on the face of those dollar notes.
- Link To Cash In
Another way that cryptocurrency intersects with virtual reality is that cryptocurrency is the intermediary currency or link of the virtual world to cash in on the financial instruments in the virtual realm and convert them into fiat currency. Once converted, users and gamers in the virtual world can now use their financial assets to purchase things and items in the real world.
This conversion mechanism wasn’t possible in the first-generation virtual reality games and applications. The game currency used in those early virtual world applications only served as medium of exchange in their own respective virtual realms. But, there was no way of converting them into real world cash or, at least, of converting them into bank deposits which can then be withdrawn from banks or ATMs.
By solving the problem of verifiability, and giving unique identities to each coin or currency in the virtual world, cryptocurrency was able to acquire the status of a legitimate and verifiable medium of exchange and virtual currency. This is one of the most important prerequisites for a currency to have value. There should be a way of verifying that each unit is unique for it to have some value. Otherwise, coders can just mass produce digital things and pose them as currency.
Reality Of Virtual Economy
Once the elements, items, and things in virtual reality are given unique identities, users, gamers, and players can then say who owns which items. It’s much the same in the real world. If ownership can be protected, people can start selling what they own. This point of intersection between cryptocurrency and virtual reality is when people pay for virtual items in a virtual economy.
Caroline is doing her graduation in IT from the University of South California but keens to work as a freelance blogger. She loves to write on the latest information about IoT, technology, and business. She has innovative ideas and shares her experience with her readers.