Monetising Game Play on Social Network Sites
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This document discusses the monetization of gameplay on social networks and the rise of virtual currencies, particularly Bitcoin. It provides an overview of social gaming revenue models and payment options. Bitcoin is highlighted as a new entrant that could function as a true virtual currency due to its decentralized and peer-to-peer capabilities. The document outlines Bitcoin's features and evolution over time. It argues that Bitcoin is well-suited for online gaming and casinos. Several e-gaming sites currently accepting Bitcoin are listed, along with maps of Bitcoin nodes and the Bitcoin exchange rate trend. The implications of cryptocurrencies disrupting traditional banking and implications for Gibraltar's jurisdiction are discussed.
Monetising Game Play on Social Network Sites
- 1. Monetising Game Play on Social Network SitesJon Matonis31 March 2011
- 2. OverviewChief Forex Dealer at VISA InternationalDirector of Financial Services Vertical for VeriSign, Inc.CEO of Hush Communications, creator of encrypted Hushmail.comEditor of The Monetary Future blog on digital currencies
- 3. Social Gaming and Virtual Currency
- 4. Revenue Shift Away from Advertising
- 5. Virtual Goods Revenue Increasing
- 6. The Entrance of Facebook Credits
- 7. Social Gaming Beyond Facebook
- 8. Types of Payment Choices for eGamingCredit card/debit cardEFT wire transfer/eCheck/ACHCashier’s check/money orderWestern Union/MoneyGramProxy eWallet account (Click2Pay, Moneybookers, MyPaylinQ, Neteller, Ukash, Webmoney, etc.)Mobile paymentNon-political virtual currency unit (Facebook Credits, Linden Dollars)
- 9. Attributes of a True Virtual CurrencyP2P capableAnonymous/pseudonymousTwo-way convertibilityTransactional non-repudiationEasily divisiblePortable and offline capableSecurity and scarcityFrictionless (no transaction fees)Nearly instant deposits/withdrawals
- 10. Previous Barriers to a True Virtual CurrencyGold bullion cannot be molecularly transported across the InternetEmulating the anonymity features of physical cash or gaming chips is difficultDigital bearer certificates have to verify against a centralised ‘mint’ which creates a single point of failureDecentralisation opens up the possibility for double spending the digital ‘coins’
- 11. Bitcoin: A New Entrant
- 12. What is Bitcoin?One of the first implementations of a concept called cryptocurrency (circa, 1998)Does not rely on trusting any central issuerRelies on the transfer of amounts between accounts using public key cryptography (like PGP for money)Scarcity based on a reusable proof-of-workDouble-spending prevented by a distributed time server implementing chained RPOWs
- 13. Major Features of BitcoinCurrent size of economy (~BTC 6,000,000)Nodes connected (5,000-10,000)Trading turnover (equivalent $30,000/day)Decentralised confirmationsDistributed nodes (peer-to-peer)Open source software (peer reviewed)Non-political unit of accountIndependent market-based exchange rate
- 14. Evolution of Bitcoin31/10/08 Bitcoin academic paper published11/01/09 Bitcoin v0.1 released17/07/10 MtGox exchange established06/11/10 Bitcoin economy passes $1.0m09/12/10 Generation difficulty passes 10,00028/01/11 Block 105000 generated, 5.25m/21m11/02/11 Bitcoin reaches USD parity, $1/BTC03/03/11 Bitcoin v0.3.20.2 released27/03/11 First BTC:GBP exchange opens
- 15. Benefits of BitcoinBitcoin is ideally suited to the eGaming and online casino financial requirementsMonetary properties and features emulate the physical gaming chips in a real-world casinoFeatures correlate to the customer demand for a digital/virtual currency
- 16. eGaming Sites Currently Using Bitcoin
- 17. Map of Bitcoin Nodes
- 18. Total Bitcoins Issued Over Time
- 19. Bitcoin-USD Exchange Rate (Jul 2010 – Mar 2011)
- 21. Google is the Player to WatchGoogle acquires Social Gold, a virtual currency platform (August 2010)Google acquires Zetawire to look after NFC payments (December 2010)Google releases BitcoinJ, a bitcoin client for Java (March 2011)Google now has 750 staff in payments division!
- 22. The Dawn of the Cryptocurrency Economy“Digital cash is to legal tender as BitTorrents are to copyrights.” -- J. Matonis
- 23. The Dawn of the Cryptocurrency EconomyA Digital Currency Revolution will......Fundamentally alter the current hierarchy of central banking and banksChallenge traditional value depositoriesCause KYC rules for certain transactions to become irrelevantMake monetary and taxation jurisdictions less important
- 24. Opportunities for Gibraltar JurisdictioneGaming companies that adaptPrepaid operators (Transact Networks, IDT, Wavecrest)eMoney and virtual currency exchangesCryptocurrency market-makers
- 25. Thank YouJon Matonismatonis@hushmail.com twitter.com/jonmatonis