Amazon’s Amazon Coins are No Play Money – Exploring Virtual Currency

amazon coinsThe world of virtual currency is nothing new. However, Amazon.com just unveiled a new virtual currency. It will be coming in May and lots of people are excited about it…but not everyone.

I remember hearing about this phenomenon a few years ago. I laughed, I thought it was a media sensation, I pretty much forgot about it. The whole idea was just too ridiculous to take seriously. However, in the first three parts of Play Money by Julian Dibbell, he gives enough background, enough empirical data, and enough of an introduction to the real people who are making real money in MMORPG’s (Massive Multi Player Role Playing Games) to bring the idea from the realms of the ridiculous and into the realm of the real, albeit with a certain surreal quality to it all. Amazon, of course, is going one better and making it very very real.

Several things jumped out at me from these sections of Dibbell’s Book 1) The population of the virtual countries that serve as the backdrop for the games he describes is often in excess of the population of real countries, i.e. a game like Ultima Online has more real people in it’s virtual confines than a real country like Tonga has real people 2)The gross domestic product per capita is actually higher in a game like Ultima (in real world dollars produced) than it is per capita in a real world country like Russia and finally 3) That a worker in Mexico or other less industrialized nations can earn more real world money through playing an MMORPG than through labor or other forms of real world work, that is, by producing fake ingots of fake gold and selling them on a real dollar ebay, a worker can earn more real dollars than by digging ditches, picking fruit, cleaning rooms, or cleaning schools. Unbelievable, and yet this is the reality that we are living in.

Another aspect of this phenomenon that Dibbell blew my mind with is the idea of scarcity and value. Using real world economics and virtual world statistical data, Dibbell shows that given a choice between a garden of Eden ease or a dog eat dog world, people will choose the dog eat dog. His examples of online world’s where people could have anything they want for free that lie unpopulated while online worlds that incorporate real world values of scarcity fill up with more and more people shows that we value what we have to work for. It shows that we don’t want the garden of Eden. Adam and Eve probably left the garden willingly and have never really wanted to go back. Why would you want to simply pick the fruit you want to eat when instead you can find the seed, dig a hole, water the dirt, tend the tree, protect it from predators, and finally, pick the fruit you want?

One has to wonder if perhaps the string of necessary steps in the real world is artificially lengthened in order to make our lives feel more satisfying. Do we all go through massive numbers of extra steps to achieve a sense of purpose? For instance, if we want a new car, is it really necessary to get a degree, get a job, pay off loans, build credit, get another loan, test drive, set up a payment plan, get insurance, and finally drive it off the lot? Or have we simply created all of these steps to keep us occupied, locked up in our own little virtual world of mining fake ore to make fake ingots to buy fake armor, to get to the next artificial level? It’s only one example, but it is definitely worth thinking about on a greater scale. Is Eden still all around us but we choose not to see it?

Jumping ahead to parts 7 and 8 of Play Money Dibbell cranks up the intensity meter as he gets serious about meeting his financial goals in the virtual world and doing it by any means possible. At the beginning of part 7 he is feeling confidant and has even started to make more money in an easier fashion. He takes this mental break to delve into the realities of real world taxes from real world money for virtual world income. He doesn’t find answers yet, but explains the totally bizarre concepts that he is thinking of in regard to his new vocation and the tax consequences thereof.

In the meantime, he is facing ethical dilemmas as he considers whether to make a profit from a virtually stolen ‘bone crusher’. He is ultimately, okay with fencing the item, mainly because it is within the rules of the game. Also, Dibbell is taking huge strides in the virtual world’s and even acquires the tower he described in the beginning of the text! None the less, Dibbell is becoming desperate to meet his self imposed goals and does the math to see how far he has to go…it is not looking like he will make it. His desperation leads him to start dealing in manufactured gold from notorious gold farmers. His profits go up…a lot.

He gets ripped off finally and finds that the authorities don’t take this sort of thing very seriously. Sometimes, this has bad consequences….as he points out that it has led to murder in China. Meanwhile he continues to try to figure out what exactly it is that he is selling. He goes to San Francisco and starts meeting the bigwigs of the virtual gaming world. Dibbell seems to be undergoing an identity crisis as his life is falling apart, his life in the virtual world is becoming more important than his life in the non virtual. Finally, he sets up a Chinese virtual sweatshop and hopes for huge profits.

In these sections, we see Dibbell slowly compromise the values he thought he had and justify his decisions. At the same time, we see him exploring the ramifications of virtual actions within the real world. Violence, death, fraud, and taxes. Sounds like the two worlds aren’t that different after all.

Let’s see if Amazon Coins can make a bigger difference between the real and the virtual world than Dibbels experiments did.