Virtual Currency

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  • New York wants Bitcoin exchanges to be heavily regulated

    Popularity just isn't easy. That's something cryptocurrencies, like Bitcoin, are starting to grasp. Yes, they're now being accepted as a formal method of payment by more and more places, but some government entities still can't figure out how to treat them properly, particularly in the US. Case in point: the state of New York, which is proposing that companies exchanging virtual currency with consumers go through a regulatory process. BitLicense, a plan that's been in the works for nearly a year, would require these cryptocurrency banks to verify the identity of customers and, in some cases, ask for more information from "high-risk customers, high-volume accounts, or accounts on which a suspicious activity report has been filed." But that's not necessarily a bad thing, not for everyone anyway. "These regulations include provisions to help safeguard customer assets, protect against cyber hacking, and prevent the abuse of virtual currencies for illegal activity, such as money laundering." Benjamin M. Lawsky, superintendent of New York's Department of Financial Services, stated in a press release about to the proposal.

    Edgar Alvarez
    07.18.2014
  • The TUAW Daily Update Podcast for June 3, 2014

    It's the TUAW Daily Update, your source for Apple news in a convenient audio format. You'll get some the top Apple stories of the day in three to five minutes for a quick review of what's happening in the Apple world. You can listen to today's Apple stories by clicking the player at the top of the page. The Daily Update has been moved to a new podcast host in the past few days. Current listeners should delete the old podcast subscription and subscribe to the new feed in the iTunes Store here.

    Steve Sande
    06.03.2014
  • The Bitcoin drama continues: another exchange shuts down, while Overstock reports over $1 million in Bitcoin sales

    It's been one big roller coaster ride for Bitcoin these past few weeks, with the Mt. Gox exchange shutting down and filing for bankruptcy following a large-scale hack, not to mention questions about the legality of the virtual currency. Just a week after Mt. Gox went dark, another exchange called Flexcoin is also shuttering, apparently due to hackers who robbed more than $600,000 in bitcoins. That amount pales in comparison to the $425 million stolen from Gox, but it points to ongoing security issues that fall outside of the Federal Reserve's regulation. In the midst of this bad news, online retailer Overstock announced that it's processed more than $1 million in purchases made with bitcoins. One of the first major companies to embrace the currency, the site has accepted Bitcoin since early January, and it reports that more than 4,000 -- mostly new -- customers have chosen this form of payment. Overstock CEO Patrick Byrne told The Wall Street Journal he expects purchases made with bitcoins to top $10 million this year, but the Mt. Gox (and, now, Flexcoin) hacking will likely have some customers and would-be Bitcoin users second-guessing the currency's safety. Bitcoin is a saga if there ever was one, so expect more news in the coming weeks.

    Sarah Silbert
    03.04.2014
  • Amazon announces Coins, a virtual currency coming to the Kindle Fire in May

    Jeff Bezos, whose fortune is probably built upon real money, has decided to invent a fake one for his customers. Amazon is launching a virtual currency, called Amazon Coins, which is designed to encourage Kindle Fire users to buy apps, games and in-app item purchases. When it launches in May, Amazon plans to give away tens of millions of dollars worth of free coins to consumers, just to get 'em hooked -- before pulling the old switcheroo and demanding users stump up their hard-earned in order to be able to buy things from Farmville.

    Daniel Cooper
    02.05.2013
  • Oregon Scientific MEEP! tablet ships for $150, gives kids a safe, exclamation-filled place to play

    For all the enthusiasm Oregon Scientific put into launching (and naming) its MEEP! tablet, the company has been a bit timid about getting the kid-friendly Android device into the market -- we're just seeing it go on sale eight months after it was first shown to the world. Now that the slate is here, it may be worth the patience from parents. The 1GHz ARM Cortex-A8 chip, 512MB of RAM, 800 x 480 screen and 4GB of storage won't have the adults regretting their Kindle Fire purchases, but the MEEP! does come in a smash-resistant form with remote parental control and an allowance-based store that lets kids 'buy' apps with virtual coins. Oregon helps its case through the use of Ice Cream Sandwich, preloaded games like Angry Birds and a raft of accessories for games and music. The $150 asking price is just low enough that we can see a few families starting their youngest technophiles on a MEEP! before graduating them to bigger, badder tablets with less punctuation in the name.

    Jon Fingas
    10.02.2012
  • MasterCard denies BitCoin card rumors, BitInstant says it's still on track

    Well, BitInstant is insistent that it will launch a BitCoin debit card, but MasterCard is claiming it will not be part of the plans. After a mock up of the plastic made the rounds featuring the company's logo, the financial powerhouse felt it necessary to reach out to us, clarifying its non-involvement. "MasterCard has no relationship with BitInstant. There are issuers who allow the conversion of Bitcoins to US dollars and other currencies, delivered on prepaid cards. However, we're not aware of this particular programme from BitInstant." Of course, if you read the transcript of Charlie Shrem's chat announcing the plans, he never actually names MasterCard. The logo was likely meant as a placeholder -- one that some outlets took a little too literally. Interestingly, this doesn't actually mean that MasterCard won't be involved... just that the company isn't at this point in the process. BitInstant released its own statement, just hours after the card house contacted us, saying that it has been working with MasterCard affiliates, but had yet to submit to the financial firm directly. "The card program is moving forward and the arrangement with MasterCard will be handled in due time at the proper stage of the process by the partners who work directly with that company." So, what have we learned today? Not a whole heck of a lot actually, other than the fact that putting out a debit card is a complicated business. You'll just have to stay tuned to see how this shakes out.

  • Free for All: EVE drama due to bolster waning TV soap schedule

    Much was said recently about the latest EVE Online "drama." If you've talked and written about MMORPGs as long as I have, you'd be very rich if you were paid a nickel every time you heard the word. Drama, when applied to the world of MMOs, ends up feeling like a funeral for an insect... more than a little dramatic. As someone who has played EVE a bit off and on (I have a six-year-old account, but only a 10,000,000-SP character), I was more than a little surprised at the response -- but not really surprised. In fact, the recent drama -- hell, any EVE drama -- comes off as rather humorous. The same thing happened when World of Warcraft began selling the infamous sparklepony or when Lord of the Rings Online decided to sell a special skeleton steed in its cash shop (I was lucky enough to get one during the holiday event). Players screamed that they would be canceling, that they would protest in some form or another, and that they would never buy a product from the developer, go anywhere near anyone who shared the same name as any of the developers, or even utter the name of their poor, lost avatars again. Yet, here we are. Every time something like this happens, it happens for a few distinct reasons. Click past the cut and I'll fill you in.

    Beau Hindman
    07.06.2011
  • Compromised account leads to massive Bitcoin sell off, EFF reconsiders use of currency

    Bitcoin, for those not aware, is a completely digital currency -- one where exchanges between individuals are largely anonymous and secured through cryptography, and one that has seen its hype-meter go off the charts in recent months. That, inevitably, has had some people waiting for a fall, and it took a big one this week. While things have since bounced back, the value of the currency on the so-called Mt. Gox exchange dropped from around $17.50 to just one cent in a matter of moments during the early hours of June 20th -- a drop that's since been attributed to a compromised account. Thanks to a daily withdrawal limit, however, that apparently only resulted in $1,000 actually being stolen, and a claims process has now been set up for those affected. While not directly related to the sell off, the Electronic Frontier Foundation (or EFF) also dealt a bit of a blow to the upstart currency this week, when it announced that it would no longer be accepting Bitcoin donations. According to the organization, that's both because it doesn't "fully understand the complex legal issues involved with creating a new currency system," and because it doesn't want its acceptance of Bitcoins misconstrued as an endorsement of Bitcoin. Head on past the break for an account of the aforementioned plunge as it happened. [Thanks, Zigmar; image: Wikipedia]

    Donald Melanson
    06.22.2011
  • The Lawbringer: China, forced labor, and why we must stop buying gold

    Pop law abounds in The Lawbringer, your weekly dose of WoW, the law, video games and the MMO genre. Running parallel to the games we love and enjoy is a world full of rules, regulations, pitfalls and traps. How about you hang out with us as we discuss some of the more esoteric aspects of the games we love to play? Gold selling is a multi-billion dollar industry that spans the globe, with a healthy portion of in-game currency sales originating from China. It's a cheap operation to start up -- all you need is cheap labor, some computers, a PayPal account, and a copy of World of Warcraft. The overhead is low and the payoff is big because the demand is present for the supply. People have a perceived need to buy gold, so more people sell gold, which allows the market to grow. It won't stop, either, as tradable virtual currency from all types of games hit the gray market. What happens when an industry with low overheads becomes too profitable? What happens when a relatively simple setup like gold farming goes from the quaintness of cottage industry to a virtual currency-fueled industrial revolution? People start getting ideas when money is sitting there on the table, ready and waiting to be snatched up by the stalwart businessman. Combine that sentiment with the corruption and profit motives of institutions and a labor force that is for all intents and purposes free, and you get the sad tale of prisoners in China and the people in charge.

    Mathew McCurley
    06.03.2011
  • FBI raids University of Michigan apartment over possible WoW fraud

    A University of Michigan student apartment became the focus of a recent investigation by the FBI, which conducted a raid on March 30th over "potentially fraudulent sales or purchases of virtual currency that people use to advance in the popular online role-playing game World of Warcraft." While the FBI did not make any arrests, it did confiscate several items, including computers, video game equipment, and credit cards. The Bureau is checking out whether one or both of the students were involved in a fraudulent scheme to buy or sell virtual gold, and the agency is looking for online transaction records with various online banks and websites. The two students who share the apartment claim that they do not play WoW and are confident that they are innocent. One of the unnamed students commented: "They thought we were involved in some kind of fraud. I'm pretty sure they have the wrong people, but they took all my stuff."

    Justin Olivetti
    04.14.2011
  • BBC suggests gold farming may bolster poorer economies

    Who says gold farmers are devilspawn and deserving of a fate worse than death? Well, a lot of MMO gamers say that, but a news blurb on the BBC's website suggests that some virtual currency farmers may have a higher purpose after all. Citing a report at InfoDev.org, the BBC posits that gold farmers are simply filling a role in the global supply and demand economy. "Western players who have limited time for gaming are buying game cash, gear and high level characters from people in China and Vietnam that are paid to play as a job," the article states. The BBC also notes that the most recent global virtual sales estimates put the total market worth in the neighborhood of $3 billion. Approximately 30% of that is generated by legit players, 50% comes from bot farms, and the remaining 20% is pilfered from compromised accounts. Whether or not you tremble in anger at the thought of MMO gold farming or dismiss it as a modern-day reality, it seems as if it's here to stay, and according to the BBC, it might even provide economic aid to poor nations. "The virtual economy can have a significant impact on local economies despite its modest size," according to the article.

    Jef Reahard
    04.08.2011
  • The Lawbringer: Hacking and valuing virtual currency

    Pop law abounds in The Lawbringer, your weekly dose of WoW, the law, video games and the MMO genre. Running parallel to the games we love and enjoy is a world full of rules, regulations, pitfalls and traps. How about you hang out with us as we discuss some of the more esoteric aspects of the games we love to play? I can't stop talking about virtual currency! As virtual worlds and economies penetrate every aspect of our lives, we are faced with the new and daunting challenge of identifying the seedy criminal element present in every human venture. There will always be someone breaking the rules, skimming off the top, or finding a way to steal their way up the ladder. Generally, as a society, we accept this as part of the process and make our rules accordingly to punish and dissuade against future criminals and all that jazz. This week, we read about a very interesting virtual theft over Zynga poker chips, in which a 29-year-old British IT businessman named Ashley Mitchell pleaded (or pled, depending on your colloquial acceptance) guilty to stealing $12 million worth of the virtual currency. You know what Zynga is -- it is responsible for FarmVille, Mafia Wars, Zynga Texas HoldEm Poker, and about 8,000 other social networking entities. The company is ubiquitous. It also sells an ungodly amount of virtual currency online and offline for its games. Zynga poker chips, however, cannot be bought offline.

    Mathew McCurley
    02.04.2011
  • Free for All: How much for a ten-spot?

    In this week's Free for All, I decided to check out some cash-shop games to see what I might get for 10 U.S. dollars. For the record, some games can be subscription-based and still have cash shops, and some games can have cash shops that have been redesigned and tweaked so that they do not fit into the same old "cash-shop" model. For clarity, I stuck to cash shops that normally pop up while you're in-game -- usually inside their own window. Sometimes, though, the cash shops might be accessed or found on the games' main websites, as well. It was hard to choose, being that I generally don't buy from cash shops any more. It takes a very special product (like Wurm Online's currency) to get me to pay, namely because I do not spend as much time in a single game as I used to. Actually, let me rephrase that before someone starts to write a comment based on that statement: I still spend a lot of time in certain games, like anyone else, but my pace has slowed. Most of the cash-shop items out there are convenience items -- simply time-travel devices that allow the player to speed up his experience. Since I have all the time in the world because of the free nature of these games, speeding up is not something I am interested in. So, let's look at a few cash shops to see what piqued my interest!

    Beau Hindman
    09.29.2010
  • GDC 2010: Ngmoco justifies the freemium model

    We have a lot of questions for the company, and we'll be asking even more of them coming later this week. But first things first: we cornered Ngmoco producer Allen Ma here in their suite at GDC 2010 and asked him to try and tell us why Ngmoco is so insistent on "freemium," and how they feel about some of the adverse customer reactions to their model. Read on to hear why free-to-play, pay-to-play-more is the model that they're betting their business on.

    Mike Schramm
    03.10.2010
  • GDC 2010: Ngmoco previews We Rule and GodFinger

    We stopped by Ngmoco's suite at GDC 2010 on the afternoon of the first day of the show, and got a chance to preview two upcoming titles they're working on testing and releasing soon. Both of the games follow Ngmoco's popular (and yet much-maligned) "freemium" model, in which you download the game for free with the option to buy in-game items or currency that can change up or speed your gameplay. Still, while the model might turn some players off, the games we saw were the kinds of games Ngmoco is slowly becoming known for: polished casual experiences that bring an established genre squarely into their business model. The first game we saw was called We Rule -- it's currently "beta testing" in the Canadian App Store and will be available to users in other App Stores soon. It was described to us as "Farmville meets Age of Empires," but what we saw was much more like Farmville rather than the more combat-based RTS title. The game opens on a screen full of "realms," each one developed and grown by one of your Ngmoco Plus+ friends, and you can zoom into your own to start building it up.

    Mike Schramm
    03.10.2010
  • Square Enix introduces 'Crysta' proprietary money system in Japan

    There's nothing quite like the feeling of exchanging your very own hard-earned cash for virtual ducats, knowing you'll never get it back. As it turns out, Japanese publisher Square Enix is a big fan of your money, and has just introduced its own proprietary currency to Japan. Named "Crysta" (not just the name of that questionable girl from your high school anymore!), the virtual money can be used for "online community games like Party Castle ... MMO Fantasy Earth Zero, and to purchase soundtracks off the Square Enix e-Store," according to Siliconera. No announcement has been made on whether or not "Crysta" will end up in North America just yet, but we imagine that Square Enix would be happy to take our money as well.

    Ben Gilbert
    12.16.2009
  • EVE Morning Report provides news-style daily snapshot of game's economy

    EVE Online is a game that can be different things to different people. While some players are intent on the destruction of their fellow capsuleers, others prefer to focus on other aspects of the game like trading and mass production. After all, EVE's setting of New Eden is one largely dominated by megacorporations. For those involved in the complexities of the game's economic side, having frequent snapshots of New Eden's virtual economy would be a boon. The game's would-be tycoons now have this, thanks to EVE Online player Utemetsu and the EVE Morning Report -- short, 5-minute audio recordings released daily that convey information about major commodities traded on the open market in New Eden. EVE Morning Report with Erik Mumm is presented in the style of NPR or the Marketplace Morning Report. It also provides players with the graphed price history of major commodities, captured from the in-game tools. The sponsors of the EVE Morning Report are other players whose various services are mentioned each day in exchange for their patronage. Although Utemetsu's program has only been running for a few days, EVE Morning Report is already expanding to include interviews with New Eden's marketeers. Individual EVE players, corporations, or alliances interested in sponsoring EVE Morning Report can contact Erik (Utemetsu) via email or let him know in the program's thread on the official EVE forums.

    James Egan
    11.23.2009
  • New legislation in China outlaws gold farming

    Gold farmers. We know you hate them... We know. And we've mentioned the associated gold spam as being the bane of many MMO players' existence a number of times in the past. But is the situation ever going to change? Perhaps, given the new legislation coming out of China this week. Of course while all gold farmers certainly aren't based in China, a substantial percentage of gold farming operations are in fact run from the country. Such operations may now find themselves under greater scrutiny by the Chinese authorities; the government has now established its first official rule on the use of virtual currency in China. Essentially, it states that virtual currency cannot leave the sphere of influence of its issuer. (Exact wording: "The virtual currency, which is converted into real money at a certain exchange rate, will only be allowed to trade in virtual goods and services provided by its issuer, not real goods and services.") If the law is actually obeyed and enforced, it would curb all manner of black market activities in China connected with the virtual.

    James Egan
    06.29.2009
  • EVE Online's largest player-run bank rocked by embezzlement

    We've just gotten word that EBANK, a player-run bank in EVE Online self-described as "the largest financial entity ever seen in EVE" has been rocked by embezzlement from its own CEO, Ricdic. The former CEO stole roughly 200 billion ISK from EBANK, which is roughly 8.6% of the entire 2.3 trillion ISK that EVE's playerbase has deposited. EBANK chairman Hexxx has issued a statement on the game's official forums, stating that Ricdic has been banned by CCP Games for engaging in RMT, also adding that the former CEO "has scammed." The loss of nearly 9% of EBANK's deposits is a serious blow to the player-run institution, perhaps as much to investor confidence in the bank as it is to their funds, but Hexxx says their liquidity is still between 400 billion and 500 billion ISK. A June 6th news item on the EBANK site written by bank auditor LaVista Vista states, "We are currently experiencing some technical problems. Therefore, we ask that people do not deposit any ISK, until we have solved the problem." EBANK's director and head teller Athre has now assumed the role of interim CEO, as the EBANK staff determines the best way forward from here.

    James Egan
    06.10.2009
  • A closer look at revenues in free-to-play MMOs

    The free-to-play business model in the MMO industry is one that lets users play a game for free in hopes that a percentage of that userbase will opt to embrace microtransactions, allowing F2P game operators to potentially bring in more revenue per month than they would maintain through subscription fees. We periodically see announcements of yearly revenue from some of the larger companies, but these figures are typically announcements of average revenue per paying user (ARPPU), emphasis on 'paying'. But how much money are free-to-play MMOs really making? This is the subject of an article at Gamasutra written by Paul Hyman titled, 'What Are The Rewards Of 'Free-To-Play' MMOs?" Hyman catches up with Raph Koster (Metaplace), Daniel James from Three Rings Design (Puzzle Pirates), and Jeremy Liew from Lightspeed Venture Partners (a funding source for F2P MMOs) to discuss the microtransaction model.

    James Egan
    06.10.2009