Should Crypto Be the Universal Currency for Gaming and Entertainment?

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The entertainment world has long been an innovator, both in terms of technology as well as finance. From pioneering new media distribution formats, to changing the way people buy and consume content, the sector has never been shy of pushing boundaries. Entertainment services such as gaming have pioneered and established the use of micropayments, allowing for in-app purchases incremental ownership of content – buying an album a song at a time for instance.

Today, the entertainment sector has completed the leap into an all-digital ecosystem. Broadcasting, cinema, gaming, music, radio, all these platforms have discarded analogue and pre-recorded formats as their primary routes to market. Instead, all are digital in the way they deliver content to and interact with their audiences. With content now a digital product, it is little surprise that the way we pay for transactions is also changing. Moving away from physical money to digital currency units that can operate globally, rather than being tied to a single country or continent.

Terra Virtua is one such example of this. It is transforming VR gaming and entertainment with a new platform. One that allows users greater control within its economy. This is an important element of socially-driven gaming that has traditionally been controlled by the video game platform giants. Terra Virtua offers a unique Netflix-style subscription service to access VR content across games, eSports, movies, live events and more. Such a model differs from traditional online games platforms, such as Steam, that require outright purchase of each and every game/app.

A brand new cryptocurrency, the TERRA token coin (ticker ‘TVT’) is the currency within the platform. It allows consumers to purchase content such as games, movies, gigs and sports events. It will also enable in-game and in-platform purchases. The coin is also the basis by which content creators are paid for their creations, with the blockchain serving as a highly scalable and reliable record of how content has been used, and what has been earned by content creators.

A cryptocurrency for a new digital ecosystem

There are many reasons for having an in-app or in-platform token economy. Globalisation is at the core of the approach. Cryptocurrencies and utility tokens benefit from being global units of value, breaking away from the regional and compartmentalised value structures associated with the pound, the dollar, the euro, the yen and so on. The in-platform value of a TVT is the same in London as it is in Beijing.

Rather than a game or a gig costing £14.99 in the UK and €12.99 in Europe, it can be 13 token units in all markets. The exchange value of those tokens outside of the platform can be the element that fluctuates from country to country.

Standardisation of in-platform economics on this basis makes for easier marketing (the same pricing globally eliminates the need for region-specific marketing materials and offers), more accurate income estimates (money is already deposited within the platform, so becomes available as soon as it is spent, not days later when a card issuer releases it) and it builds in customer loyalty (users are actively investing in the platform by committing their money).

Then there is the accuracy of transactions and accrued revenue. Terra Virtua’s identity and gameplay data storage is based on a blockchain-secured network. Player accounts and the most important game data (e.g. ownership of valuable items) are stored and protected with an encrypted name/value store added and continuously updated directly into the Terra Virtua blockchain. If disputes arise, they can be resolved by referring back to the blockchain-based timestamp record of events that is immutably recorded on the blockchain. By using the time-stamping property of blockchain technology, Terra Virtua is able to develop a fraudproof protocol that ensures the occurring data can never be lost or manipulated by any Terra Virtua participants.

The blockchain allows for tradable in-game items. Ownership is securely tracked, and it enables trustless trades – no central middleman required – for exchanging TERRA (TVT) or exchanging items. This works by transferring both the sold item and the corresponding payment in TERRA between the two participants of a trade in a single transaction, governed by a smart, self-executing contract. This transaction needs to be verified by both parties, so that either both transfers happen or neither do. This prevents fraud where just a payment is made, and the item isn’t transferred in return, or vice versa.

Entertainment and the blockchain

Decentralisation, absolute transparency and undisputable bookkeeping using the blockchain helps content creators overcome some of the challenges associated with indirect access to the end consumer. The value proposition to content developers of the Terra Virtua approach is that they can fully capitalise on the economic interactions between the in-game experiences and the users.

The blockchain provides a basis for all the revenue elements to be laid out in the open, so that content creators such as games developers, music artists, film studios etc. can see exactly how many people have used or viewed their material and when. It also provides a basis for faster settlement of payments. With such accurate and near real-time journaling of transactions, there’s no reason that royalties can’t be paid daily, weekly or monthly. Such an approach is a breath of fresh air in an industry where some streaming services can take up to a year to settle royalties, often using ‘black box’ metrics to calculate what is owed. All with little or no explanation to the content creator about how the final figure was reached.

Such a prospect is a real boon for independent software developers and small production houses alike, organisations that lack the robust cashflow to wait a year to monetise their work. It also means that content creators will always get a revenue share – even from the resale of assets or content. This is something the blockchain can facilitate that can’t be easily achieved within the traditional economy.

Terra Virtua is currently engaged in a pre-sale of the TERRA (TVT) utility token. It will be initially tracked on the Ethereum blockchain using an ERC20 smart contract.

In-platform economies powered by cryptocurrencies represent a far more reliable, tradable and honest form of globalised currency unit than any gift card or on-deposit balance can offer. When the currency is global, so too is the user experience and the market opportunity.