Hedging real-world money online

Friday, 2 July, 2004

I found Gaming Open Market via buy sell buy sell from Ben Hammersley's Dangerous Precedent and am now wondering how long it will be before you see an EverQuest hedge fund.

See, when you play online games you can earn various rewards, usually denominated in some sort of virtual currency. In the game world you can trade currency for items and vice versa. Someone, somewhere got the idea of trading virtual currency for real currency, through eBay and other venues.

The Gaming Open Market site is (apparently, I've done all of ten seconds research on it) conducting a sort of FOREX market for virtual-real world currencies.

You can read more about this phenomenon in Game Theories by Clive Thompson. Game Theories is about the work and research of Edward Castronova into virtual world economies, auctions, and the crossover into real-world finance.

What I wonder, in addition to the hedge fund idea, which I should probably file a business models patent for, anyway: if activities in an online virtual world can be readily translated into real world materials and actions, what makes the virtual world virtual?