Why Bitcoin?: Structure and Efficiency of Markets for Online Game Currency

Abstract

Multi-player online games have own virtual currencies. These game currencies are similar to other virtual currencies like Bitcoin, in that both of the currencies are created and managed by non-government entities. Competitions in multi-player online games naturally formed markets that exchanges game currency with real currency. These markets have liquidity and efficiency comparable to that of US major stock exchanges and the markets tightly connects virtual economies with real economies. With the markets, game currencies have a larger potential than other virtual currencies to substitute some of real currencies’ role as a method of transaction.