Speculation alone will not drive cryptocurrency adoption – innovation and utility will. With that in mind, Coinbase’s CEO, Brian Armstrong, predicts that VR, virtual reality, will be a massive influence on cryptocurrency as a whole. Do you think the same way? Do you think VR will massively boost cryptocurrency or do you think it’ll cause cryptocurrency to tumble? Let’s see what Armstrong says about how technological advances in VR boosting cryptocurrencies will come to fruition.
Brian Armstrong believes that cryptocurrencies will become the preferred currency in VR. Brian Armstrong states this in his blog titled: Digital Currency Could Be Widely Used in VR.
Armstrong is very optimistic. He believes that transactions in VR will no longer be carried out by a uni-currency or even fiat-based currency. IE: he believes that when people trade in virtual worlds, it’ll become rude or inconsiderate to rely on or use the currency of one country. Digital currency that is used in the world will instead be the digital currency de jour of VR. After all, 0.1 bitcoin is 0.1 bitcoin, regardless of country of origin.
Armstrong’s hypothesis further explores the idea that many companies and many investors will stay on these virtual worlds to make easy profit – digital currencies, therefore, that are used in VR, will have real world value and purchasing power, therefore, an incentive for companies and investors to hold on to their digital currency and forward adoption.
Differences Between Virtual Reality and Virtual Currency
Virtual Reality, according to Armstrong, include “things like second life. VR is not required to have a virtual world (Second Life is an example here), but VR will likely accelerate the usage of virtual worlds dramatically.”
In layman’s terms, Virtual Reality involves experiencing an ecosystem that’s been digitized or computer generated, with the use of VR devices like the Oculus Rift, Google Cardboard, HTC Vive, etc etc. VR is fast approaching mainstream system adoption, with projected revenue of close to $27 billion by 2022.
Armstrong believes that any market system that pops up in VR will operate in a way that anything can be purchased. People will be able to buy all kinds of assets in VR – such as services (songs, experiences), teleportation, fashion and clothing, real estate, and vehicles.
Unlike some games where buying something with the in-house currency allows you to keep something in your inventory, buying something in VR using digital currency can conceivably be truly yours to own. Armstrong notes that a mechanism is already in place to facilitate this easily – blockchain technology. For Armstrong, this means that cryptocurrency becomes a means of exchange for assets, as well as an asset itself which can totally replace real money.
Armstrong then pointed out to companies like High Fidelity, Alt Space, and VR Chat are already working hard on virtual worlds in virtual reality. He cites them as a reason for his bullishness on cryptocurrency adoption via VR adoption.
In his article posted on his blog, Armstrong highlights a handful of ways investors, content creators, developers, and users of virtual worlds can benefit by the product of their creation, especially when paired with the adoption of a cryptocurrency in those worlds, which is decentralized. He also went over the cons of this development – giving a balanced and thoughtful reasoning for why developers of virtual worlds could and should adopt cryptocurrency for their worlds.
Armstrong noted that developers could:
- Create a centralized digital currency which goes counter to decentralized cryptocurrency…
- Use an existing decentralized digital currency like Bitcoin or Ethereum
- Also issue their own token on any of the major coins
There are clear implications and consequences for these options for participants and content creators. If using cryptocurrency, content creators and service providers could feasibly “work” in virtual reality, then using their decentralized cryptocurrency earnings to pay their bills while earning and living in these virtual worlds.
If this were to happen, Armstrong believes that people will be willing to come and stake games in the virtual world. If the opportunity arose that someone could “work” in virtual reality for a couple of hours and be compensated for that time, more gamers and individuals alike would be prompted to spend more time in that virtual world, increasing their game time.
“More people will spend time in the game. Perhaps they will even earn a living in the virtual world that pays their rent in the real world.. If this happens, you could see people spend 8 to 12 hours per day” Armstrong says.
The biggest draw for adopting cryptocurrency is aimed towards game app developers. Using digital currency in virtual worlds would be a great deal for app developers and content generators as they could commercialize their ideas, products, and innovations.
Specifically, this would create a popular business model and incentivize content creators to continuously add, tweak, service, and create more content. By fueling this business model with cryptocurrency, this would give a large part of the population using VR to earn a living just from VR. They could convert their earnings to their local currency. This is the next frontier for an untapped economic ecosystem.
Therein lies the biggest pull for content developers and VR to use cryptocurrency – and how VR could massively push adoption of cryptocurrency itself – its a self-feeding cycle. Consumers would have a tangible reason to spend a massive amount of time and energy in VR, and content creators would have an equally tangible reason to continue incentivizing consumers to spend time in VR. When consumers and content creators cash out their earnings in VR and convert them to fiat to pay bills, therein lies the beauty of how VR could push mass adoption of cryptocurrency – those individuals who may have never even touched a cryptocurrency wallet would be skilled at converting those digital currencies into hard currencies to use in real life. They would be the ones to blur the lines between the virtual and the real world.
Does this sound like a pipe dream? We haven’t talked much about VR on this blog before, but it’s an important area to think about. We know that financial institutions and Bakkt will be coming into the marketplace soon – but it’s also important to look past short term financial moves and look towards adoption and utility. Do you think VR will be a successful vector for adoption? Let us know on our Facebook page!
