Monetising Game Play on Social Network Sites


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KPMG eGaming Summit 31 Mar 2011

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Monetising Game Play on Social Network Sites

  1. 1. Monetising Game Play on Social Network Sites<br />Jon Matonis<br />31 March 2011<br />
  2. 2. Overview<br />Chief Forex Dealer at VISA International<br />Director of Financial Services Vertical for VeriSign, Inc.<br />CEO of Hush Communications, creator of encrypted<br />Editor of The Monetary Future blog on digital currencies<br />
  3. 3. Social Gaming and Virtual Currency<br />
  4. 4. Revenue Shift Away from Advertising<br />
  5. 5. Virtual Goods Revenue Increasing<br />
  6. 6. The Entrance of Facebook Credits<br />
  7. 7. Social Gaming Beyond Facebook<br />
  8. 8. Types of Payment Choices for eGaming<br />Credit card/debit card<br />EFT wire transfer/eCheck/ACH<br />Cashier’s check/money order<br />Western Union/MoneyGram<br />Proxy eWallet account (Click2Pay, Moneybookers, MyPaylinQ, Neteller, Ukash, Webmoney, etc.)<br />Mobile payment<br />Non-political virtual currency unit (Facebook Credits, Linden Dollars)<br />
  9. 9. Attributes of a True Virtual Currency<br />P2P capable<br />Anonymous/pseudonymous<br />Two-way convertibility<br />Transactional non-repudiation<br />Easily divisible<br />Portable and offline capable<br />Security and scarcity<br />Frictionless (no transaction fees)<br />Nearly instant deposits/withdrawals<br />
  10. 10. Previous Barriers to a True Virtual Currency<br />Gold bullion cannot be molecularly transported across the Internet<br />Emulating the anonymity features of physical cash or gaming chips is difficult<br />Digital bearer certificates have to verify against a centralised ‘mint’ which creates a single point of failure<br />Decentralisation opens up the possibility for double spending the digital ‘coins’<br />
  11. 11. Bitcoin: A New Entrant<br />
  12. 12. What is Bitcoin?<br />One of the first implementations of a concept called cryptocurrency (circa, 1998)<br />Does not rely on trusting any central issuer<br />Relies on the transfer of amounts between accounts using public key cryptography (like PGP for money)<br />Scarcity based on a reusable proof-of-work<br />Double-spending prevented by a distributed time server implementing chained RPOWs<br />
  13. 13. Major Features of Bitcoin<br />Current size of economy (~BTC 6,000,000)<br />Nodes connected (5,000-10,000)<br />Trading turnover (equivalent $30,000/day)<br />Decentralised confirmations<br />Distributed nodes (peer-to-peer)<br />Open source software (peer reviewed)<br />Non-political unit of account<br />Independent market-based exchange rate<br />
  14. 14. Evolution of Bitcoin<br />31/10/08 Bitcoin academic paper published<br />11/01/09 Bitcoin v0.1 released<br />17/07/10 MtGox exchange established<br />06/11/10 Bitcoin economy passes $1.0m<br />09/12/10 Generation difficulty passes 10,000<br />28/01/11 Block 105000 generated, 5.25m/21m<br />11/02/11 Bitcoin reaches USD parity, $1/BTC<br />03/03/11 Bitcoin v0.3.20.2 released<br />27/03/11 First BTC:GBP exchange opens<br />
  15. 15. Benefits of Bitcoin<br />Bitcoin is ideally suited to the eGaming and online casino financial requirements<br />Monetary properties and features emulate the physical gaming chips in a real-world casino<br />Features correlate to the customer demand for a digital/virtual currency<br />
  16. 16. eGaming Sites Currently Using Bitcoin<br />
  17. 17. Map of Bitcoin Nodes<br />
  18. 18. Total Bitcoins Issued Over Time<br />
  19. 19. Bitcoin-USD Exchange Rate (Jul 2010 – Mar 2011)<br />
  20. 20. Future Implications<br />
  21. 21. Google is the Player to Watch<br />Google acquires Social Gold, a virtual currency platform (August 2010)<br />Google acquires Zetawire to look after NFC payments (December 2010)<br />Google releases BitcoinJ, a bitcoin client for Java (March 2011)<br />Google now has 750 staff in payments division!<br />
  22. 22. The Dawn of the Cryptocurrency Economy<br />“Digital cash is to legal tender as BitTorrents are to copyrights.” -- J. Matonis<br />
  23. 23. The Dawn of the Cryptocurrency Economy<br />A Digital Currency Revolution will......<br />Fundamentally alter the current hierarchy of central banking and banks<br />Challenge traditional value depositories<br />Cause KYC rules for certain transactions to become irrelevant<br />Make monetary and taxation jurisdictions less important<br />
  24. 24. Opportunities for Gibraltar Jurisdiction<br />eGaming companies that adapt<br />Prepaid operators<br /> (Transact Networks, IDT, Wavecrest)<br />eMoney and virtual currency exchanges<br />Cryptocurrency market-makers<br />
  25. 25. Thank You<br />Jon Matonis<br /><br />