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Monetising Game Play on Social Network Sites


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KPMG eGaming Summit 31 Mar 2011

KPMG eGaming Summit 31 Mar 2011

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