Monetising Game Play on Social Network Sites
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Transcript of Monetising Game Play on Social Network Sites
Monetising Game Play on Social Network Sites
Jon Matonis
31 March 2011
© 2010 KPMG LLC, an Isle of Man limited liability companyand a member firm of the KPMG network of independent member firmsaffiliated with KPMG International Cooperative ("KPMG International"), aSwiss entity. All rights reserved.
• Chief Forex Dealer at VISA International
• Director of Financial Services Vertical for VeriSign, Inc.
• CEO of Hush Communications, creator of encrypted Hushmail.com
• Editor of The Monetary Future blog on digital currencies
Overview
Social Gaming and Virtual Currency
© 2010 KPMG LLC, an Isle of Man limited liability companyand a member firm of the KPMG network of independent member firmsaffiliated with KPMG International Cooperative ("KPMG International"), aSwiss entity. All rights reserved.
Revenue Shift Away from Advertising
© 2010 KPMG LLC, an Isle of Man limited liability companyand a member firm of the KPMG network of independent member firmsaffiliated with KPMG International Cooperative ("KPMG International"), aSwiss entity. All rights reserved.
Virtual Goods Revenue Increasing
© 2010 KPMG LLC, an Isle of Man limited liability companyand a member firm of the KPMG network of independent member firmsaffiliated with KPMG International Cooperative ("KPMG International"), aSwiss entity. All rights reserved.
The Entrance of Facebook Credits
© 2010 KPMG LLC, an Isle of Man limited liability companyand a member firm of the KPMG network of independent member firmsaffiliated with KPMG International Cooperative ("KPMG International"), aSwiss entity. All rights reserved.
Social Gaming Beyond Facebook
© 2010 KPMG LLC, an Isle of Man limited liability companyand a member firm of the KPMG network of independent member firmsaffiliated with KPMG International Cooperative ("KPMG International"), aSwiss entity. All rights reserved.
• 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)
Types of Payment Choices for eGaming
© 2010 KPMG LLC, an Isle of Man limited liability companyand a member firm of the KPMG network of independent member firmsaffiliated with KPMG International Cooperative ("KPMG International"), aSwiss entity. All rights reserved.
• P2P capable
• Anonymous/pseudonymous
• Two-way convertibility
• Transactional non-repudiation
• Easily divisible
• Portable and offline capable
• Security and scarcity
• Frictionless (no transaction fees)
• Nearly instant deposits/withdrawals
Attributes of a True Virtual Currency
© 2010 KPMG LLC, an Isle of Man limited liability companyand a member firm of the KPMG network of independent member firmsaffiliated with KPMG International Cooperative ("KPMG International"), aSwiss entity. All rights reserved.
• 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’
Previous Barriers to a True Virtual Currency
Bitcoin: A New Entrant
© 2010 KPMG LLC, an Isle of Man limited liability companyand a member firm of the KPMG network of independent member firmsaffiliated with KPMG International Cooperative ("KPMG International"), aSwiss entity. All rights reserved.
• 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
What is Bitcoin?
© 2010 KPMG LLC, an Isle of Man limited liability companyand a member firm of the KPMG network of independent member firmsaffiliated with KPMG International Cooperative ("KPMG International"), aSwiss entity. All rights reserved.
• 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
Major Features of Bitcoin
© 2010 KPMG LLC, an Isle of Man limited liability companyand a member firm of the KPMG network of independent member firmsaffiliated with KPMG International Cooperative ("KPMG International"), aSwiss entity. All rights reserved.
• 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
Evolution of Bitcoin
© 2010 KPMG LLC, an Isle of Man limited liability companyand a member firm of the KPMG network of independent member firmsaffiliated with KPMG International Cooperative ("KPMG International"), aSwiss entity. All rights reserved.
• 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
Benefits of Bitcoin
© 2010 KPMG LLC, an Isle of Man limited liability companyand a member firm of the KPMG network of independent member firmsaffiliated with KPMG International Cooperative ("KPMG International"), aSwiss entity. All rights reserved.
eGaming Sites Currently Using Bitcoin
© 2010 KPMG LLC, an Isle of Man limited liability companyand a member firm of the KPMG network of independent member firmsaffiliated with KPMG International Cooperative ("KPMG International"), aSwiss entity. All rights reserved.
Map of Bitcoin Nodes
© 2010 KPMG LLC, an Isle of Man limited liability companyand a member firm of the KPMG network of independent member firmsaffiliated with KPMG International Cooperative ("KPMG International"), aSwiss entity. All rights reserved.
Total Bitcoins Issued Over Time
© 2010 KPMG LLC, an Isle of Man limited liability companyand a member firm of the KPMG network of independent member firmsaffiliated with KPMG International Cooperative ("KPMG International"), aSwiss entity. All rights reserved.
Bitcoin-USD Exchange Rate (Jul 2010 – Mar 2011)
Future Implications
© 2010 KPMG LLC, an Isle of Man limited liability companyand a member firm of the KPMG network of independent member firmsaffiliated with KPMG International Cooperative ("KPMG International"), aSwiss entity. All rights reserved.
• 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!
Google is the Player to Watch
© 2010 KPMG LLC, an Isle of Man limited liability companyand a member firm of the KPMG network of independent member firmsaffiliated with KPMG International Cooperative ("KPMG International"), aSwiss entity. All rights reserved.
“Digital cash is to legal tender as BitTorrents are to copyrights.” -- J. Matonis
The Dawn of the Cryptocurrency Economy
© 2010 KPMG LLC, an Isle of Man limited liability companyand a member firm of the KPMG network of independent member firmsaffiliated with KPMG International Cooperative ("KPMG International"), aSwiss entity. All rights reserved.
• 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
The Dawn of the Cryptocurrency Economy
A Digital Currency Revolution will......
© 2010 KPMG LLC, an Isle of Man limited liability companyand a member firm of the KPMG network of independent member firmsaffiliated with KPMG International Cooperative ("KPMG International"), aSwiss entity. All rights reserved.
• eGaming companies that adapt
• Prepaid operators
(Transact Networks, IDT, Wavecrest)
• eMoney and virtual currency exchanges
• Cryptocurrency market-makers
Opportunities for Gibraltar Jurisdiction
Thank You
Jon [email protected] twitter.com/jonmatonis