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« Gone West | Main | End the cash menace now! »

The whole real/virtual thing is a bit fuzzy

By davebirch posted Mar 18 2006 at 9:10 AM

[Dave Birch] The whole world of really virtual money continues to fascinate. One thing fascinates me in particular: the relationship between virtual currency, free trade and prosperity. To be more specific: in some low labour-cost countries, such as China, people are paid to play games such as World of Warcraft and engage in the mundane and repetitive tasks, such as mining virtual gold in a virtual gold mine. They then exchange this virtual gold for real money (the traders sell the virtual gold on to people like me who are richer but time poor and can't be bothered to play the game in this way).


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These people are called “goldfarmers”. There's a fascinating preview of a documentary about goldfarmers up at YouTube at the moment.

At the time of writing, 500 World of Warcraft (WoW) gold pieces cost about 30 euros. It's a liquid market though, so check the spot prices and don't forget to shop around. As further testament to the fuzziness of the real/virtual boundary, you can even donate virtual currency to real charities. (Note to Digital Money Forum delegates: Consult Hyperion will be donating real currency to our chosen charities again!)

A Chinese goldfarmer earns around $100-$120 per month according to the various estimates floating around, whereas an actual Chinese farmer makes around $40 per month (2005 figures). Actual miners in China seem to earn even less: about $12 per month (and tend to die vastly more often than people playing World of Warcraft).

China is the world's 4th largest gold producer: it has around a thousand gold mining operations and produces about 200 tonnes of the stuff per annum. Hence it is so interesting to reflect on the fact that it has thousands and thousands of people who earn more money mining virtual gold than their fellows earn from mining actual gold.

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Comments

Actually quite a mind boggling subject. I like how you compare masses of money, to show perspective. Very similar to the telecommunications industry versus entertainment industry comments you made recently. And similar to how I have tried to quantify payment card commoditization versus fraud.

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