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What Price, Gold? Virtual Currency Can Mean Real Crime

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As has been said innumerable times in the past 28 columns here, virtual goods represent a huge and growing global market, worth billions of dollars annually. That's billions of real, not virtual dollars, mind you. But wherever there is money, there is also crime as one attracts the other with a sure inevetability.

This past week, The Guardian (a newspaper in the UK), reported a story about a labor camp in China forcing prisoners to play World of Warcraft in order to "farm gold". For those not familiar with virtual currency, this kind of crime can be a little difficult to wrap your head around.

It can be a bit hard to understand how "video game money" attracts real crime, and how that translates into real cash.

Money is Money

How various platforms handle virtual currency can vary. But no matter what, there is always a way, legally or illegally, to turn it into real cash.

In the case of Second Life (what I normally write about in this space) the currency is called Lindens. Unlike most forms of virtual currency it is designed to be a two- way street. You can not only buy Lindens for real money, you can cash Lindens back out again. There is a varying exchange rate, just like any other currency, as determined by the Lindex. Second Life has a functioning economy, where people can both lose money and make a real profit. This is why virtual businesses are so popular in SL- because you can make real money with it. Now, success at that varies widely of course, but it is actually possible.

In World of Warcraft (WoW), however (which is technically a game, and not a virtual world platform), there is no functionality for converting in game currency back out again legally to real world cash. So how do we get from that, to labor camp prisoners being forced to play WoW all day long?

Working In The Gold Mine

World of Warcraft is a game. It's set up as one. There's quests, and levels and monsters and bosses to fight. There's weapons to buy, and accessories to acquire, and specific goals to acheive. It also has an inworld currency (gold) that you can use to purchase goods and services.

But unlike Second Life, where you can simply purchase the in-game currency you need, in WoW, you must earn this currency. This generally involves doing a whole bunch of really repetitive and boring tasks that no one in their right mind would bother doing otherwise. Frankly, in that respect it's a lot like real life. Of course, few people want to do this tedious stuff, and because of that, there's a market to be exploited. Below is a video of a WoW player outlining their strategy to make profits:

The Gold Trade

The way it works is simple. You have a bunch of WoW accounts that do absolutely nothing except farm for gold (see: boring, tedious stuff). Then that gold gets collected, and sold to an interested buyer, who makes a payment via paypal in real money for the in-game currency. Money is exchanged, and the buyer now has in-game currency they didn't have to spend hours messing about doing the equivalent of pulling sock lint from between your toes. If you're not the one who has to spend the hours farming the gold, and are simply making the profit, then this is easy money. Now the forced labor camp angle makes much more sense.

world-warcraft-goldImage Credit: Ever bought gold for an MMO? Well here are 3 reasons you shouldn’t.

Of course, all of this is technically illegal from Blizzard's (the game manufacturer) point of view, and if they find out about it, they can suspend or ban your account. Gold sellers try to paint a spin of legitimacy on their actions by claiming that if the gold is legally farmed and not stolen then it's ok, but the truth is Blizzard doesn't much care either way - in their eyes it's still a bannable offense.

However the illegal gold trade in WoW is very popular. People are always going to be willing to pay for convenience - in this case the convenience of not having to waste valuable gaming hours farming. However with this trade comes a lot of other, less savory stuff, much of it coming from China. Labor costs there are extremely inexpensive, and payments come in in dollars or euros making the exchange a ridiculously profitable operation.

However, buying gold in this way is risky even if Blizzard never catches on. Once you purchase gold, your account is identified to the person you purchased it from, including what game server your character is attached to. This increases the risk of hacking and potential theft. The more information you give to a crook, the more they can use it against you (gee, this is beginning to sound awfully familiar).

Emerging Worlds, Emerging Crime

As more and more types of virtual currency come into existence, the more these and other kinds of crime will emerge as well. Partially because this is a new and untested medium and means of identifying, stopping and prosecuting these kinds of crimes is playing catch up with the medium itself. But second because where there's the potential for financial gain, crime will eventually follow.

In Second Life, because of the two way economy (and since there's been a crackdown on camping for cash) this particular spin on the money trade scam isn't generally seen. However, there's another version of it. Some people, generally folks outside the US who can't get verified through paypal or another known online exchange service for whatever reasons, turn to little known third party Linden resellers who may or may not be legitimate. The results can often... be less than ideal.

Keep Your Eye On Your Wallet

In the digital world, there's also an additional potential for damage when information is linked, forming a chain that can lead people to RL banking information. In light of the fact that many people use the same password for everything, one slip-up in a virtual world could have very real consequences elsewhere. As virtual worlds and currencies are so difficult to regulate effectively and the law has not yet caught up, the potential for fraud, money laundering, account hacking and other forms of digital crime continue to pop up like weeds- even, apparently in Chinese forced labor camps.


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