Digital Goods

Blockchain is often critized as a solution in search of a problem

So here’s an idea for a “blockchain” application that could be useful

The Hypothetical P2P MMO

Suppose there’s a P2P massively multiplayer virtual world.

And in this world, in-game objects—character appearances, etc—are created by “peers”. Virtual tems are not dependent on a central authority for distribution or validation.

How could these “peer-created” objects be monetized by their creators?

A creator could “mint” a limited number of copies of their digital object. Then sell the digital item to players as a digital “token”. The actual data that compose a 3D are not encrypted and can be distributed in a public “off-chain” method. Only the fact that a user authentically has the right to use said item is enforced by the blockchain. The associating between the data of the asset and the token expressing its ownership is done through code signing

The token serves as a form of Digital Rights Management for the P2P system.

But what incentives do players have to care about digital ownership? Since the virtual world is P2P, in practice each player has complete control of their virtual world client. Can’t they just “hack” their game clients to not verify ownership of digital assets?

The “hacked” client of the person doing the counterfeiting would be unobstructed by any ownership restrictiong imposed by the blockchain. But it’s a different story for other players in the online world.

This method of digital ownership works especially well for “cosmetic” virtual items. That is, items that don’t grant the user any extra utility or ability in the virtual world. A player wields such items purely for expressive reasons (skill, wealth, status, etc.)

We’ve seen expression or exhibition of some kind of status is the main motivator for this type of cosmetic items in various centralized online games.

Since the reason for people bearing these items is rooted in authenticity, players would be incentivized to use game clients that check the authenticity of other player’s in-game items.

Bearing counterfit goods has a social penalty. Compared to physical goods, authenticity can be determined trivially with the proposed scheme for digital goods.

For example, if you encountered a player wearing a shirt that did pass an ownership check, your client would render a mark of shame missing texture instead of the desired appearance of the shirt.

To further diminish incentives for people to use a client that tolerates forgeries, whatever mark of “forgery” shoudldn’t fundamentally break other functionality in the world. The pressures and incentives should be purely social.