The Rise of Virtual Economies
As our lives become ever more virtual, retailers are betting there will be increasing demand for virtual goods as well. In the future, gaming and retail will be a fully integrated experience.
Thomas Jefferson envisioned America as a nation of small farmers. But today millions more Americans cultivate virtual farms in online games like FarmVille and Ranch Town than work in real cornfields. Over 200 million people around the globe play Facebook games each month, and millions more play online role playing games like World of Warcraft or interact in the virtual world Second Life. And as our social lives become more and more virtual, retailers and advertisers are betting there will be increasing demand for virtual goods as well. In the future, gaming and retail will be a fully integrated experience.
The U.S. virtual goods market is expected to grow to $2.1 billion in 2011, about half of which are items purchased in popular Facebook games. With over 80 million active users, FarmVille is currently the most popular online game on Facebook, but it is just one of many online games in which thousands of players can interact and spend real money on virtual goods. In Farmville, players can buy seeds to plant in their farm; they can even give a cow or horse to a friend. In Sorority Life, another game from Farmville developers Zynga, players can spend money on formal wear, gifts for friends, and limited edition boyfriends.
Jesse Schell, CEO of Schell Games, explains to Big Think that convincing people to spend real money inside video games is not naturally intuitive to video game designers—but they're getting better at it. "What you have to do is you have to create a situation where people are going to want to put money in," he says. "So you have to find a way that people are going to feel invested, and if you look at the way a lot of the successful online games are created—particularly the free ones—they create a situation where they work hard to get you psychologically invested, and then they find exactly the appropriate time to kind of say, 'You know, this game could be a little better if you would just put five bucks or if you would just put ten dollars in.'"
The prospect of paying real money for something that doesn't exist may sound like a waste of money, but Edward Castronova, a professor of telecommunications at Indiana University, says that virtual goods are not that different from real ones. People buy virtual goods for a variety of reasons: they can provide entertainment, indicate social status, or boost social capital through gifting. Aside from basic necessities, don't we buy real goods for similar reasons, he asks. With so much of what we consume, the value is essentially "virtual," not tied to any objective use, says Castronova. According to the Department of Labor, entertainment makes up only 5.49% of household expenditures, but much of the remaining 77% for housing, food, apparel, transportation, and miscellaneous expenditures is tied to social status. As more consumers begin to play online games, virtual goods will "unquestionably" take a chunk out of the market for these real goods, he believes.
Until recently, a major limitation of virtual purchases was that each online economy, whether FarmVille, World of Warcraft, or Second Life, had its own currency. But Facebook is looking to change all that with its new currency, Facebook Credits. The company plans to make Credits a universal virtual currency that can be used not only across all Facebook applications but also outside of Facebook. Currently, Facebook Credits aren't technically a currency; they are a commodity, like airline miles, that can be exchanged for virtual goods in many of the half-million Facebook applications. The next logical step is that Facebook would allow people to use this virtual commodity to purchase real goods and services in an online marketplace.
Facebook Credits won't become a "real" currency until they are tradable or until one can exchange them for cash. "There needs to be a mechanism for setting a value for Facebook Credits in the currency/foreign exchange market," says Brett King, author of "Bank 2.0." He is optimistic that "once speculators can trade on Facebook credits, then that is when we know that it is a real currency." But how exactly will this transaction occur? King envisions a company like Western Union offering a physical exchange office. "Bring USD, walk out with FB credits in your Facebook account, or vice-versa." Or the transaction could remain entirely online. "Imagine PayPal offering you the option to cash out Facebook Credits for a fixed fee of $1.00 or similar. Then if you need to pay your plumber, dog sitter, or cleaning lady, you could do it via Facebook. They could then transfer the money from Facebook to their bank account via PayPal."
Obviously there are reasons why nations wouldn't want a corporation to issue its own currency. If it were a country, Facebook would be the third largest in the world. So its currency could theoretically exert strong pressures on the dollar, the Euro, or other "real" currencies. "If people feel that Facebook Credits are going to rise in value, then they might take U.S. dollars and exchange them for Facebook Credits; if enough people do that then the value of the USD starts to decline against Facebook’s currency," says King. "Then it is just a matter of time before the reverse happens. Think about the fact that Facebook has a population of 500 million people. If even 10 per cent of those start trading Facebook Credits then it would potentially be a more powerful currency than say the Aussie, Hong Kong or Singapore dollars."
Something similar has already happened. In China in 2007, a virtual currency called the QQ coin made the jump from commodity to real currency. In rural areas of China, where the Internet is far more prevalent than credit cards, stores began to accept virtual QQ coins as payment for real goods and services. "QQ coins become so ubiquitous and were being traded with such volume and frequency that they did start to drag down the value of the Yuan," King says. "People were essentially cashing in their real Chinese currency (Yuan/RMB) to buy QQ coins. QQ coins were appreciating in value against the Yuan. Thus, within China the Yuan was starting to get devalued against a virtual currency, meaning you had more buying power with QQ coins than physical notes. This was pretty scary for the Chinese government—even the US couldn’t achieve this level of disruption to the Yuan."
Is it far-fetched to think that virtual goods and Facebook Credits could have such a large impact on the real economy in the U.S. or Europe? Stranger things have happened. Surely Jefferson couldn't have imagined a day when we would spend real money to plant digital seeds made up of ones and zeros.
— Department of Labor infographic on American household expenditures.
— TechCrunch feature on the business of virtual goods.
A large new study uses an online game to inoculate people against fake news.
- Researchers from the University of Cambridge use an online game to inoculate people against fake news.
- The study sample included 15,000 players.
- The scientists hope to use such tactics to protect whole societies against disinformation.
Researchers hope the technology will further our understanding of the brain, but lawmakers may not be ready for the ethical challenges.
- Researchers at the Yale School of Medicine successfully restored some functions to pig brains that had been dead for hours.
- They hope the technology will advance our understanding of the brain, potentially developing new treatments for debilitating diseases and disorders.
- The research raises many ethical questions and puts to the test our current understanding of death.
The image of an undead brain coming back to live again is the stuff of science fiction. Not just any science fiction, specifically B-grade sci fi. What instantly springs to mind is the black-and-white horrors of films like Fiend Without a Face. Bad acting. Plastic monstrosities. Visible strings. And a spinal cord that, for some reason, is also a tentacle?
But like any good science fiction, it's only a matter of time before some manner of it seeps into our reality. This week's Nature published the findings of researchers who managed to restore function to pigs' brains that were clinically dead. At least, what we once thought of as dead.
What's dead may never die, it seems
The researchers did not hail from House Greyjoy — "What is dead may never die" — but came largely from the Yale School of Medicine. They connected 32 pig brains to a system called BrainEx. BrainEx is an artificial perfusion system — that is, a system that takes over the functions normally regulated by the organ. The pigs had been killed four hours earlier at a U.S. Department of Agriculture slaughterhouse; their brains completely removed from the skulls.
BrainEx pumped an experiment solution into the brain that essentially mimic blood flow. It brought oxygen and nutrients to the tissues, giving brain cells the resources to begin many normal functions. The cells began consuming and metabolizing sugars. The brains' immune systems kicked in. Neuron samples could carry an electrical signal. Some brain cells even responded to drugs.
The researchers have managed to keep some brains alive for up to 36 hours, and currently do not know if BrainEx can have sustained the brains longer. "It is conceivable we are just preventing the inevitable, and the brain won't be able to recover," said Nenad Sestan, Yale neuroscientist and the lead researcher.
As a control, other brains received either a fake solution or no solution at all. None revived brain activity and deteriorated as normal.
The researchers hope the technology can enhance our ability to study the brain and its cellular functions. One of the main avenues of such studies would be brain disorders and diseases. This could point the way to developing new of treatments for the likes of brain injuries, Alzheimer's, Huntington's, and neurodegenerative conditions.
"This is an extraordinary and very promising breakthrough for neuroscience. It immediately offers a much better model for studying the human brain, which is extraordinarily important, given the vast amount of human suffering from diseases of the mind [and] brain," Nita Farahany, the bioethicists at the Duke University School of Law who wrote the study's commentary, told National Geographic.
An ethical gray matter
Before anyone gets an Island of Dr. Moreau vibe, it's worth noting that the brains did not approach neural activity anywhere near consciousness.
The BrainEx solution contained chemicals that prevented neurons from firing. To be extra cautious, the researchers also monitored the brains for any such activity and were prepared to administer an anesthetic should they have seen signs of consciousness.
Even so, the research signals a massive debate to come regarding medical ethics and our definition of death.
Most countries define death, clinically speaking, as the irreversible loss of brain or circulatory function. This definition was already at odds with some folk- and value-centric understandings, but where do we go if it becomes possible to reverse clinical death with artificial perfusion?
"This is wild," Jonathan Moreno, a bioethicist at the University of Pennsylvania, told the New York Times. "If ever there was an issue that merited big public deliberation on the ethics of science and medicine, this is one."
One possible consequence involves organ donations. Some European countries require emergency responders to use a process that preserves organs when they cannot resuscitate a person. They continue to pump blood throughout the body, but use a "thoracic aortic occlusion balloon" to prevent that blood from reaching the brain.
The system is already controversial because it raises concerns about what caused the patient's death. But what happens when brain death becomes readily reversible? Stuart Younger, a bioethicist at Case Western Reserve University, told Nature that if BrainEx were to become widely available, it could shrink the pool of eligible donors.
"There's a potential conflict here between the interests of potential donors — who might not even be donors — and people who are waiting for organs," he said.
It will be a while before such experiments go anywhere near human subjects. A more immediate ethical question relates to how such experiments harm animal subjects.
Ethical review boards evaluate research protocols and can reject any that causes undue pain, suffering, or distress. Since dead animals feel no pain, suffer no trauma, they are typically approved as subjects. But how do such boards make a judgement regarding the suffering of a "cellularly active" brain? The distress of a partially alive brain?
The dilemma is unprecedented.
Setting new boundaries
Another science fiction story that comes to mind when discussing this story is, of course, Frankenstein. As Farahany told National Geographic: "It is definitely has [sic] a good science-fiction element to it, and it is restoring cellular function where we previously thought impossible. But to have Frankenstein, you need some degree of consciousness, some 'there' there. [The researchers] did not recover any form of consciousness in this study, and it is still unclear if we ever could. But we are one step closer to that possibility."
She's right. The researchers undertook their research for the betterment of humanity, and we may one day reap some unimaginable medical benefits from it. The ethical questions, however, remain as unsettling as the stories they remind us of.
Many governments do not report, or misreport, the numbers of refugees who enter their country.
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