Monetising Game Play on

celerymoldwarpSecurity

Dec 3, 2013 (3 years and 9 months ago)

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Monetising Game Play on
Social Network Sites
Jon Matonis
© 2010 KPMG LLC, an Isle of Man limited liability company
and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative ("KPMG International"), a
Swiss 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 company
and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative ("KPMG International"), a
Swiss entity. All rights reserved.
Revenue Shift Away from Advertising
© 2010 KPMG LLC, an Isle of Man limited liability company
and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative ("KPMG International"), a
Swiss entity. All rights reserved.
Virtual Goods Revenue Increasing
© 2010 KPMG LLC, an Isle of Man limited liability company
and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative ("KPMG International"), a
Swiss entity. All rights reserved.
The Entrance of Facebook Credits
© 2010 KPMG LLC, an Isle of Man limited liability company
and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative ("KPMG International"), a
Swiss entity. All rights reserved.
Social Gaming Beyond Facebook
© 2010 KPMG LLC, an Isle of Man limited liability company
and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative ("KPMG International"), a
Swiss 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 company
and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative ("KPMG International"), a
Swiss 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 company
and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative ("KPMG International"), a
Swiss 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 company
and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative ("KPMG International"), a
Swiss 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 company
and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative ("KPMG International"), a
Swiss 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 company
and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative ("KPMG International"), a
Swiss 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 company
and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative ("KPMG International"), a
Swiss 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 company
and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative ("KPMG International"), a
Swiss entity. All rights reserved.
eGaming Sites Currently Using Bitcoin
© 2010 KPMG LLC, an Isle of Man limited liability company
and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative ("KPMG International"), a
Swiss entity. All rights reserved.
Map of Bitcoin Nodes
© 2010 KPMG LLC, an Isle of Man limited liability company
and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative ("KPMG International"), a
Swiss entity. All rights reserved.
Total Bitcoins Issued Over Time
© 2010 KPMG LLC, an Isle of Man limited liability company
and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative ("KPMG International"), a
Swiss entity. All rights reserved.
Bitcoin
-
USD Exchange Rate (Jul 2010

Mar 2011)
Future
Implications
© 2010 KPMG LLC, an Isle of Man limited liability company
and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative ("KPMG International"), a
Swiss 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 company
and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative ("KPMG International"), a
Swiss 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 company
and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative ("KPMG International"), a
Swiss 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 company
and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative ("KPMG International"), a
Swiss 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 Matonis
matonis@hushmail.com
twitter.com/jonmatonis