Virtual Economies: Why They Are The Key To Overcoming Income InequalitysteemCreated with Sketch.

in LeoFinance •  15 days ago 

It is widely recognized that the income and wealth inequality around the world is reaching unsustainable levels. Basically we are looking at two classes of people: the rich and the poor. Third world nations have been burdened with debt, keeping them under the thumb of the richer countries. In those nations, the rich are controlling more of the pie as the middle class is wiped out.

We basically live in three worlds. There is the physical world which is made up of all that we can see. We have the real world which is all the things that are not physical but are an accepted part such as laws, corporations, and culture. And finally, we have the virtual world.


Over the last couple decades. many aspects of the virtual world became accepted as real since they are such a major part of our lives.

The challenge with the way the present system is the fact that the elites own most of the physical and real world assets. They control the natural resources such as land, food, and minerals. At the same time, their ownership of the financial system through corporations, bonds, and other assets means that very little is left for everyone else. Either we are looking at finite resources (as in the physical) or the fact that we are not able to participate (as in real world resources). This has evolved into the virtual worlds with the "ownership" of the Internet by a few companies.

Virtual economies are the answer to this. More specifically, decentralized virtual economies. They will provide the solution to income inequality and allow billions of people to change their financial state in a short period of time.

The key here is to create millions, and then billions, of virtual economies. We have a tendency to want to look at things through a centralized lens, meaning bigger is better. That is a dangerous step when dealing with a very powerful foe which the elites are.

Centralization allows for the few to control the many. This is rather obvious when we look at governments and our legal system. Unfortunately, it also bled over into our virtual worlds. Today, virtual economies are, for the most part, controlled.

One of the largest is Minecraft. This quickly becomes a very popular game and, over the years, amassed a user base into the hundreds of millions. However, this particular game is owned by MIcrosoft.

Governments are also looking to exert control over virtual economies. To start, they want their piece of the action by taxing what takes place. The government, true to its history, believes that everything falls under its control. Anything new is instantly theirs to profit from.

They also want to regulate things to "protect the people". I put this in quotes because this is really a bullcrap statement. Regulators excel at protecting incumbents and the status quo. They are there to protect those who finance their operations. Guess who tends to do that.


Thus, the only solution is to go far and wide. One of the major benefits to decentralization is the fact that it eliminates the single point of access. As more is developed, there are more options for individuals. If one aspect is taken down, there are others.

Cryptocurrency offers an incredible solution since anyone is able to create currency. The opportunities to transfer values using millions of different tokens is something that cannot be stressed enough. While all the focus is upon Bitcoin and its march to hundreds of thousands of dollars per coin, the real value is going to come from the millions of projects going unnoticed. That is where freedom lies.

Digital assets can provide enormous value, thus generating great wealth. It is a foundation for people looking at getting out of extreme poverty. This is also a tactic that will help to alter the breakdown of power.

As people accumulate more wealth through the growth of virtual economies, some of that money can be used to amass more in the physical and real worlds. This is why the bridge between them is vital. It is also the reason why the governments and other assorted entities are looking to keep them separate. Notice how in game tokens are meant to remain there. The ability to convert them into real world assets is dangerous.

Anything that is on the radar becomes a target. We know the present power brokers will do anything they can to remain in place. This is something that we learned all throughout history.

Therefore, stealth and rapid action is our ally. One of the biggest benefits to the virtual world is the pace at which is can expand. Presently, we are seeing many new projects come online each day. The cryptocurrency (digital asset) world is growing enormously. Even the fork of Steem which created Hive ended up producing more combined wealth than was present before. This is before we account for all the new projects.


Decentralized virtual economies give control back to individual communities. People who were hindered from benefiting under the existing system suddenly find themselves empowered through the freedom to excel. Anyone can enter a virtual economy and partake. There are no favorites upon entry. One simply needs to get involved in whatever the base premise is. Whether it is gaming, social media, trading, or investing, all are welcome regardless of where they are from.

On top of that, each is free to create whatever economy is seen fit. People can band together and develop something totally new. There is nothing that says one has to join something that already exists.

Innovation and creativity are key. Over time, we can see millions of developments coming from all corners of the globe. All will have monetary potential. Those that serve the needs of a certain amount of people will have value.

Economies are not created by governments or even corporations. It is individuals who are the ones who power them. This is a point that governments around the world (as well as central banks) forgot. They believe they can control them by passing regulation or manipulating the fiscal policy. In the end, we end up seeing how impotent these organizations truly are.

The near limitlessness of the virtual world means that we are able to see a massive explosion that can benefit the 7 trillion people on the planet. Basically, the two things that cannot take place in this realm are human reproduction and feeding ourselves (at least at this time). Outside of that, most everything else can be digitized and placed into the virtual economy.

We talk about the global economy in trillions of dollars. The potential of the virtual world can quickly take us into quadrillions. At present, about 35% of the world is still not on the Internet. We also see more than 5.5 billion who are not in the financial system since they do not have access to reliable banking services.

This creates a situation where most of the planet is omitted from being part of the global economy. If we could create trillions with only 20% of the population partaking, what can we see if all of humanity is involved?

We have the opportunity to create an entirely new system through the development of millions of virtual economies. The ability to monetize most any digital transaction is likely the basis for enormous wealth in the future.

By decentralizing in a grassroots fashion, we see the ability to empower all individuals to partake.

And this is something that scares the daylights out of those in power.

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This brings to my mind what happened with the first big virtual world more than a decade ago; SecondLife. I was an active user in the platform, you could see lots of business models popping up all over the platform, from the skins and 3d sculpting services, land rentals, stores, experiences, animations (in the form of dancing, walking or any other you may imagine), teaching and so on. Anyone could just join and start earning linden dollars with whatever they could provide which was valuable for any other user. The whole ecosystem was amazing, the only issue was centralization. Exchange to fiat was only provided by Linden Labs, the owner of the platform.

Now, as the crypto economy keeps evolving, similar services have appeared as Decentraland, which is also a virtual world with its ERC20 token. But many other ecosystems are poping as Hive, were tons of opportunities appearing every day, with the added value of decentralization.

Although there is still a technological barrier to reach mass adoption, it is clear that this world will be growing bigger and bigger over the years to come, making the "old" economy to blur with the new one.

It is fascinating to be living it and decide how you want to participate on it.

Second Life is a prime example of a virtual economy that exploded. The challenge with that one is two fold. To start, it is owned by an individual company meaning it is centralized to a degree. The second is even more important in the sense that there was not really a bridge between that economy and the real one. The currency used in the game, unless traded on a non sanctioned market, was not able to translate into real goods and services.

With what is being developed now around cryptocurrency, anything can be traded. For example, anything owned in decentraland can be traded for Ethereum.

It is very exciting to watch the evolution.

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I believe the key is that this coins are able to be traded on real life for services like having a haircut, food or accomodation. Once the system will be flexible to be a real form of trade acceptance in collaboration with an investment part is going to go wild

Without a doubt marketplaces are required. I believe that will be the next phase. Services will be based upon mass adoption since individuals have to be willing to accept it. However, the more technical professions such as developers will be the first to accept crypto.

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If you think of BTC, it is not viable due to its transaction speed and transferring cost. But it is very easy to do these trades in Hive.(or currencies like Hive)

You spend alts. You save in Bitcoin.

This will be just like the player 1 movie where everyone had an avatar and an alternative world existed.

Certainly the premise of that movie is not too far-fetched at this point, at least the VR aspect of things.

We will likely have many alternative worlds to choose from.

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I agree.

Always like reading your articles - very inspiring and I agree that the potential prosperity and wealth that can be created with deentralised computing/crypto is so awesome!

Thanks for the support @davidlionfish.

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Sometime I think if all transaction start happening in blockchain then how the "black" economy will thrive.
Most of the riches in economy are generated by exploitation and then this money is stored/stashed away from public sight.

Yes. That is the idea. To have the entire industry to spread out so far that most of the transactions are taking place out of sight. While widely successful games, as an example, will do a lot, they will be targets.

However, if there are millions of games like DCity, on many different blockchains, many different exchanges, then people have a lot of options to turn to.

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I think that two of the main aspects that most corroborate to help everyone are the factors "freedom" and "democracy".

It is a revolutionary financial market that gives everyone an opportunity.

It truly is revolutionary @wiseagent. The idea of everyone in the world having an opportunity instead of just a few elites is a game changer.

We have to push forward to make this become a reality.

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Digital economy is the only way for people to get some skin in the game in the real life econonomy. Acquiring goods, assets and other things which only a few would have the liquidity to do so. Just like you said, it can really shift the world. There is great potential in this.

really appreciate your great write ups. So how do we make people understand the potential of cryptos? To answer my question myself; I guess by a lot of means, e.g. by talking, by writing, by creating good projects and useful apps, by...

the hard part i think is to make all of these known to the average joe out there. We have in my opinion way too many different virtual economies but each has just a bunch of people active. Thus, slowly but steadily the majority of them starts to fade and the majority of people that adopted them will never look for another one, cause he believes that it's a waste of time etc etc.

So we need to make let's say hive economy well known to everyone out there in order to have the virtual economy and success we all desire!