Wagner James Au / New World Notes

IMVU just announced the availability of VCOIN, an Ethereum-based digital currency for use in its virtual world with 7 million active users  — and, by design, for buying and selling goods and services in the real world, too. From the announcement:

Available now for the IMVU desktop, mobile web, and web platforms, VCOIN is seamlessly integrated into the IMVU experience, enabling secure, global peer-to-peer transactions at the click of a button. IMVU’s high-velocity economy currently sees more than 27 million transactions and 13 billion Credits changing hands each month. With the addition of VCOIN, users can now easily and instantly pay for goods and services on the platform — no complicated crypto wallets, or even bank accounts required — and then convert their earned VCOIN into cash at an established rate.

This is a major move for at least a couple reasons: While blockchain-based currencies have attracted much hype and speculation, they are not actually used very much to, you know, buy goods and services. (As I never tire of noting, more people use Linden Dollars in Second Life than use Bitcoin every day.) At the same time, while there are other virtual worlds with a cash-out option for virtual currency, they also have small user bases — and aren't authorized for use in the real world. While Linden Dollars outstrip Bitcoin in usage, for instance, they still only count some 400,000 daily users, and aren't intended for use as a RL currency.

Enter VCOIN, which hits the market with 7 million built-in customers. John Burris, IMVU's Chief Strategy Officer, tells me the company fully intends to encourage VCOIN's use outside IMVU — and even approached the SEC with that in mind:

"The whole idea of the SEC no action letter [PDF link here] is the first transferable currency that can be taken off of the platform," as Burris puts it. "So we very much see it has the potential to be used to compensate other users off-platform, converted to a debit card for real purchases or any other value that digital currencies enjoy."

Ultimately, he adds, "We want to be one of the largest cryptos in the social gaming space in the next year – 18 months."

The first challenge is getting IMVU users to start buying VCOIN, and integrate them alongside IMVU's existing virtual currency of Credits. Those, he explains, "will live alongside VCOIN. Many users have credits and the virtual marketplace is currently all priced in credits. The advantage to VCOIN is that it can be taken off the platform and turned to real value." 

As to growing VCOIN's customer base on IMVU, here's Burris' three point plan:

"1) We have overhauled the product to improve the current gifting flow to make it super simple and easy to gift VCOIN, credits and other gifts. Our users are very accustomed to gifting credits and now VCOIN will be front and center in that mix as well.

2) We have marketing planned to drive awareness and adoption of VCOIN on the IMVU platform — starting with the creation of a Beta group of influencers that provided feedback and will be some of the first to receive VCOIN to gift out on the platform. You will also see special promotions and offers targeted at the purchase of VCOIN.

3) We have created a special internal place where Producers can post and offer services to generate awareness around VCOIN and 'why' to use it. This 'service marketplace' will be very important and you will see it grow over time."

More about it here. And expect to hear more about VCOIN soon. To take just one example: Live events in IMVU are already very popular, with performers earning tips in Credits. With VCOIN now giving them an option to turn tips into real cash, we should start seeing more and more quarantined comedians and musicians moving their show to IMVU.