What was originally just a depressing Twitter joke about the deteriorating state of Venezuela’s current regime has, like the crisis in Venezuela, become all too real.
A couple weeks ago a Venezuelan Twitter user, KalebPrime, pointed out that the exchange rate to USD for World of Warcraft (“WoW”) gold had eclipsed the black market rate for his nation’s official currency.
The economic system of World of Warcraft is a marvel. The game incorporates a free market where players can trade gold for in-game objects and tools, either with each other or with NPCs (non-player characters). The means with which one earns gold is however the root of a politically relevant problem.
WoW, the world’s most popular Massive Multiplayer Online Role Playing Game (MMORPG), is often the focus of addictive and costly play habits. When you buy World of Warcraft you aren’t buying the experience forever. No, you can only have have your WoW in fixes, and Blizzard is your only dealer.
Gold is earned in varying amounts from preforming actions in the game such as killing bots or completing quests. Pretty much every source of gold in WoW is infinite. A player can always go back and redo or retry any encounter or raid they please. That means there is an ever-increasing amount of gold entering the player markets. Unlike the US dollar, which has an inflation rate set by the Federal Reserve, WoW gold’s inflation is dictated by how much is earned by the in-game actions of all players on all servers.
WoW gold, unlike real gold, was always destined to be devalued by its demand. The more people playing WoW; the more the in-game markets would be flooded with it. That was well and good until human nature made the digital world all too real by monetizing playtime. Individuals inevitably started to slide into Blizzard’s racket.
Blizzard has, in the last two years, tried to curb the underground trade of gold for real world monies by allowing players to trade real money for their fake gold in the form of “WoW Tokens,” which can be bought or exchanged for extra time on the game. This mitigated the black market cyber-currency exchange of their game’s money but solidified it’s demand and price in the open market. Recently, Blizzard has allowed players to exchange WoW Tokens not only for WoW items, but for items in many select Blizzard titles, further entrenching the real-world value of their e-currency.
Americans seem to be able to understand, or at least tolerate, the rate of government enforced inflation(theft) upon our own currency, but the slide of Venezuela’s money into a worthless abyss is startling. The Venezuelan Bolíva is down from an official rate of almost 100 to 1 USD, to 12,000 per USD on the black market according to Fortune, within a matter of months.
For reference, World of Warcraft gold, in all of its infinitely mine and grind-able glory can be bought through Tokens or on the black market for around 6,000-8,000 gold per USD, sometimes making something that is ceaselessly devaluable twice as valuable as real Venezuelan money.
There is a magic line of revolution, ironically called the “bread line” by some, where bread becomes so costly that it is no longer feasibly purchasable and a nation’s government and currency break down. I like to imagine it to reside around the time where carrying the money to buy a loaf becomes more cumbersome than the bread itself. This has been the downfall of many past command economies and is the way socialist nations inevitably fail.
There is a civil war coming in Venezuela. The Socialists that democratically gained power with Chavez will lose it under Maduro, even as him and his regime try to undermine the democratic systems that carried them into rule. The situation develops daily as Maduro attempts to appoint legislators, ration food to his supporters, amend the constitution, and fudge voting results. Opposition leaders have faced imprisonment and kidnapping. Daily protests are becoming riots while protester casualties soar into the hundreds.
No one can say for sure what will occur in Venezuela over the next few days but you can be sure this story will continue to develop. You can be certain that when it does we here at Liberty Viral will keep you updated.
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