I am Starting an In Game Digital Currency Fund as an Experiment

I had an idea the other day that I think I am going to pursue as a type of experiment to prove the value of in game currency. The game I decided to choose is runescape just because it offers a widely open market that I have experience with in the past and there is also a robust secondary market for gold sellers. This way I can easily track the value of the fund and compare the profit or loss week after week.

Essentially what I want to do to prove the value of runescape in game currency is to invest it in an array of different items in the game and track the market prices. I will be starting with a large amount of gold to begin with, I haven’t decided how much, most likely one billion, which will be used to purchase a basket of goods and speculate the price. I will also be trying to corner some markets and push the value of the items I have up. I want to make sure I have an exposure to a lot of goods in order to keep liquidity a priority.

The amount of gold I have will have a value tracked to the gold selling value at playerauctions.com, which is a gold seller website that specializes in regular people, not companies. Most people think that in game gold is worthless and I want to prove it is not. The goal is to make returns that outpace the in game inflation which can be a huge issue over time. The amount of gold I have isn’t a good metric because in game inflation means over a period of time I might lose the purchasing power of that gold.

The game goes through periods of time with deflation and inflation, usually because they have periods where they do massive crackdown on players that are botting the game. In periods where there aren’t a massive amount of items that can sell for gold coming to market, you start to see items rise in value. In times where bots are everywhere you will see that prices of goods shrink dramatically.

For the vast majority of the money I have, I will just be buying and speculating on items, but for a small part I will do basic trading and market buyouts. It really just depends on how much time I have or want to put into the project. I will already have to read about items and updates on the forums to see if certain items will most likely drop or raise in value in the future and speculate accordingly

My ultimate goal is to prove that even the currency of a game that people play for fun and most people don’t look at as a financial product, can be turned into one. The basic point of economics is that anything has a value as long as someone else is willing to pay for it and that is what I will prove. I am not going to release what items I purchase until the experiment is complete, because the market is global and doing so could affect prices. However, I will be keeping a log and making sure to copy everything down. I will report back in a month on the updates and see if I have been successful at all.