For some time now I’ve been making an unassailable and unchallenged argument that Bitcoin and Bitcoin services are no different to the monies and services found in video games. Now, thanks to my favourite gamer, we have one of the best examples yet of “Bitcoin Doublethink”, second only to the very cute Pigsby which uses a “Blockchain” for its database.

I’m talking about Warframe.

Warframe Market is no different to any Bitcoin exchange. It has no legal relationship with the game maker, and simply organises and connects the users of the game into a viable market.

Warframe Market is a website where people can post bids and asks for items in the popular game Warframe, which has almost 50 million registered players. Warframe Market is updated in real time, with new orders coming in at the top, pushing previous orders down.

The order book for Warframe Market, with a different GUI arrangement but identical function to a Bitcoin exchange.

This is identical to the function of Bitcoin exchanges, and is global in reach.

The Warframe Market service is not authorised by Warframe; it is an entirely separate entity, just as Bitcoin exchanges are not authorised by Bitcoin, and are totally independent and separate from each other and Bitcoin, which is an opt in, peer to peer messaging platform owned by no one.

Clicking on either “Want to Sell” or “Want to Buy” opens a link:

users paste these links into Warframe, and the link sends a direct message to the poster of the message so the two users of the game can meet and make the trade “in person” inside the game-space. This is identical to Local Bitcoins, where people post orders and then arrange to meet in “the real world” (meat-space):

The knee-jerk objection that will be immediately be raised by the “Bitcoin is Money and must be regulated” advocates is that you can’t exchange fiat for Warframe’s “Platinum” money. Sadly for them, this is not true. Warframe sells its “Platinum” currency on its website that you must buy with fiat.

Bear in mind that the prices for items in Warframe are set by the users, so you can send an arbitrary amount of Platinum to another user. This means you are able to pay for anything with Platinum, by meat space arrangement.

Once again, the Pavlovian objection to this is to assert that “Warframe doesn’t use Blockchain”, but this objection is easily dismissed because the function of Warframe’s money, whether provided by a clone of Bitcoin or a Berkley DB, PostgreSQL, or MySQL database is irrelevant. What the user experiences is a money simulation; how that simulation is performed is immaterial to the nature of the primary function of simulated monetary exchange.

Claiming a Blockchain changes the nature of a math calculation would be like claiming eggs fried in a frying pan over a gas fire are different to eggs cooked on an electric stove or a camp fire. Bitcoin and Bitcoin clones are nothing more than databases used to keep records. They do not magically create a new form of something; they are novel database arrangements used to keep records, nothing more.

The only thing missing from the Warframe Market example is a real-time chart showing the price for each Warframe item across many users who want to buy and sell. By the logic of the “Bitcoin is money” crowd, this would make “Platinum” even more like money, and would immediately require the urgent attention of the Securities and Exchange Commission, FinCEN and the IRS at a minimum.

Bear in mind also, that no user of Warframe or the separate entity Warframe Market are required to KYC/AML, keep records or accounts, pay taxes on profits made in Platinum or anything else some jurisdictions demand of Bitcoin users and users of Bitcoin exchanges. No one has a logical answer as to why this is so.

The next predictable argument to be mounted is that the Warframe Market market is “small”, and “not worthy of attention”. The Warframe Market market is very large in fact, with 11,500 concurrent users trading Warframe items in real time. There is a lot of money trading hands on Warframe; why is this activity not regulated, and why don’t advocates for Bitcoin regulation call for the regulation of Warframe and other MMORPGs? People have been prosecuted for amounts as small as $30,000 in Bitcoin, and operators arranging contacts between users gaoled for life; surely the operators of this website are in violation?

There is no difference between a score in a game held in a MySQL database and a score held on “a Blockchain”, which is nothing more than another style of database. But it gets much better…

Now we have an example of a game that explicitly uses a Blockchain to keep score in the form of Pigzbe; “A pocket money app that helps kids age 6+ become the money maestros of tomorrow”. This is very problematic, as I’m sure you’ve instantly detected.

Has Pigzbe applied for a BitLicense for it to offer it’s product in New York, or is New York geoblocked, it’s token originating in Switzerland? It is based on Blockchain, so will it apply for a BitLicense, and if it has a reason other than geoblocking why not, what is that reason? Is Pigzbe KYC/AMLing the children who are using this “game” or the Mothers and Fathers of those children? In the USA you must be, “18 years or older to open an account in your name only. Minors cannot own an account in their name alone. You must be at least 14 years old to open a checking account. Legal guardian co-owner is required for those between 14 and 18 years”.

Pigzbe is available for children from the age of 6 years old and up. Outrageous.

Will the SEC/FinCEN investigate and forbid this application entirely until they’ve applied, and will they ban it because, “Children can’t be qualified investors allowed access to financial tools unsupervised”?

Will the…

Consumer Financial Protection Bureau (CFPB)
Federal Deposit Insurance Corporation (FDIC)
Federal Financial Institutions Examination Council (FFIEC)
Federal Reserve (FRB)
Federal Trade Commission (FTC)
Internal Revenue Service (IRS)
Office of the Comptroller of the Currency (OCC)
Securities and Exchange Commission (SEC)

or any of the the other agencies claiming Ultra Vires to control databases attempt to capture and supervise Pigzbe?

No one has satisfactory answers to any of these questions.

And remember; this Pigzbe app is no different to Bitcoin; it is a self contained ecosystem where the Pigzbe “tokens” only have meaning and utility inside the service, just like Bitcoin only has meaning inside the block chain of its records. These are the plain statements of fact that you can’t ignore if you want to be entirely truthful and logical.

And Pigzbe’s tokens are not available on exchanges…yet…and if they forbid their tokens from being listed, there is nothing to stop an independent Warframe Market style operation from springing up connecting Pigzbe users to each other the same way that Local Bitcoins does outside the Pigzbe app.

No argument for control of Pigzbe would be complete without asserting that terrorists could use Pigzbe to keep accounts and move money around undetected. Why are Pigzbe, Rainbow Six Siege, and Warframe not taken seriously as threats to national security whereas Bitcoin is, and Bitcoin is smaller than Warframe and Rainbow Six and other similar simulations?

Identical to Pigzbe and Warframe, Rainbow Six Siege has its own in-game money called “Renown”. Rainbow Six has 1.1 billion in bookings and 45 million players, all of whom are using the in game money Renown as money.

Renown is identical to Bitcoin; it is an in-game money that only has a context in “Rainbow Six Siege”.

If the EU / USA makes a regulatory exemption for Pigzbe and Rainbow Six Seige and all video games, then they will be forced to explain their “thinking” in court unless Bitcoin services are bundled along with them. If they don’t accept the truth, and try to argue Bitcoin is different, they will lose any properly mounted legal challenge. “Renown” the money in R6S is indistinguishable from any score or in-game money or Bitcoin.

There is historical precedent for large, thriving in game monies being totally unregulated; none of this should come as a surprise to anyone with an interest in Bitcoin.

As I explain thoroughly, and once again, unarguably, there is no logical reason to treat Bitcoin any differently to any other database where a score is kept, and certainly in the United States of America, where there is a written Constitution and guaranteed rights, Bitcoin regulation is un-Constitutional and inexcusable.

When you play an arcade basketball hoop game and you get tickets that are redeemable for prizes, why isn't the arcade owner required to KYC/AML you? The tickets are being used as money redeemable for goods.

If, instead of printing tickets, the game sent a token to your Hoops app, that was redeemable for goods, would that suddenly by magic turn the process into a money process? Of course not. This is the insanity that we’re hearing from the people who wrongly assert that “Blockchains” are money.

And a Hoops app would be very useful. You could take your Hoops app to any arcade and use HoopCoins to buy soda and popcorn and play games, as well as win rewards directly in the app. Arcades would save money by not having to handle money and all sorts of other advantages, like selling advertisements and inducements to fun lovers. And Hoops users could send Hoops to each other to play games in any other context.

All arcade owners could run a copy of the Hoops Client, and share the administrative burden of managing the HoopsCoins. It makes perfect sense on every level. And all of this does not require HoopsCoin to be classified as money to get all the efficiencies and marketing opportunities.

Finally let’s look at Supermarket Coupons. About two billion supermarket coupons were redeemed in 2016, with the total value of coupons issued a whopping $406 billion, saving shoppers $3.6 billion. None of these coupons required the users to identify themselves; they simply presented them either at the checkout or online with a redeemable code, and traded them in for goods at a discount as a form money.

The market for redeemable coupons is much larger than Bitcoin. None of the issuers of these redeemable tokens are required to register with the SEC or FinCEN nor keep track of which of their customers are using what token. They simply publish them and reap the benefits. There is no record of what company is using which sort of database to keep track of which coupon has been redeemed, and each coupon is unique, with a randomly generated serial number, just like Bitcoin.

The Dcode plugin for Shopify. Totally Unregulated money creation out of the box.

Every time you use a discount code on a website, you’re engaging in this same process; someone has issued you a redeemable code that you enter at the bottom of the shopping cart to receive “value”. These tokens are generated by the shopping cart software, can be sent anywhere and redeemed by anyone, and the services owners in fact encourage this to help them sell. None of this activity is regulated in any way.

Supermarket Coupons are such a huge market there are specialised tools for removing them from magazine pages…

The facts of this speak for themselves, and have nothing to do with the utility of Bitcoin or any database. Bitcoin cannot be treated differently to other databases, and should not be subject to a special legal regime. It doesn’t matter how well meaning the advocates for Bitcoin regulation are; what they’re doing is wrong, damaging, borne of ignorance and unethical.

If the advocates for Bitcoin regulation were to try their paternalistic, nanny-state, toxic nonsense on the gaming community of billions of users or supermarket owners or Apple, they would experience a push back that would flatten them flatter than a pancake. It’s only because the Bitcoin community is small, highly intellectual and polite that they’ve managed to get away with the threadbare, defective arguments and unarguable damage they’ve done so far.

There will be a court challenge on this matter, and so far, the US courts have overwhelmingly favoured this correct argument wherever the rights of American citizens are asserted using the Constitution as the argument:

Bitcoin is speech stored in a database, nothing more.

Video game scores, Pay as You Go top-ups, Supermarket Coupons and in game currency examples going back decades will be a key element in the winning argument to kill the idea that Bitcoin requires special treatment in law. The people asserting that Bitcoin should be subject to regulation but Renown, Supermarket Coupons, Warframe’s “Platinum” and iTunes Gift Cards are wrong, they will be proven wrong and their arguments made unenforceable.

Once this happens, then Bitcoin will have a clear run to exceed all of these markets and more, opening the way to many opportunities on a global scale, far bigger than any video game or the entire video game market, for fortunes in the billions to be made, and a total re-ordering of how money works both off and online.