How Blockchain Can Solve Problems in Exchanging Virtual Goods

There are a number of major problems in the market for virtual goods that need to be solved. With centralized virtual goods exchanges, it’s extremely expensive to set up a virtual asset exchange, requiring millions of dollars in software capital expenditure, so most parties never have the opportunity to set one up. Second, there is no “safety net” for virtual goods transactions on a centralized exchange, and it is the duty of a third party intermediary to ensure that fraud does not occur in transactions. Additionally, there is a “store of value” problem in virtual goods markets, in the sense that when a gamer purchases a virtual good, the virtual good is often trapped within a game itself, unable to be immediately and seamlessly exchanged for real money.

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