1)Security issues
Security and privacy issues may arise in virtual world especially on Payment Card Industry Data Security Standard as users need to provide their personal information while making payment for virtual currency transactions (Hansen & LLP, 2010). Hackers are able to access user personal information by using cheating program and viruses, especially on users who use credit card to perform online transactions. For example, hackers might gain the bank account number by hacking into user personal information. In addition, by assessing into user ID and password, hacker can gain profit from stealing the virtual properties of gamers and selling them to third parties at higher price. This will cause users to feel unsecure while performing online transactions.
2) Fraud
In 2009, there is a decrease of 1.9% in the total revenue of virtual goods traders caused by fraud according to a research from CyberSource Corp (Worthen 2010). It is hard to believe that these online criminals are interested in acquiring virtual goods in online game but it will be another story when online criminals are able to convert the virtual goods into real cash and it is easier for stealing virtual goods in game than in real life. As a result, virtual worlds had turned into a place where online criminals steal information; launder money, increase profit by selling virtual goods for cash and others. In addition, fraud will also increase the amount of scammers in virtual world who have the ability to acquire confidential and personal information of users (Mills 2008). Some of the methods that used by scammers in stealing private information are message spamming, phishing, viruses such as Trojan which used to trace passwords, ID and others.
3) Technical Challenges
The service providers of virtual currency will encounter with different challenges in this modern era where users are more concern with the security and privacy problem. In order to protect the safety of users, service providers need to improve the security layer of all transactions by establishing a web-based confirmation, firewall system, server-side script, identity authentication mechanisms and others. These methods are important in ensuring the protection on users as service providers will need to take all the responsibility if users encounter with fraudulent or security issues due to the incompleteness security system. Besides that, service providers should take time to understand the current virtual currency program in order to choose the most suitable privacy policies to be applied on.
References:
Hansen, JD & LLP, PC 2010, Virtual Currencies: Real Legal Issues for Retailers, RetailingToday.com, viewed 4 October 2010, http://www.retailingtoday.com/(S(ac2eydfbp0e0knyy0zaqrr45))/editorial.aspx?id=132107
Korolov 2010, Does your grid needs its own currency?, Hypergrid Business, viewed 3 October 2010, http://www.hypergridbusiness.com/2010/08/does-your-grid-need-its-own-currency/
Mills, E 2008, Rising fraud threats in virtual worlds, cnet news, viewed 4 October 2010, http://news.cnet.com/8301-1009_3-10027609-83.html
Worthen, B 2010, Fraudsters Like Virtual Goods, THE WALL STREET JOURNAL, viewed 4 October 2010, http://online.wsj.com/article/SB10001424052748704723604575379333744203498.html
Hi Chyn and Theresa,
ReplyDeleteI am agreed that the disadvantages that has provided by both of you. Obviously, nowadays people like to purchase virtual goods with the virtual currency in order to fulfill their satisfactions, improve character competency, improve performance /wining, to gain exclusivity and so on.
Nowadays, banks provide various services that allow customers to make their payments, such as debit cards and online bill payments enable customers to immediately transfer funds from a personal account to a business account without handling physical money; it is convenient for those who want to purchase goods via online.
Virtual currency has become popular because it allows people to buy items and accessories they use especially for online games such as Facebook Games. Moreover, virtual currencies also enable customers to watch feature length movies on particular websites and to download music.
I think that the most important disadvantage would be fraud, which could lead to hacking, illegal repossession of banking records, and identity theft. As a result, fraud and exposure of personal information problem must be solve as this will discourage people from purchasing virtual currency which will decrease the profit of the company.
Hello Chyn and Theresa,
ReplyDeleteIn my opinion, i think that the main disadvantage of virtual currency would be it's very hard to determine and measure the "real value" of money in virtual and reality world.Some virtual currency can be earned through playing games and the currencies earned can be exchange with real world properties. For example, playing certain games for 100 hours can earned you certain amount of virtual money which can be used for exchanging a real world goods, a computer which cost RM2000.For real world money, RM2000 would be someone's a month salary which far exceed the 100 hours. When this happen, the "real value" of a RM2000 is already hard to be determined.It is like why should i work hard for a month to get something which can be earned for only 100 hours of playing games.
Mike has an interesting point here. Too bad it is not followed up upon.
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