William Quigley, the cofounder of Worldwide Asset eXchange (WAX), a blockchain and protocol token designed to make e-commerce transactions faster, easier, and safer, has been in the business of digital items for decades –– long before blockchain. Video game virtual items include things such as customizing your avatar, different types of virtual items that allow you to do more in a game, and so on.
Jonathn Yantis, WAX COO and Quigley’s long-time partner, invented the concept of trading virtual items for fiat back in the late 1990s. Quigley sat on the board of that company, IGE. “I learned a lot about the value of this stuff and why people need fiat onramps to trade, and they need a marketplace because somebody has to be the digital escrow agent and all that,” Quigley told me during World Crypto Con back in October in Las Vegas.
The two entered crypto after Yantis sold IGE, and, for a number of years, tried their hand at various trades, including tokenizing the U.S. Dollar. Quigley is co-founder of Tether, a stablecoin pegged to the U.S. Dollar.
They realized around 2016 that blockchains might be able to improve the trading of virtual items in video games. Ethereum had just launched. Quigley and Yantis had helped launch Mastercoin, an early attempt to create a platform for smart contracts.
“We thought, it’s going to be very hard for people to use the current state of blockchains,” said Quigley. “But, if proof of stake, which is a consensus mechanism, can evolve the way we were hoping, we’ll be able to allow a lot of people to trade virtual items cheaply and very quickly. Using a blockchain allows you to actually own the thing outright.”
Blockchain could transform the prevailing business model for video games in which video game items are property of the video game––not the player who purchases them. “You are licensing the game, you are licensing the items, you don’t own them, and yet people will pay thousands of dollars for…