Virtual currencies : Real opportunities?
AbstractThe European Central Bank defines virtual currencies as ”unregulated, digital money, which is issued and usuallycontrolled by its developers, and used and accepted among the members of a specific virtual community.”(European Central Bank, 2012, p. 5) The interest in virtual currencies has increased immensely over the last fewyears as they become increasingly prevalent in our society across many different industries. Up until now, the field ofvirtual currencies has been mainly uncharted land and despite interest in specific currencies, few attempts havebeen made at understanding or structuring the entire landscapeThe main research question in this thesis is related to the previously mentioned dilemma: understanding andstructuring the virtual currency ecosystem, today and in the future. How can the virtual currency landscape currentlybe analyzed in a structured manner and what framework can be used to reflect and make predictions on the futuredevelopment?The thesis is based on four different sources of information: a literature study of existing material, corporateinterviews with companies dealing with virtual currencies and consumer interviews with potential early adopters, anonline survey and a case study performed at Ericsson M-Commerce. The case study of Ericsson M-Commerce hasprovided valuable insight into understanding how companies reason when considering adopting virtual currenciesinto their product portfolio and greatly helped the process of structuring the virtual currency market in acomprehensive manner. In return, the thesis has also provided decision material for the department concerningvirtual currencies.This thesis divides virtual currencies into five groups: Prepaid Value, Loyalty Points, Monetization Currencies, GamingCurrencies and Value Encoded Currencies. This model has been developed as a framework for the analysis of thecurrent situation in this thesis. However, the analysis in the thesis has shown that as virtual currencies evolve, it willprobably become more relevant to instead consider their functions. It is likely that virtual currencies will consolidateinto three distinct functional types: virtual currency as a unit of account, virtual currency as a business model formonetization, and virtual currencies as a product that can be sold.As virtual currencies evolve, the future is not only filled with many challenges, but also many new opportunities. Inthis thesis, an attempt to gain an abstract understanding of how the field is developing has been made, but it remains to be seen what the real impacts of virtual currencies will be as they continue to gain traction.
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