The first part of this conceptual explanation is devoted to describing the socio-economic rationale of the gamified investment platform we are going to create. In order to refresh the objectives of this project in the memory of our readers, we would like to list several key provisions of our concept such as:
- once software was the factor which has transformed an industrial economy into a post-industrial one, the future extractive industry should go in line with the digital transformation allowing to combine a real sector with a virtual environment quite organically;
- being one of the most progressive technologies of the post-industrial era, Blockchain lacks a clear link with a real-sector economy. The purely virtual nature of the majority of the existing cryptocurrencies leaves only one economic niche for them — crypto exchange speculations;
- even though the humanity hasn’t reached the critical depletion of the continental mineral resources yet, such growing trends as a rare-metal shortage in the skyrocketing battery industry hint at the sorrowful consequences the emerging post-oil economy can shortly face;
- the intentionally constrained development of a seabed mining industry faces numerous artificial limits in the form of speculatively pumped prices on rare metals as well as on the stock of the transnational mining corporations that occupied almost all continental deposits of cobalt, nickel, and copper throughout the world;
- the actual fusion of the progressive eco-friendly seabed mining and the huge mass of singular crypto investors is possible only through a special hybrid software solution capable of providing a transition of micro-investments into the seabed mineral extractive industry;
- a micro-investment platform in the form of a quest-like multi-user computer game can couple a worldwide community of singular investors with the actually working deepsea miners through a flexible crypto layer serving as an intermediary between a virtual economy and a seabed extractive industry.
The gameplay of our platform was described in details (rather more than less) in the previous post. However, we admit that the final version of the game scenario can be developed only in cooperation with a professional game developer whom we are looking for, by the way.
The internal crypto assets of the platform were also described in Part I. The third layer of our platform in the form of an investment interface remains to be explained hereinafter. And it is probably the most difficult task to represent all possible relationships between all involved entities in the game showing the advantages of our approach at the same time.
The nascent seabed mining sector
First please recollect one of the objectives we always keep in mind — the development of a real-sector seabed mining. This sector includes only a handful of organizations today. We can call the International Seabed Authority as the core entity around which all the other organizations and companies are bouncing. The companies that conduct the actual activity in seabed mining today can be counted on the figures of one hand. Krypton Ocean Group is one of them. In order not to confront the business goals of those companies, we leave it for our readers to detect such seabed miners on the internet. The extent of engagement of each company in the actual seabed mining varies from case to case. Rumors suggest, for example, that even Lockheed Martin is also engaged in the development of seabed mining technologies.
Joint efforts matter
We should invite the major players of the seabed mining sector to join our platform on the rights of competitors in a good way. The wider diversity of technologies and organizations our game can represent, the more exciting adventures the gamers can experience. Besides, it seems in the interest of every company involved in seabed mining and exploration to be a part of our platform — the lack of a worldwide recognition is still the biggest problem each seabed miner faces now. Once we are going to make our game as close to a real mining as possible, the participation of our competitors (not competitors in fact, but rather partners and like-minded fellows) in our project can broaden the gamer choice with regard to possible game missions and mining technologies.
Everything in our game should run like in real life: a gamer should have a possibility to choose one of our competitors as an employer to mine gold-bearing crusts near the African coast, for example. That’s why we are accounting on a mutual interest of our partners/competitors since our project is aimed at monopolizing the seabed mining discourse under no circumstances! We represent our gamified platform as a “cosa nostra” in the sense of a shared endeavor.
The platform parties
Let’s assume how to arrange a clear link between the gamers and seabed miners through our platform.
Since a crypto layer is chosen to be an intermediary medium between a virtual gameplay and a real extractive industry, it is necessary to grasp the transformations happening with both virtual and real assets in the process of our platform’s functioning. But first, the very mechanics of the relationships between all parties in the game should be explained.
The entire workflow of our platform involves the following three main parties:
- gamers or users of our platform who can play different roles in accordance with a particular mode of participation they select when signup to the platform. Each user can choose between such roles as a gamer-as-a-gamer, a gamer-as-an-investor, and an investor-as-an-investor;
- the platform as the enterprise which offers a set of services such as playing an online interactive game, mining cryptocurrencies in a pool, investing the real-sector mining industry, as well as executing various exchanging activities with both virtual and real assets through exchanges;
- one or more seabed mining companies whose business development is continuously supported with micro-investments from the platform users. Conducting the actual metal mining on the ocean floor, the mining companies supply a global market with rare metals. A certain part of the mined metals is reserved for the platform users who can exchange their virtual and real assets for the metal through the platform exchange;
Understanding the assets
The multiple flows of assets from one party of the platform to another can be specified after the gameplay is finally designed. However, the basic types of the asset flows can be represented as follows:
In order to make it easier to understand the whole process of the asset movement within the platform, let’s create a typical story of an average gamer where the main capabilities of the platform are revealed step by step.
Introducing John — a “gamer-as-an-investor”
Imagine an average gamer who used to spending a couple of hours a day playing computer games. Let’s call him John since it so happens that guys constitute the biggest part of the gamer community. John plays games to have fun but this time he is proposed to participate in an investment activity at the same time. Since John is familiar quite well with the main principles of crypto economy, he decided to signup to our platform as a “gamer-as-an-investor” when a part of his computer’s processing power should be shared with the platform for a pool mining of ETH.
How John started playing
John paid a small signup fee for accessing the whole functionality of the platform. By the way, as an experienced cryptocurrency holder, John paid the fee with BTC since a dozen of the top-rated cryptocoins were specified as the acceptable currencies for payments within the platform. It took him 10 minutes to create his personal profile on the platform and log in the game. His computer starts sharing its processing power with the other gamers-as-investors available at that moment online to mine ETH in favor of the platform. But more on that later.
John selected one of the “employers” — a virtual mining company which offered him the most attractive terms and conditions of a Labor Contract in comparison with the other employers. So, John received a basic deepwater vehicle for rent, a license for “cobalt” mining along with a map of the seabed area where he would be authorized to mine nodules, and a possibility to communicate with the other employees of the same company via a messenger-like interface.
John and options
After searching the available paid options in the game, John decided to buy more powerful propulsion for his vehicle that let him play as a Poacher — the miner who can grab nodules from both the disputed territories and the other companies’ areas. It is illegal and John can be penalized if someone catches his vehicle at those territories unless John escapes earlier than Hunters from a different employer can reach him. That’s why a more speedy engine is crucial for a Poacher. Buying this option John could invest his personal funds into the platform in exchange for better opportunities within the game.
Before buying the more powerful engine from his employer, John decided to figure out what advantages that purchase could bring him. Everything in the game is evaluated through the internal crypto coin KPTN. The commercial result of the gamers’ activity is specified in the amount of the virtual metals they could mine. And the price of each kilogram of a virtual metal depends on the details of each player’s personal profile. Hence, the same metal can be exchanged for KPTN with a different exchange rate depending on the internal status of every particular gamer.
For example, 1 kilo of a virtual cobalt is changed for 45 KPTN when this metal is mined by a newcomer having a zero in-game status i.e. by a “gamer-as-a-gamer” who has no options paid. At the same time, 1 kilo of cobalt mined by a “gamer-as-an-investor” is changed for 900 KPTN. In case of our John, his cobalt can cost 1 350 KPTN/kg when he buys a more powerful engine for his vehicle. In addition, the new engine allows him to mine nodules 20% faster than the other ordinary miners do it. So, having the better engine John could mine a bigger amount of metal within the same time. But the engine costs 450 000 KPTN that is equal to about 350 kgs of cobalt. Besides, in order to buy the engine, John has to exchange his own money (fiat or crypto) for KPTN through an internal exchange. Of course, the transaction is to be charged with the platform’s fee equal to 0.1% of the sum.
The mission of KPTN
Note: the price for metals will be fixed in KPTN, but the value of KPTN will be variable. What can influence the value? First of all, the network effect when the growing number of crypto holders increases the value of a cryptocoin. Another important factor of the continuously growing value of KPTN is the real-sector background of this coin backed by real metals. The one who familiar with the trends in a crypto economy knows how tired is a world crypto community of the numerous scam projects having nothing in them except some bubble-type purely hypothetical promises.
In contrast to them, KPTN will have various sources of “recharging” its value such as real rare-earth metals whose price keeps growing in the light of the so-called “battery crisis” — one wind farm alone needs about 2000 kg of rare metals while the onshore deposits of cobalt, for example, are too limited to satisfy the electric-driven economy demands (we have specified the problem in Part I).
Another “multiplier” of the KPTN value will be ETH cryptocurrency mined through the pool mining feature of the platform.
Yet another factor which can hold the value of KPTN will be the internal business opportunities every gamer can obtain within the game when numerous commercial interactions between the gamers add value to the platform as to a flexible marketplace and, therefore, indirectly increase the value of KPTN pumped with both fiat and crypto from the gamers. In order to explain the last provision we have to come back to our John again.
The internal leasing service
The advantages brought by the new engine were obvious to John, but the price was not affordable for him at that moment. And John decided to lease the engine from one of the rich gamers from the Pool which John was going to join as a Poacher. A leasing service within a pool is a kind of the internal business everyone can do if a gamer owns something valuable to be offered to the other gamers in a lease.
For example, a rich gamer offered John the engine in a long-term lease for only 7 KPTN/hour. A good deal, since John can become a Poacher and mine bigger amount of cobalt thanks to the new engine. Besides, John should not worry about the hourly payment because the transactions can be conducted automatically through a smart contract when the peer-to-peer transactions are provided by the platform. He just needs to have a sufficient amount of KPTN on his personal account.
How assets flow
Let’s interrupt the story for a while to realize the movement of assets available within the platform.
- from John to the platform as a signup fee along with the fees for the exchange transactions when an external cryptocurrency (BTC) is exchanged for KPTN;
- from the platform to an external crypto exchange to transform the ETH received as a reward for adding new blocks to the Ethereum blockchain by the pool crypto mining feature into fiat for further funding a real-sector seabed metal mining;
- from the platform to an external exchange to exchange BTC received from John for KPTN circulating outside the platform;
- from John to the platform to be able to play as a “gamer-as-an-investor” who sells metals for a much higher price than “gamers-as-gamers” do;
- from John to the rich gamer who offered John a better engine in a lease;
- from the platform to John in exchange for his cryptocurrency;
- from an external crypto exchange to the platform in exchange for BTC and ETH appeared in the platform due to both the signup fees charged to John and the pool crypto mining;
- from the gamers to the platform as the fees for every transaction conducted within the platform;
- from the platform to an actually working seabed mining company as a micro-investment into the development of the seabed mining business;
- from an external exchange to the platform in exchange for both KPTN and the other cryptocurrencies;
- from gamers to the platform in exchange for KPTN;
- from an actually working seabed mining company to the platform through an external metal exchange;
- from the platform to the gamers in exchange for virtual metals and KPTN;
- from the gamers to the other gamers in exchange for some services available within the pools;
- from gamers to the platform in exchange for KPTN;
- from the platform to the gamers in exchange for virtual metals and KPTN
- from the gamers to the other gamers as a lease service in exchange for virtual metals and KPTN.
Hence, we can see that even a basic architecture implies quite multiple channels of the asset movement.
The other game modes
It should also be noted that the other two playing modes (“gamer-as-a-gamer” and “investor-as-an-investor”) will have their specific types of the asset movement between the platform and the gamers. For example, the users who choose the “investor-as-an-investor” mode will be able not to play the game at all — there will be a set of special options for such users allowing them to conduct an investment activity through the platform without being involved in the game.
It makes sense when a “non-gamer” person has some capital to be invested in a seabed mining business with no need to buy stocks of the mining companies. Such a mode will represent an opportunity to become an anonymous investor whose interactions with the actual mining business are executed through a cryptographically protected interface capable of turning crypto (or fiat) into metals and vice versa.
In addition, such a mode will offer the income-generating opportunities to those crypto miners whose special crypto-mining hardware becomes less beneficial due to the constantly growing hash rate needed for adding new blocks to one or another blockchain and, therefore, being rewarded for mining.
Now it’s time to realize the motivation of all involved parties. But first, let’s take a look at a general scheme of profits each party of the platform can account on.
So, why the potential users of the platform should be interested in playing the game?
- Fun. People play computer games to have fun first of all. Our “Seabed Mining Race” is no exception. In addition to fun, a certain psychotherapeutic effect is available in many computer games. Just look at the leading console shooters of AAA grade — they represent the extremely realistic virtual environments with quite an aggressive content where a gamer can experience some kind of catharsis through relieving negative emotions towards “enemies” and monsters. Such a socially valuable mission of computer games should not be underestimated. Our game, on the other hand, will represent a very close-to-original imitation of quite a brutal real-sector mining where the gamers will be able to participate in the deepwater adventures when overcoming obstacles and reinforcing their business they will grow up their status in the eyes of their playmates;
- Trading. Even though many people realize how lucrative can be stock-&-crypto trading, they keep standing far from this activity due to a lack of knowledge and experience. In an ordinary situation, any singular trader has to face the broad environment of stocks, commodities and exchanges tet-a-tet. The rules and principles of the professional trading remain too complicated for the common people who have to rely on just their own intuition along with a highly questionable “expertise” from the Internet. Our game will represent quite a brief list of clear rules of trading where every newcomer can see an absolutely transparent structure with all involved entities along with interactions between them. The platform will offer a set of easily graspable trading tools for everyone. Moreover, just the platform as a “responsible executive” undertakes risks with which the amateurish traders (aka gamers) are not familiar. Once our tradable crypto asset KPTN is backed by real metals, many traditional risks inherent in crypto trading will be overcome. Besides, people learn faster when the content is gamified — that’s why we are developing our investment platform as a game, by the way;
- Investment. People can keep their savings in shares, gold, or currencies. If you have enough money to hold — hold it in a bank. If you have enough money to invest — invest it through numerous funds. But if it comes to a teeny amount of $100, both holding and investment become meaningless — it is better to spend it for food or for some other consumables. Nevertheless, many people throughout the world are looking for an opportunity for micro-investments. They seek a reliable starting point from where they could begin their movement to more significant investments without big commercial risks. Besides, many people prefer to stay anonymous in their investment activities. Needless to say that only crypto economy meets their expectations more or less. Many heard the miracle stories about those who invested a couple of hundreds of dollars in BTC 5 years ago to be able to buy a new Tesla 3 today for the ROI. However, times changed, and the crypto environment is overfilled with bubbles and scams. Besides, the new promising trends are available in the investment realm — cobalt price is growing faster than anything else while the demand for cobalt is growing even faster. In such a situation, nothing can make all ends meet better than our crypto investment platform — we offer “all in one”.
- Upward mobility. In the contemporary overpopulated world, changing an actual social status as well as shifting to the other social stratum become tougher and tougher. On the one hand, the total globalization blurs the line between the old middle class and the other strata. On the other hand, the immense social inequality keeps growing all over the world. The System can perpetuate the current social market model, unfortunately. Our platform represents numerous opportunities for the users to reveal their hidden business talents along with their social management capabilities. The most dedicated gamers will be hired by both the platform’s enterprise and the seabed mining companies. The talent hunting is one of the officially declared objectives of our platform.
- Earning a living. Millions and millions of people throughout the world are unemployed. They cannot find a job due to various socio-economic constraints. Nevertheless, many of them own computers connected to the internet, the majority have smartphones. But what they all have in abundance is time. The platform will offer them a working algorithm on how to transform their free time into an income-generating activity. As previously stated, the platform can couple the actually working seabed mining industry with millions of people through a gamified virtual content. A commercial success of the gamers will depend on their dedication, logical thinking, and business intuition. But in any case, their game experience will be much more interesting and beneficial than haunting the thresholds of welfare services. Our preliminary calculations suggest that a “gamer-as-a-gamer” playing 3–4 hours a day via a smartphone (no processing power to share) can account on 1.5–3% ROI for the first two months when the minimum KPTN price growth is about $0.01–0.02/month. At the same time, a “gamer-as-an-investor” who shares an average processing power of 50 Mhash/s for the pool crypto mining can account on 3–8% ROI/month at the same KPTN price growth. Besides, every paid option purchased by the gamers adds 0.5–3% to their overall ROI. The maximum possible amount of virtual cobalt which can be mined by a single gamer having the most advanced vehicle with several paid options is 150 kg or 15 tons of nodules as an equivalent. In case of our John (see above), it can be exchanged for 135 000 KPTN. Holding this amount at his personal account for one more month, our John could earn extra 2700 USD from the growth of KPTN value.
- Real metals. The platform provides the gamers with an absolutely unique opportunity to turn all their earnings into real rare-earth metals. Each gamer will be able to exchange both KPTN and virtual metals for bars of cobalt, nickel, copper, and manganese reserved at one of the world metal exchanges. Hence, the common people will access the global metal market through our platform. This is exactly the magic of our game which transforms a purely virtual gaming content into the tangible commodities — metals. It is up to the gamers to decide what to do with the real metals they own. But it is worth remembering that the demand for rare metals will inevitably grow in the light of the approaching electric-driven economy where cobalt, nickel, and copper will replace oil and gas in their importance for the humanity. Who knows, maybe holding only 1 kilo of cobalt as a deposit will be more beneficial than trading many kilos of gold in the next two-three years.
The provided figures show rather proportions than some actual amounts which can be earned by the gamers. The platform will offer various monetization algorithms that can significantly vary according to options and conditions every particular gamer can choose. Nevertheless, we believe that a cumulative effect of all provided motivational factors can attract the attention of both dedicated gamers and visionary investors to our platform. And it means that the notorious network effect will be strong.
How the platform earns money
Since the present post is aimed at explaining our concept to the potential business partners, it is important to understand from what sources the platform itself can benefit. The picture above shows that the platform has the biggest number of connections with various sources of profit in comparison with the gamers and seabed miners. However, some further details wouldn’t hurt.
- Fees and charges: The platform as a complex medium providing interactions between all involved parties has to spend quite a significant amount of labor and energy to maintain its infrastructure. That’s why nobody should be against the fees with which all transactions within the platform will be charged. Assume a community of only 10 000 gamers (those who are familiar with a gaming industry should realize what an insignificant figure it is in fact) making 1 transaction a day each. Let’s take an average transaction as $100. The platform charges a transaction with a 0.1% fee. The income of the platform looks funny in such a case — only $1000 a day. However, the multifaceted structure of such software as online games and crypto exchanges (and our platform is a combination of both) implies hundreds and thousands of transactions per second on a 24-hour basis when millions of users are involved. Hence, the provided figure will be bigger by many orders of magnitude. We believe that such source of income as fees-&-charges alone will be more than sufficient to provide the platform with an infrastructure maintenance.
- Crypto mining and exchange. The platform will run a special feature which combines the processing power of the users’ computers into a pool for a crypto mining. If an average shared processing power of a single computer is 50 Mhash/s (one-third of an average laptop processing power), the pool of 10 000 gamers can provide the platform with 500 Ghash/s. Even a half of this power can exceed the power of an average crypto mining pool available today on the internet.
Hence, the platform can share the rewards received from crypto mining with the users in the form of KPTN. It implies an exchange process when the internal exchange of the platform provides KPTN-to-crypto and vice versa exchanging. And we remember that the platform charges each transaction with a fee. Besides, the crypto received by the platform as the reward for mining can be redirected to the external crypto exchanges for trading. In addition, it is worth remembering that the users will be able to use various cryptocurrencies to pay for the game options on the platform that, therefore, implies an exchange process where the transactions are charged with a fee also.
3. Crypto trading and KPTN value growth. We see the indisputable strong network effect of our platform since all prerequisites provided above hint at it clearly. It means that the value of KPTN will grow in a course of time. The growing price of KPTN at the external crypto exchanges offers great opportunities to both the users and the platform. The users will trade KPTN within the platform exchanging it for the other cryptos, virtual and real metals, fiat, and game options. They will conduct numerous transactions between each other to capitalize on the growing popularity of KPTN. And of course, the platform will benefit from that internal trading. In addition, an embedded bot-like feature will keep trading KPTN at the external crypto exchanges automatically around the clock in favor of the platform. Besides, we should always keep in mind that KPTN will be backed by the real metals extracted from the seabed. The global transition to a post-oil electric-driven economy will increase the demand for such rare metals as cobalt, nickel, and copper. It will add another enforcement to KPTN which hybrid nature can make our coin lead the whole token economy in a broad perspective.
4. Copyright. Once our game is a software mass product, the typical profits from copyright are included. Numerous byproducts based on the growing popularity of our game implies some extra profits for the platform.
5. Rare metals trading. The platform will be an integral part of a complex solution which includes the actually working seabed mining company. One way or another, a part of profits from the supply of metals to a global metal market will be shared with the platform. Besides, the seabed mining company will empower the platform to manage the numerous real-metal deposits of the users — thousands and thousands of personal accounts will require quite an advanced asset management system. Acting on behalf of the users, the platform will benefit from the metal trading deals at the world metal exchanges. Fees included.
Summarizing the above, we can call the platform a complex hub which integrates all processes running between all involved parties. Conducting control over various asset flows, the platform will get numerous income-generating opportunities to be the most lucrative link in the whole chain.
From what sources seabed miners benefit
We are not going to explain how the seabed mining company benefits from its extractive activity because all relevant calculations are available on the website. Let’s just say that the continuous funding coming from the micro-investors (aka gamers) will add a significant momentum to the development of the entire seabed mining industry. The biggest advantage the mining company can get from the platform is the super flexible means of interaction with a huge mass of common people all over the world whose recognition can raise the company at the top of the global public popularity. Needless to say that such a publicity can significantly reinforce the company’s image and, therefore, increase its capitalization.
The social impact
The only issue remaining to discuss is the social impact the platform can make on the worldwide community. This coin has two sides: the involvement of millions of people into a meaningful income-generating activity can improve the social stability on the one hand. The global transition to a new post-oil economy won’t do without the enormously rich seabed resources of rare-earth metals on the other hand. Hence, implementation of such initiatives as our gamified investment platform is a win-win strategy in the present days of hybrid solutions.
Everyone is welcome.
“Seabed Mining Race”: How To Objectify Virtual Crypto With Real Metals (Part II) was originally published in Extractive Industry 2.0 on Medium, where people are continuing the conversation by highlighting and responding to this story.