Gaming has long been seen as a potential use case environment for bitcoin and other digital currencies, given that the online entertainment sector is an established testing ground for new payment mechanisms and models.

Differences in implementation and focus aside, digital currency holds the potential to constitute core functions within a gaming environment. Today, both new and existing games are beginning to tap bitcoin for inclusion in their platforms.

A new Minecraft server named BitQuest is hoping to utilize decentralized currencies to boost participation, as well as create a more dynamic gaming environment. BitQuest follows in the footsteps of several other bitcoin-powered servers, including the now-defunct BitVegas which once offered various mini-games denominated in digital currency.

Incorporating the Xapo API and the game’s broad capabilities for developers, the BitQuest team has created an environment in which bitcoin functions as its base currency in an organic, easy-to-understand way. Notably, players are unable to deposit bitcoins: “bits” can only be gathered from in-game actions through an item-based resource system.

According to chief developer Cristián Gonzáles, this approach keeps the playing field fair for both new and experienced players. The game is funded through a mixture of donations, sponsorships and an in-house mining operation, and players that want to withdraw their accrued bits need a Xapo wallet.

Gonzáles told CoinDesk that ultimately, the goal is to keep the in-game currency truly decentralized in the gaming environment by keeping the door open to new and interesting ways to generate bitcoin natively. While still in beta, he says BitQuest is proving that bitcoin has a role to play in virtual gaming ecosystems.

He explained:

In Minecraft, players create tools, collect resources and build. The game’s endlessly-expanding landscape and sandbox-style gameplay has made it a hit with child and adult players worldwide and ultimately led to a buyout of Minecraft maker Mojang Games by Microsoft for $2.5 billion.

BitQuest players can earn bitcoin through the accumulation of emeralds, one of the many resources that one can collect through their adventures.

Emeralds can be accrued by killing monsters, collecting tips from other players, contributing in notable ways to the community or even duking it out with other players in the player-versus-player (PvP) arena. Each emerald is worth 0.000001 BTC and can be used in the game’s programmed marketplace as well as various peer-to-peer activities involving other players.

According to Gonzáles, Minecraft is the perfect environment to test whether or not bitcoin can form a suitable basis for a virtual gaming currency:

The secret to surviving in the Minecraft wilderness rests on two basic truths: that you need tools to survive, and that your shelter is your strongest ally.

The game doesn’t drop you in the wilderness right away. Beginners appear within Bitcoin City, a large settlement at the center of the BitQuest universe. Featuring a bank, a marketplace, an arena and yes, a church to the almighty bitcoin, Bitcoin City is home to all the key components of the in-game bitcoin economy.

Like many other servers, BitQuest allows you to claim a humble patch of wilderness for your own, so CoinDesk’s intrepid explorer set out to make his mark in the world. Along the way we visited some impressive structures and found a convenient road leading further into the unknown.

At last we found a place to call home. With a small pool, trees and a rock outcropping that contains some coal – more on the importance of this later – this sanctuary within the vast uncertainties of the Minecraft world will almost certainly prove to be the able bulwark against whatever monsters (the chief source of emeralds, according to the BitQuest team) may be out there once the night falls.

The first order of business is familiar to every Minecraft survivor: punching down a tree.

Trees litter the landscape, and luckily, our little hideaway contained a few trees ripe for the punching. Minecraft players combine resources to create items, and the wood you collect can be used for a wide range of things.

After turning the recently-cut wood into wooden planks, we’re ready to make the crafting table. You need to this make pretty much anything you’ll need in the wilderness, so getting one made is a top priority – especially if the sun is coming down soon.

You first need a pickaxe to start digging into the stone, which invariably will lead you to better tools. A weapon is important in the Minecraft wilderness – once the sun sets, zombies, spiders, skeletons and other unique horrors cooked up by the BitQuest team can easily come wandering up to your settlement.

A friendly passer-by who stopped by what this reporter affectionately dubbed Camp CoinDesk provided some much-needed stone, so we got right to work on a stone pickaxe and sword. Then, it was time to dig...

...and dig. As you can see, you’ll often spend your time carving into the landscape in search of more rare and useful resources. These can be traded with other players on the server for other goods – at the time of this writing, about a dozen players are currently in BitQuest, though during a prior chat with one of the developers, as many as 50 players were logged into the game.

Though CoinDesk’s intrepid explorer did not encounter any monsters that dropped emeralds, we did have a chance to spend some of the free 50 emeralds provided to each player. Among Bitcoin City’s intricately designed buildings is the Bank, in which players can deposit or withdraw their emeralds.

Bitcoin City features a number of automated shops where players can spend their emeralds.

Shops can be created and programmed by players in the game, and while sparsely populated at the time of this writing, the marketplace could become the home of a bit-based economy if more players get involved.

During his visit to the marketplace, CoinDesk’s intrepid explorer bought some orange-colored wool for a bed and food supplies for the wilderness.

BitQuest’s public beta doesn’t have an end date, and according to Gonzáles, much of the work now is focused on building out new services and jumping on the bugs that inevitably crop up with any experimental system.

He pointed to the community as the driver of success given the game’s recent kickoff, adding that players are collaborating on projects, hunting for issues to report, and are even submitting ideas in code form to help the process along. Gonzáles also cited the community's help in giving new players tips on getting started.

According to Gonzáles, future plans include improving transparency, which means sharing the bitcoin address tied to the currency backing the in-game emeralds.

“Soon we will reveal the wallet address so you will be able to see it on the blockchain for complete transparency,” he explained. “Donations have been pretty cool and we are confident this game will continue for a long time.”

Gonzáles joked that since the game launched, he and many others have had little sleep as a result of both coding the game and exploring its ever-endless expanse. This reporter will admit that he, too, found himself digging for virtual blocks in the early hours and, at press time, a large cache of iron ore is currently being smelted in order to make better tools and a suit of armor.

Gonzáles continued:

Screenshot images via BitQuest/Minecraft