A soft currency is a currency that can be earned through many actions in a game. One very common way of making players feel a sense of advancement and growth is to increase their ability to earn money. So, not only do they feel like they have increased in status by having lots of money, but also, they feel more powerful with the ability to generate money faster.
A hard currency is a currency that can be only earned through a small number of actions including purchasing them for real world money. Other examples of earning hard currencies are often by leveling up or through a daily lottery.
The reason these currencies are generally separated is so that inflation can occur over time in the soft currency economy without destroying the value of the hard currency which is how the developers actually get paid.
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from Quora http://ift.tt/28VFcTF
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