First of all I’m very sorry for the late post. I was out pretty much for the entire day yesterday and had to go to hospital early this morning. The post was already half typed but not quite done yet. I just finished typing it so here it is!
I watched a short half hour program on tv last night and they were talking about virtual currencies. See in Australia, cash is being used less and less. Everybody has an ATM card which you can use to pay for things using an eftpos terminal. People can choose to pay by Visa, Master, Amex, etc. Visa card holders can use Visa Wave and Mastercard holders can use Pay Pass. Soon, we’ll be able to pay for things with our phones. Even vending machines selling things that are less than 3 dollars has a credit card reader embedded in them.
So with all these technology around, and physical cash being used less and less, so if this trend continues won’t all currencies in general eventually become virtual currencies? How much money we have will just be a number in our bank account.
For quite sometimes now virtual currencies have been really big and are getting bigger. In China, something called Q coins are used so widely that it is actually affecting the RMB so much that the Bank of China intervened. In all sorts of games on Facebook or on the iPhone, we can exchange cash for these virtual credits and use them to purchase items in the game. Facebook, which is big enough to be the 3rd biggest country in the world, has something called Facebook Credits, which can be used to buy virtual goods in many games and apps on the Facebook Platform.
In some parts of the world, there are farms that grow WOW characters. People actually play all day and night to get a character that meets a client’s exact requirements and are sold to them. This is actually a massive industry.
There are also people that use these kinds of virtual currencies to get around gambling laws. So they win in games and earn these credits. They then go to a “separate” company and that company will exchange their virtual credits to proper money.
I’ve never played WOW myself, and the only virtual currency I’ve ever bought was some diamonds on the iPhone game Froggy Jump. It was a one off thing, I got lazy to level up the old way. So I don’t really have experience as to how they work or how big they are.
I’m just typing this to I guess think about how virtual currencies is going to impact proper currencies. Can something like Facebook Credits become so big that they might as well be a proper currency? And when that happens is it worth holding highly inflated currencies? What if people in Zimbabwe rather have Facebook Credit for their goods than their Zimbabwean dollar? What do you think?
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