A couple of months ago I had the good fortune to hear Douglas Rushkoff expound his ideas about the changing nature of money and how private currencies could shift the way in which society organises its resources, loosening the grip of MegaCorps and even BigGov. It was inspirational stuff and all very timely coming fresh on the heels of a financial meltdown driven by tricky derivatives traders and faceless ratings agencies plundering the goodwill of widows and orphans. However, at the end of the talk Rushkoff, maybe suspecting his sober Swiss audience weren’t entirely convinced, found himself pressing that these ideas weren’t just pie-in-the-sky. Now, while I don’t expect the world’s currency exchanges and the pound in your pocket to go anywhere soon, I was very happy to raise my hand and offer the room a few examples of where I thought Rushkoff’s private currencies were in action – albeit at a micro-level. Firstly, I mentioned the Chinese Q coin, which is used by the 300 million users of the QQ instant messaging site to buy virtual goods. Tencent, the owners of QQ recently revealed that 'internet value-added services,' or virtual goods, made up 78% of the company’s total revenue at the end of last year. Enough to raise the company's international ambitions, including buying a stake in DST, the Russian company that owns a chunk of Facebook. And Q Coins are now being accepted in exchange for ‘real’ goods on 3rd party sites, sufficiently broadly to raise the concern of the Chinese government. I also highlighted the Second Life economy wrap-up that reads like a surreal corporate annual report, including tracking Linden Dollars and their transformation into ‘real money’ through the exchanges, LindeX or the Xstreet SL Exchange.
And, while not operating private currencies, I pointed to Etsy, Zopa and Betfair as examples of private marketplaces that are challenging the traditional corporate structures that Rushkoff believes will come under pressure. These marketplaces range wildly in scale and nature. Etsy is a giant P2P flea market where people sell each other about $22m of (often beautiful) homemade items, such as soaps they’ve made in their garden sheds. Betfair is a vast £300m peer-to-peer gambling exchange. Whereas Zopa is a P2P lending service. All tiny in comparison to the industries in which they operate. However, all very successful and growing like topsy. And now we have Facebook Credits, the attempt by Mark Zuckerberg to create a currency in his world, that as it approaches 500m users is more populus than most countries. Once again it’s all very early days. At its outset, Facebook Credits is a way to unify…
…the booming social gaming activity on the platform whilst letting Zuckerberg take a thirty per cent cut. However, a quick look at your Credits page on Facebook reveals an interface very similar to an online bank. And when you read the major players in the burgeoning social gaming world talking about ‘liquidity on the platform', and how you can use Credits to buy branded goods, it’s not difficult to see Facebook’s virtual currency expanding. Particularly, when considering the global nature of the FB platform and the scope for micropayments presented by its massive mobile usage. And, indeed, the promise of the Open Graph allowing you to carry your FB Wallet around the web to third party websites.
Facebook Credits? That’ll do nicely.
Source: James Cherkoff
New Money