Virtual Currency… Kind of Like Monopoly Money?
July 1st, 2009
Similar to trading play money for a piece of the boardwalk in Monopoly and now prevalent across a wide array of online gaming communities and social networks, virtual currency is a growing industry. Pretty difficult to get good numbers on the size of these growing, alternate economies but by some accounts, at least $1 billion of virtual currencies were traded last year. Without opening a whole can of worms on the legality and socio-economic aspects of virtual dead presidents (you did see the movie, didn’t you?!…a classic), let’s just scratch the surface of virtual bucks and leave it at that.
So most of us have heard of the more popular micro-currencies such as Second Life’s Linden Dollars (L$) and the Hi5 Coins. In fact I was ecstatic to create a robotic avatar figure in SL for under L$5. It is now commonplace that most virtual worlds have their own economy. What does this allow for? Well for one, a measurement of success. And us Westerners do like to quantitatively measure our success, don’t we?! And let’s not forget that virtual currency also provides context to the meaning of competition.
So what’s a dollar really worth? According to the Second Life website: “Several online resources allow residents to convert Linden Dollars into US Dollars and vice-versa. Rates fluctuate based on supply and demand, but over the last few years they have remained fairly stable at approximately 250 Linden Dollars (L$) to the US Dollar.” Residents in SL have the ability to purchase land and buy/ sell virtual creations in this fully integrated economy. Get this: nearly USD $35 million is traded amongst residents on a monthly basis! Thus making Second Life one of the world’s largest user-generated ‘virtual’ economies.
Other virtual marketplaces are popping up all over the place, from the recent announcement of Coinstar offering 5 game-related options, including Facebook games, select virtual worlds, and specific online shopping programs to World of Warcraft’s WoW Gold. I believe that much more is to come on the whole idea of web-based commerce and maybe someday there will be a unified unit of money for in-world/online currency exchange: not unlike China’s current lobbying for a united, super currency.
CNN recently featured a write-up on “’Virtual currencies’ power social networks, online games.”
July 2nd, 2009 at 5:23 am
Good article overall. Very informative. I am gonna share it with my friends. I like your blog. Thank you.