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A Chinese Virtual Currency Challenges the Yuan

Posted by Zonk on from the now-buying-oil-in-wow-gold-thanks dept.

Radon360 writes "A Wall Street Journal article reports that China's fastest-rising currency isn't the yuan. It's the QQ coin — online play money created by marketers to sell such things as virtual flowers for instant-message buddies, cellphone ringtones and magical swords for online games. In recent weeks, the QQ coin's real-world value has risen as much as 70%. It's the most extreme case of a so-called virtual currency blurring the boundaries between the online and real worlds — and challenging legal limits. A Chinese Internet company called Tencent Holdings Ltd. designed the payment system in 2002 to allow its 233 million regular registered users to shop for treats in its virtual world. Virtual currencies are in use in many countries — but nowhere have they taken root more deeply than in China."

6 of 183 comments (clear)

  1. Someday... by SlashDev · · Score: 5, Funny

    ... we will all be in debt to the Chinese, the virtual Chinese that is...

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  2. In a sense... by mycroft822 · · Score: 5, Insightful

    Aren't all currencies virtual anyway? Does it matter that one can be printed on paper and one can't? I know there is more to it than just that, but as long as people deem it as valuable does it matter?

    1. Re:In a sense... by TerranFury · · Score: 5, Insightful

      Sarcasm, I assume? Modern currencies generally are not backed by precious metals at all. And in history, things besides gold have been used: the UK's pound used to be backed by silver before it was backed by gold (before it stopped being backed by anything at all), and there were gold-vs-silver debates (the details of which I've forgotten) in American history too.

      Really, what's the significance of gold? What good would it do you or anyone else? Why does it have value? It's just mutual agreement and the faith that it has a value that gives it its value.

      I could even imagine some sort of public-key cryptographic scheme used to assign value to magic numbers... Think Cryptonomicon.

  3. Nope! All currency is a commodity... by Colin+Smith · · Score: 5, Informative

    Currency is just an agreement on a medium to symbolize value. Common misconception, but one which governments are happy to foster. Actually, currency is a commodity in exactly the same way as coffee, bread, oil, gold, pork bellies.

    You see if currency were really a medium which symbolised value, it wouldn't change much. Bread, coffee, gold etc would pretty much always cost the same, they would always have the same value throughout time. Instead what happens is that over time, everything becomes more expensive, inflation. What's happening is that the currency is losing it's value. It does that because there's more of it; supply and demand. When the government('s bankers) print money, all the existing money in circulation decreases in value because there is more of it around.

    So, no, there's no fundamental difference between real and virtual money, just as there's no fundamental difference between real money and a kg of coffee.
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    1. Re:Nope! All currency is a commodity... by Colin+Smith · · Score: 5, Insightful

      If I am marooned on an island, I can eat bread. The money is useless. Cobalt is a commodity, how much use would that be marooned on an island?

      The intrinsic value of money is it's market value, which is why people get so confused over it's nature. It's still a commodity.

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    2. Re:Nope! All currency is a commodity... by Colin+Smith · · Score: 5, Informative

      That's just plain stupid. Coffee has intrinsic value, money does not. Just because the "value" of money fluctuates, does not make money a commodity. It isn't stupid, it's the nature of money. The intrinsic value of money is it's market value, as the intrinsic value of coffee is it's flavour and high caffeine content.

      A currency is only as strong as the government that issued it. Nope... I live in Scotland, we have several notes, issued by private banks (not the government) which are accepted as currency, nobody even thinks about it.

      http://www.rampantscotland.com/know/blknow_money.h tm
      http://en.wikipedia.org/wiki/Banknotes_of_the_poun d_sterling#Scotland

      Have a read:
      http://www.mises.org/money.asp

      Originally almost all money was privately issued, governments acquired the process because it allows them to create and spend money without having to tax the populace. Doing so devalues the existing currency and so is a subtle form of taxation. You've been taken in by your local government's propaganda over the nature of money.

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