Slashdot Mirror
Is Facebook Becoming a Central Bank?
wasimkadak sends this quote from an article at Forbes:
"Facebook's 27-year-old founder, Mark Zuckerberg, isn't usually mentioned in the same breath as Ben Bernanke, the 58-year-old head of the Federal Reserve. But Facebook's early adventures in the money-creating business are going well enough that the central-bank comparison gets tempting. ... Initially, the Credits-based economy was confined to the virtual world’s trifles. Credits could be spent to buy imaginary gold bars for aficionados of Mafia Wars, or bouquets of virtual flowers for birthday postings on friends’ Facebook accounts. This new form of digital money was cute but essentially useless for mainstream activities. Lately Credits have become more intriguing. Warner Brothers this summer offered movie-goers a chance to watch Harry Potter and The Dark Knight for 30 Credits apiece. Miramax and Paramount countered with film-viewing offers, too. In a provocative post this week on Inside Facebook, guest blogger Peter Vogel argues that Credits in the next few years will become more of a true currency. Facebook's 800 million worldwide users represent a lot of buying power. He figures Credits could evolve into commercial mainstays for digital movies and music."
The history of the web is filled with play-online games for points that could be used for other things... but all crash in an inflationary spiral. Points are free, but the prizes offered are not and eventually the value falls below the "par value" the site originally had. Has anybody recently cashed out with GSN Oodles or Moola.com's Moola points?
The mark of a true currency is that it can be used to pay U.S tax liabilities. For Americans at least, anything else is just, at best, a commodity subject to capital gains taxes. For example, if you buy gold coins, or facebook credits, and then sell them after their value has doubled you'll have to pay capital gains tax on the amount they appreciated against the dollar. if you barter the gold coins, or facebook credits, for services or goods you will have to pay taxes on that barter transaction in dollars. If the dollar appreciates in value against other currencies though, there is no capital gains tax to pay, even though your dollar might buy more.
No, they do sequels because they don't generally have to sell them. The industry knows who's going to go to see a sequel and how large that audience is and as a result is able to much more accurately gauge the prospects. They won't know whom it is precisely that will go or precisely how many, but they'll have it down pretty good in general.
That being said the studios are always looking for new ideas the big problem they tend to have is that only a fraction of a percent of the ideas they receive are actually worth filming and of those only a fraction of them are going to be memorable.
From the article:
Peter Vogel is co-founder of Plink, a Facebook Credits-based loyalty program that rewards Facebook members for dining and making purchases at their favorite restaurants and stores.
"Facebook credits" are just another gift card scheme. You can't cash them out. You can't invest them. You can't convert them to another currency. You can't transfer them to another individual. And Facebook takes a 30% cut off the top.
The only virtual currency that comes close to behaving like a currency is Linden Dollars, the monetary unit of Second Life. Those, you can transfer and convert.
Bitcoin had potential, but it turned into a pyramid scheme.
When they discover they can get stuff for free. Same way the US government has done.
Deleted
Except it's not. It's controlled by a single entity, which can "print" all it wants and even revogate someone's credits.
It's much more like dollars than Bitcoins.
Dilbert RSS feed
Facebook will have to send a 1099 to everyone who earned credits this year and we'll have to pay taxes. My bank sent me one saying I earned $17 in interest. If I earned enough credits to buy 2 movies they'd probably be worth more than that and I'm sure the IRS would want their cut.
Predicted all of this, and explained very clearly why as soon as there's some traction, and the ability to move/take cash out, the existing banks/authorities will be down on their heads like a weight of very heavy things.
Why Bitcoin was so scary for a time.
These things offer wonderful room for money laundering.
I dunno. I see PayPal and eBay as a cartel which should be broken up, but nodbody has done anything about it, yet. All right out there in the open.
! It appears you are attempting to receive payment by means other than PayPal which is not allowed, please correct your listing so we get an even bigger cut of your sale
A feeling of having made the same mistake before: Deja Foobar
Betteridge's Law of Headlines is an adage that states, "Any headline which ends in a question mark can be answered by the word 'no'".
There's no -1 for "I don't get it."
We all use faerie gold already, the reason it works is not because it's worth anything, it's because enough people believe it's worth something. Money hasn't been worth anything since the gold standard was dropped. While I don't believe that FB money will ever take off in a meaningful way I also thought the Spice Girls were going to be a one hit wonder. There's no accounting for taste.
In a cybernetic fit of rage she pissed off to another age...
You're half right. Money hasn't been worth anything since before the gold standard was dropped. Even gold is fiat currency. Money, including precious metal coinage, is just tokens meant to simplify complex barter arrangements. It only has value based on people's faith in its value.
If it works for you, that's fine, I won't tell you not to use it. However that your tiny game (one I've never heard of, and I'm rather in to games) uses it means jack and shit. I can buy -nothing- I want with bitcoins, not a single thing. Anything I can think of that I'd desire which is sold by someone who takes bitcoins as payment.
Also are your players really using it as a currency? I doubt it, they are using it as chips just like at any other casino. As in they buy them as needed, play with them, and then cash out when they are done. That isn't what you do with a currency. A currency is something used for general transactions, and something you hold on to. When people talking about "having savings" they mean "having currency held in reserve".
I clicked through to TFA. I know, what was I thinking...
So, a co-founder of a business based on Facebook Credits thinks they're super-important and could be equivalent to actual money. Right. Next ridiculous story, please.
I expect more stories inflating Facebook's perceived worth to be pushed to the mainstream media in the coming months as Facebook's IPO is imminent.
I trust facebook even less than I trust the U.S. government, and I don't trust government at all.
God forbid facebook ever becomes a central bank!
That $10 in 1998 invested in HANS (the Hansens natural soda company, at the IPO) turned into over $2,000 before it was bought by MNST (Monster Bev co.) and tripled from there.
Cool - your $10 in cybergold could be about 6 grand now, if you played your cards right!
Of course, if you left that tenner in your coat pocket, you can only get about $7.50 1998 equivalent worth of stuff...
This issue is a bit more complicated than you think.
Or, more precisely, by their willingness to accept it as payment. Recursively. Acceptance all the way down.
Analogies don't equal equalities, they are merely somewhat analogous.
When people start accepting Facebook dollars as part of their salary then it will be a real currency. Until then it will be a promotional gimmick, just a bit more complicated than Marlboro boxes.
I think you underestimate just how much I just dont care.
"Intrinsic value" isn't intrinsic, it is subjective and dependent on context.