Tuesday, August 10, 2010

Facebook Credits - The new global currency

Today I logged into Facebook to see that I had received 25 Facebook credits with a value of $2.50 USD. What are Facebook credits I wondered. I investigated and found that they could be used to purchase premium services and for you to play premium games.

With a user base exceeding 500 million, this new currency already has more users than most countries on earth have as a population. This is an exciting prospect which I believe has the best chance yet of creating a micro payment system for the net that actually works. Facebook takes a 30% cut of this virtual currency when you purchase credits.

At this current time there is no method of cashing out Facebook credits, I suspect this is an attempt to avoid taxation, banking and gambling regulation. Although in time for this currency to succeed it will need to be possible to be used in all circumstances, this is certainly a step in the right direction.

Apple generates huge revenues from its app store and Facebook wants a piece of that pie. If successful this virtual currency has the potential to revolutionise the world,  potentially to depose Paypal from its dominant position and to steal Googles crown in the PPC market. However, I'm sure the other players in this market will not just roll over and let this happen - I look forward to seeing how they react.

Becoming increasingly dependent on a currency controlled by a private corporation has its downsides. Other virtual currencies have been subject to hyper inflation and virtual crime. If Facebook can prove their currency is stable and convince websites to start accepting their payments we will see the web being revolutionised.

1 comment:

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