Social Money


Old money is dead, long live the new, clean, the virtual money! The global finance crisis has spurred the development for new, clean, non prestressed online business.

It reminds me of the new economy euphoria, and 10 years after it’s collapse many seem to think the time for a new .com thing has come.

The hottest shit in the field of net-money is a disappointment, if you charge it by the over exaggerated expectations connected with the buzzword ‘social money’ and especially “social micro-payment”.

The social web, lead by Facebook still grows, and wherever something grows, the idea of a matching currency is close at hand.

I think of flattr, that raised expectations, a service co-developed by one of the founders of Pirate Bay, that allows to contribute micro amounts of money for blogs, or other online content by clicking a ‘like’ alike button. After a good start the business model remained static…

Social acid

“Social Money” also brought up some completely different services than Flattr or Kachingle. Sites like SplitMyBill or BillMonk promise to organize the very personal micro-economy in the real-world social life. What?

Think of an online tool that keeps track of common expenses with roommates or friends when you pay your bill from last nights dinner at your favorite pizza parlor, or who lent a book to whom and maybe is good for getting back a screwdriver in return. Whether this kind of “social money” actually makes sense, I doubt.

Keeping track of stuff you lend or borrow you don’t need an online banking tool – or you got a severe problem! Actually such tools will rather generate friends that are and notoriously suspicious skinflints and nitpickers than people you want to go out with for dinner.

Betrayed and sold

Smart asses interpret the term “Social Money” in a completely different way than your nitpicker friends will do:

The new social currency are Facebook friends! This is what pays in the funky hip DIY-web 2.0 world. So why pondering on revenues, if you can accumulate your social money by adding whomever you can? If you got a bunch of them, sell them to an ad agency that desperately seeks access to the social media people.

The result is called uSocial and offers Twitter, Facebook and YouTube followers in wholesale style: 1.000 Facebook friends for USD 197, 2000 for USD 321. If you seek more friends and fans prices are available on request. The question how do you match those to a certain market segment is not answered yet…

Selling Twitter followers on eBay is facing a crisis these days – as prices dropped from USD 0,25 in 2009 to USD 0,01 this year. Due to the fact that such contacts equal social spam and not grown fandom.

Gold crisis?

Facing the highly speculative social currency experiments, it is probably time to look closer on, existing online money models.

The ‘gold war’ between China and the United States was commented two years ago by the Wall Street Journal “the message that the Chinese government is planning a special tax of 20 percent, a year later … analysts… agreed that China had concrete plans to dry out the market with official bans, which lead to a panic as China’s exports account for full 80 percent of the global supply. A trade ban would lead to exploding prices and hoarding.

At least China just banned juveniles from the virtual gold market – as this crisis was about the online role-playing game World of Warcraft (WoW), with around 12 million players. Even the Wall Street Journals news was about virtual gold that was collected by estimated 400.000(!) pro gamers in China who make their livelihood by selling it to others that need this currency to develop or equip their game characters.


Trading gold or other assets from online games is a funny thing, but the turnover is impressing an tops other traditional markets already. But it doesn’t really work as a role model for a new virtual money economy. The demand fired by online games within their own environment is not comparable to real markets. Not at least as resources are limited in the real world.

An interesting model – if you seek experience for social driven, virtual trade markets – are classified ads. Online flea markets. eBay. Facebooks own currency – built to trade in-Facebook goods and services – is now accepted by some third-party partners. In the U.S., recently some shops offered Facebook credits as gift vouchers.

What’s next?

Can I pay my coffee at Starbucks with Facebook coins, or WoW gold?


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