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Could virtual currencies pose an economic danger?

Could virtual currencies pose an economic danger?


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Kandahar

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Facebook seems poised to launch a virtual currency sometime in the next few months, known as Facebook Credits. It will only be used for on-site Facebook applications...at least at first. But in the long term, I'm worried what a ubiquitous virtual currency could do to the global economy.

What happens if Facebook (or some other website) develops an extremely popular virtual currency? Even real-world merchants might start accepting payments in that currency if it was popular enough. Then we would all be at the mercy of a monetary policy which we had no control over, just like Greece currently is. So many people don't trust the independence of the Federal Reserve System; just imagine if we become dependent on a system with no accountability to the public whatsoever, like the Facebook Central Bank or the Bank of Twitter.

I realize that this scenario probably will not happen for at least a decade, but it seems troublesome enough that our government should step in to regulate it now, before the virtual currency systems become entrenched enough that they can lobby against regulations.

What do you think? Could this pose an economic danger a few years down the road, or am I just overthinking this?
 
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Harry Guerrilla

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Facebook seems poised to launch a virtual currency sometime in the next few months, known as Facebook Credits. It will only be used for on-site Facebook applications...at least at first. But in the long term, I'm worried what a ubiquitous virtual currency could do to the global economy.

What happens if Facebook (or some other website) develops an extremely popular virtual currency? Even real-world merchants might start accepting payments in that currency if it was popular enough. Then we would all be at the mercy of a monetary policy which we had no control over, just like Greece currently is. So many people don't trust the independence of the Federal Reserve System; just imagine if we become dependent on a system with no accountability to the public whatsoever, like the Facebook Central Bank or the Bank of Twitter.

I realize that this scenario probably will not happen for at least a decade, but it seems troublesome enough that our government should step in to regulate it now, before the virtual currency systems become entrenched enough that they can lobby against regulations.

What do you think? Could this pose an economic danger a few years down the road, or am I just overthinking this?

I think it would be wonderful if multiple virtual currencies developed.
Decentralizing monetary policy is good, in my opinion.

It would eventually face the same fate as the alternative hard currencies that were developed though.
Government stopping it.
 

Redress

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Facebook seems poised to launch a virtual currency sometime in the next few months, known as Facebook Credits. It will only be used for on-site Facebook applications...at least at first. But in the long term, I'm worried what a ubiquitous virtual currency could do to the global economy.

What happens if Facebook (or some other website) develops an extremely popular virtual currency? Even real-world merchants might start accepting payments in that currency if it was popular enough. Then we would all be at the mercy of a monetary policy which we had no control over, just like Greece currently is. So many people don't trust the independence of the Federal Reserve System; just imagine if we become dependent on a system with no accountability to the public whatsoever, like the Facebook Central Bank or the Bank of Twitter.

I realize that this scenario probably will not happen for at least a decade, but it seems troublesome enough that our government should step in to regulate it now, before the virtual currency systems become entrenched enough that they can lobby against regulations.

What do you think? Could this pose an economic danger a few years down the road, or am I just overthinking this?

Things like Second Life have had virtual currencies for years. I don't think it is going to be a big deal.
 

Kandahar

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Things like Second Life have had virtual currencies for years. I don't think it is going to be a big deal.

Yeah but they aren't really ubiquitous yet. You can't do much with a Linden Dollar outside of Second Life. My concern is that a virtual currency could become a standard method of payment online...and shortly thereafter would become a standard method of payment in the real world. If the US dollar gets supplanted by a privately-controlled currency, then we will no longer have any control over our monetary policy and we'll be less able to get through economic downturns.
 
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Redress

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You ever play it?

BORING!

Geesh, that is the most boring game ever.

It is, but those who like it really do like it, and a few people are making bigtime money playing it.
 

Redress

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Yeah but they aren't really ubiquitous yet. You can't do much with a Linden Dollar outside of Second Life. My concern is that a virtual currency could become a standard method of payment online...and shortly thereafter would become a standard method of payment in the real world. If the US dollar gets supplanted by a privately owned currency, then we no longer have any control over our monetary policy.

I don't think this will be an issue as long as they convert to real money. I could potentially see a situation where you could pay with a virtual currency, but I don't see a situation where you would have to pay with them.
 

Harry Guerrilla

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It is, but those who like it really do like it, and a few people are making bigtime money playing it.

I bet, I cruised around the add on designers and they have everything.

Still though, there isn't that much to do in that game.
I created a naked man/women elf with wings and flew around for a while.
 
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Redress

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I bet, I cruised around the add on designers and they have everything.

Still though, there isn't that much to do in that game.
I created a naked man/women elf with wings and flew around for a while.

As best I can tell, it's mostly a cybersex tool.
 

WI Crippler

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Just think of the implications on college recruiting. Reggie Bush would have had the biggest farm ever.
 

Zyphlin

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I imagine that if you get to a point where these virtual currencies exist and are allowed to be second hand by users that it could possibly cause some tricky economic situations and possibly the need for a re-examining of a lot of situations and laws surrounding them. For example, imagine if there's a loophole where tax is not applied to buying virtual currencies, thus allowing you to bypass taxes completely by buying the currencies and then purchasing items with the currencies which is not under the umbrella of the federal government and not taxed?

However, I imagine virtual currencies will continue on as most of them are now, making it a violation of rules and regulations or terms of service to get and then resell them. Take gold selling in WOW, by far the most played Massively Multiplayer Platform out there. While it is a relatively large industry, spanning numerous websites and even ebay, it is still a relatively niche thing in terms of the amount of people that do it. Its against the user agreement to do so in WOW, leading to banned accounts. This inherently tends to cause the practice of selling it to be left to those typically of rather unscrupulus means, always looking for a leg up, which generates the negative reputation for gold farmers of typically using your information provided to get the gold to simply work at hacking you to steal yours to resell it. Overall, the rules and the situation surrounding it makes it a relatively small market.

I imagine facebook will want to keep tight hold of their credits and the ability to pass credits to other people or especially sell credits second hand.
 
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