Wednesday, May 20, 2009

It All Spends the Same

With plenty of rage on Main Street over the sort of exotic financial doohickeys dreamed up by Wall Street money managers that put much of the froth into the housing and trade bubbles, a few jeers are hardly out of place when video game junkies and their enablers start talking about trading "virtual" (read: fake) currency as if it corresponds to something of actual value.

Here is the guy who established the first open market for this type of commodity, making the case for his opposition in 2004:

"What I love the most, and the idea that gives me chills, is that I am buying nothing, and then selling nothing, for a profit. [H]ere I am, no virtual avatar running around and no virtual real estate, just skimming money off the top."
Somebody get this man a hedge fund! Of course, his Gaming Open Market venture didn't see the end of 2005. It wasn't for lack of interest. The vibrant exchange this fellow and his partner founded was deemed a runaway success at the time by people who gave a shit. In the end, it just didn't prove possible (or profitable) to control the risk of fraud and wild inflationary cycles which were endemic to the enterprise.

But the stuff isn't going away. Applications and controls for virtual currency will continue to develop. The initial conceptual problem of what exactly this liquid, purely digital medium of exchange represents can be easily overcome by recognizing how naturally we think of common bank notes as having intrinsic value. There was a time not so long ago when trying to pass a wad of paper in return for, say, produce or livestock would see that paper rolled up and crammed in your ass. Do not pass Go. Do not collect $200.

Do not stab that guy in the chest for selling your imaginary sword.

No comments:

Post a Comment