In case you think that all of this is a bit of nonsense and that South Korean students selling magic swords to Japanese businessmen isn’t an occupation for real men persons, you might not that Microsoft says that virtual asset sales on XBox Live have now reached $125 million. That’s about $18 per user or, as PlayNoEvil points out, a lot of horse armour.
And if you think that, well, that’s not a lot of money so why would anyone really care about it, look at what’s been going on with QQ in China. In the first quarter, it had QQ recorded 28.5 million peak concurrent IM users and a QUARTER OF A BILLION active accounts. No wonder that the Chinese central bank and 14 ministries had a crackdown on QQ coins being used for non-virtual purchases. Here’s another extract from that WSJ piece:
Economists say virtual currencies work like any other currencies, so long as people trust the institutions behind them. The U.S. dollar, which lost its gold backing in 1971, survives because people trust the U.S. government.
The trouble starts when a virtual currency that isn’t backed by a trusted government, becomes linked to a real one that is through an exchange rate. Virtual currency brokers call that RMT, or real-money trade. When that happened to the QQ coin, it effectively turned into a parallel currency operating alongside the yuan, says Yiping Huang, the chief Asia economist of Citibank.
The creation of too many QQ coins, he notes, could, in theory, create a surge in China’s total money supply, leading to inflation.
You can’t help but be fascinated by this. Or at least you should be fascinated by it you’re interested in digital money.
These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]