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Virtual Currency Becomes Real In South Korea

Soulskill posted more than 4 years ago | from the license-to-print-money dept.

The Almighty Buck 203

garylian writes "Massively is reporting that the South Korean Supreme Court has stated that virtual currency is the equivalent of real-world money. For those of you who might not be drawing the link, the core there is that selling in-game currency for real money is essentially just an exchange of currency and perfectly legal in South Korea. This could have sweeping implications for RMT operations the world over, not to mention free-to-play games and... well, online games in general. The official story is available online from JoongAng Daily."

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The real reason (4, Insightful)

sopssa (1498795) | more than 4 years ago | (#30822238)

It's lucrative for the government to say that. After all, now they can add tax between exchanges, in top of the service costs too.

Re:The real reason (1, Redundant)

Joehonkie (665142) | more than 4 years ago | (#30822336)

Awww, I wanted to say that!

Re:The real reason (0)

Anonymous Coward | more than 4 years ago | (#30822428)

And I wanted to make a lame joke about "only old people" in reference to Korea. However, I'm probably the only person to remember that meme.

Re:The real reason (4, Funny)

rarel (697734) | more than 4 years ago | (#30822754)

Only old people remember that meme.

Re:The real reason (2, Funny)

A nonymous Coward (7548) | more than 4 years ago | (#30822758)

You're probably the only one old enough to remember that.

Re:The real reason (2, Interesting)

tacarat (696339) | more than 4 years ago | (#30822426)

Yep. Considering that they've been taxing game transactions transparently for years, I guess this is just catching up.

What? They haven't? Old school arcade players bought additional health in Gauntlet. The tax was rolled into the $0.25 purchase price. Continues (which are basically extra lives in a game) are the same thing. I'm sure there are other examples, but the taxman getting a cut on such "microtransactions" is nothing new. They just needed a way to do it with some of the newer setups.

Granted, now the problem is that this may have negative ramifications for the games due to the higher level of multiplayer interaction. Would duping become a crime equivalent to counterfeiting and thus carry big jail time?

Lucrative for me, too! (1)

IndigoDarkwolf (752210) | more than 4 years ago | (#30822612)

I just need to get a job at Blizzard.

Re:The real reason (3, Interesting)

DarkIye (875062) | more than 4 years ago | (#30822654)

Also, doesn't converting other currencies to virtual currency cause a duplication of the money? I mean, you give the company your Korean won and they have to make you some cash. Well, unless they move the money to you from a virtual vault they own, and to have such a thing they'd have to change the whole system.

Re:The real reason (3, Insightful)

hey! (33014) | more than 4 years ago | (#30822718)

It's not the *government* saying that. It's the courts.

I have serious doubts about the article summary and title here. Reading the article behind the article, it seems that the courts haven't ruled that in game money is "real", otherwise they'd be taxing in-game transactions. It's just saying that in-game money can be sold.

It seems reasonable that they should treat the sale of in game things (currency or objects) like any other kind of sale of any other kind of property. Why should you be able to earn in-game money and sell it without tax, while somebody selling the fruits of his labor in something else has to pay tax? Or vice versa?

Money isn't real (1, Insightful)

bussdriver (620565) | more than 4 years ago | (#30823652)

Money is virtual ALREADY. Arguably, money was virtual at its inception but since we moved from gold (tangible) to debt (intangible) money is now virtual.

Furthermore, most the worlds money is exchanged as numbers (now being done with computers) so even the representative objects (cash/coin) have only been a niche player.

Banks don't print money, they practically type a cheat code and the government just gives them a higher number to work with (which is many times higher than the actual virtual amount they are given - see fractional lending.)

Democracies have a weakness: complexity.
The more complex the more removed from the public the issue is for them to manage their employees (public servants.) Like a boss who is clueless about the jobs his workers perform; it just doesn't work out as well in the long term... Power by obscurity primarily using complexity; or one could think of it as security by obscurity. It actually works; obscure something enough and you deter the curious people; unlike computer security, 1 person "getting in" does not cause much change (if any) most of the time (because its not a computer system and it does not behave like one even if the concepts apply to both.)

The solution is to simplify the law... using mostly lawyers elected to office? I know... Seriously, we don't need most the complexity its why judges and juries exist to interpret using "common sense" if we try to program everything explicitly for fear of the judicial branch and the public might think we end up with what we have today (see jury nullification and think about why it exists to counter this mentality of undermining of freedom.)

Re:The real reason (1)

alonsoac (180192) | more than 4 years ago | (#30823698)

It's not the *government* saying that. It's the courts.

South Korea's government is divided into three branches: executive, judicial, and legislative. So yes the courts are part of the government.

Currency value manipulation (2, Insightful)

zerosomething (1353609) | more than 4 years ago | (#30822312)

So we can sue Linden Labs for currency manipulation cause... oh wait the US does that all the time so I guess it's legal?

Re:Currency value manipulation (1, Informative)

Anonymous Coward | more than 4 years ago | (#30822536)

You realize that, in practice, laws don't apply to governments and anyone working on their behalf, right?

Re:Currency value manipulation (1)

Opportunist (166417) | more than 4 years ago | (#30822570)

Only 'cause it's the US that's doing it. C'mon, how long have you been on this planet that you don't know that?

So fix the headline (2, Funny)

tomhudson (43916) | more than 4 years ago | (#30822642)

"Real Currency Becomes Virtual(ly worthless) in US".

This message was brought to you by the Fed.

Legal? (1)

MozeeToby (1163751) | more than 4 years ago | (#30822326)

Is minting a competing currency legal in South Korea? I thought it was illegal in the States, I seem to remember some libertarians a while back trying to set up a gold standard currency that would have competed with the dollar and they got closed down.

Re:Legal? (1)

revlayle (964221) | more than 4 years ago | (#30822372)

virtual currencies are not minted - unless they change the definition of minted

Re:Legal? (1)

MozeeToby (1163751) | more than 4 years ago | (#30822408)

Dollar bills are not 'minted' either, but they are still covered by the constitution and laws that govern the minting of currency.

Re:Legal? (2, Funny)

revlayle (964221) | more than 4 years ago | (#30822448)

LOGIC - IT HURTS *sizzzzzle*

Re:Legal? (2, Interesting)

zerosomething (1353609) | more than 4 years ago | (#30822438)

Casinos do it all the time. Private currency isn't illegal

Re:Legal? (2, Informative)

istartedi (132515) | more than 4 years ago | (#30822454)

You're probably referring to the "Liberty Dollar".

Issuing a competing, aka "complementary" currency is not illegal! See, Ithaca hours, the Matole Petole, and a number of others.

What made the Liberty coins illegal was that they had too close a resemblance to actual US currency, and were being advertised in ways that might lead people to believe they were legal tender. There may have been some other frauds revolving around the organization that sold them also.

The fact that they minted silver (and maybe gold too, I don't recall) didn't make them illegal. The aforementioned Petole is silver, and nobody bothers them. They don't try to pass their coins off as valid US currency though, just 1.0 oz. fine silver. Nothing illegal about that.

Re:Legal? (3, Informative)

DaveV1.0 (203135) | more than 4 years ago | (#30823304)

Yes, it is illegal. See 18 USC Chapter 25 486:

486. Uttering coins of gold, silver or other metal [cornell.edu]

Whoever, except as authorized by law, makes or utters or passes, or attempts to utter or pass, any coins of gold or silver or other metal, or alloys of metals, intended for use as current money, whether in the resemblance of coins of the United States or of foreign countries, or of original design, shall be fined under this title or imprisoned not more than five years, or both.

Liberty Dollars were not authorized by law, and therefore the minting of same is illegal.

Re:Legal? (1)

istartedi (132515) | more than 4 years ago | (#30823624)

IANAL, but I believe it all hinges on the definition of "current money". If it doesn't hinge on that phrase, then why are the "generic silver rounds" sold by other dealers not being confiscated? I think the Liberty Dollar people would have been fine if they had not used the word "Dollar" or the dollar sign. I'm not sure how "current money" differs from "legal tender", AFAIK they have the same legal meaning for this purpose.

The US Mint explains their PoV here. [usmint.gov]

Re:Legal? (1)

JesseMcDonald (536341) | more than 4 years ago | (#30823550)

What made the Liberty coins illegal was that they had too close a resemblance to actual US currency...

Have you ever actually seen a Liberty Dollar? Among other things, they're (a) made of silver, unlike any current US coin; (b) much larger than any current US coin; (c) printed with a different design; (d) labeled with a different motto; (e) have "libertydollar.org" on the back; etc. In short, they are nothing like any current US currency. Here's a picture, in case you don't believe me: Liberty Dollar [city-data.com] .

...and were being advertised in ways that might lead people to believe they were legal tender.

There was some trouble with individual Liberty Dollars users not specifically stating that they were paying with real money, as opposed to legal tender, but to the best of my knowledge the organization itself never advertised Liberty Dollars as legal tender, and in fact went out of its way to point out the difference and advise its customers not to label it as such. What would be the point, after all, of taking valuable silver coins and passing them off as worthless legal tender?

Re:Legal? (1)

istartedi (132515) | more than 4 years ago | (#30823756)

I had seen the Liberty Dollars before, and yes they look "fakey" to me, and probably to most Slashdotters.

Now... to somebody with an IQ of 100 or less... well, maybe they'd be fooled.

In any event, the US Mint [usmint.gov] does a pretty good job of explaining how the LDs, in essence, used the "trademarks" of legal US currency.

Re:Legal? (1)

suso (153703) | more than 4 years ago | (#30822494)

There are a variety of regional currencies in the U.S. that are usually part of local economic interests. I think there is some clause that allows them. There is an article for it on wikipedia somewhere.

Re:Legal? (1)

pete-classic (75983) | more than 4 years ago | (#30822788)

There are? Can you provide any more information, or some sort of references?

You're not confusing the twelve Federal Reserve regional banks with different currencies, are you? Each regional bank has its mark on the bills it issues, but they are all part of a single system of currency.

-Peter

Re:Legal? (1)

JonStewartMill (1463117) | more than 4 years ago | (#30823098)

FWIW, I think I read something about it in a Wikipedia article on the Tenth Amendment to the US Constitution.

Re:Legal? (1)

pclminion (145572) | more than 4 years ago | (#30822968)

It was never intended as a competing currency. The government has, after the fact, DECLARED that it is equivalent to real currency. You cannot, in most sane countries, be prosecuted for something you did before it was a crime. And if the intention of the government was to make virtual currency illegal, they could have just declared it so, rather than saying it's the same as real currency. Obviously the intention is to be able to tax transactions made in game worlds with actual tax.

Of course, since the two currencies have been declared equivalent, I don't see why I couldn't just pay my taxes in virtual gold. They're the same thing right?

Re:Legal? (1)

JonStewartMill (1463117) | more than 4 years ago | (#30823066)

The "Liberty Dollar" [libertydollar.org] is alive and well -- at least according to its proponents.

Re:Legal? (1)

hitmark (640295) | more than 4 years ago | (#30823234)

technically, the only thing that makes a currency "legal" is if a national leadership will accept it as payment for taxes.

anything else is basically a IOU for services or products.

hell, as most money is being circulated electronically these days, i cant really tell a diff between virtual and real money any more.

Re:Legal? (1)

megamerican (1073936) | more than 4 years ago | (#30823642)

It's really only illegal if you are somewhat successful.

The FBI went after Liberty Dollar, which sold and real gold and silver coins and encouraged people and business to use them voluntarily instead of a Federal Reserve Note.

The legal tender law doesn't apply to people using other currencies in private transactions. It basically means that banks and people can't force you to pay anything but dollars on debt that you owe. However, here is a gem from the FBI Press release: [libertydollar.org]

“People understand that there is only one legal currency in the United States. When groups try to replace the U.S. dollar with coins and bills that don’t hold the same value, it affects the economy. Consumers were using their hard-earned money to buy goods and services, then getting fake change in return,” said Owen Harris, the Special Agent in Charge of the Charlotte Division of the FBI. “No one in this country is above or beyond the law, and our law enforcement partners will continue to bring violators to justice.

There are so many things wrong and hilariously ironic with this statement I'll let it stand as is.

The FBI's basic argument was that the liberty dollar looked too much like "real money" and they must preserve the monopoly of the Federal Reserve to "save the economy."

Gee, thanks!

Whats the diff? (2, Interesting)

mishehu (712452) | more than 4 years ago | (#30822332)

What is the difference between this and the S.K. gov't simply deeming that any money earned on the sale of "virtual currency" would be subject to income tax? That is, assuming they have an income tax there, which I do not know myself. I suspect that the US IRS and respective state gov'ts would take this opinion...

Re:Whats the diff? (4, Interesting)

Jezza (39441) | more than 4 years ago | (#30822702)

I suppose it's OK, if you can pay it with Linden Dollars.

I seriously don't see how this'll work. Real money has the "I promise to pay the bearer" (or similar) thingy, virtual currencies don't. This seems like a pretty huge difference, I don't think the South Koreans have properly thought about it. Imagine if I did pay my income tax with Linden Dollars... Do I only get virtual health care? (I'm a Brit... I realise in the US this isn't funny).

As long as I can't buy real things with my virtual money then it's not real money! As soon as I can, well then I guess it is (as long as the goods have title, I have to be able to resell them).

Re:Whats the diff? (1)

argent (18001) | more than 4 years ago | (#30822920)

Imagine if I did pay my income tax with Linden Dollars... Do I only get virtual health care? (I'm a Brit... I realise in the US this isn't funny).

In the US you get virtual health care for your taxes, and STILL have to pay for real health care.

Re:Whats the diff? (0)

Anonymous Coward | more than 4 years ago | (#30823864)

I can't pay my taxes in the "funny money" you guys use over there either....

I can, however, exchange your GBP's for USD's, much the same as I can exchange
gold, gas, or sticks of RAM for whatever form of payment is acceptable to those
I wish to pay.

Now that the world is connected in real time, we really are under a "one world currency" -
the unit of that currency is "value"

Sweet! (5, Funny)

Reason58 (775044) | more than 4 years ago | (#30822346)

Every time you die in-game you can write off the armor repair costs on your taxes!

Re:Sweet! (2, Interesting)

JoshuaZ (1134087) | more than 4 years ago | (#30822442)

I don't know what the S. Korean laws are but in the United States and many other countries gambling losses can be be written off except to cover taxes on gambling gains. There's actually been some complicated discussion about how this applies to professional poker (whether it is a game of skill, and thus a sport or luck based enough to be considered just a form of gamblings). One could potentially make an argument that games like this are close enough to gambling that they would be covered by such laws. I wouldn't be convinced by that argument but given that part of the logic of such laws is to discourage behavior that is seen as potentially addictive, a similar law might make sense here (assuming you consider the laws about gambling losses to be reasonable). Regardless, if they were taxing your in-game gains, you could at minimum probably write off the monthly subscription fee for the game. (Disclaimer: IANAL)

Re:Sweet! (0)

Anonymous Coward | more than 4 years ago | (#30823082)

United States and many other countries gambling losses can be be written off except to cover taxes on gambling gains
 
Minor correction for you... gambling losses can only be written off to cover taxes on gambling gains.
 
Basically, you can only write off losses for an amount equal to or less than your gambling winnings. So, no losing $10K and taking it off your taxes. That is, unless the $10K in losses offsets your $10K in reported winnings. ;)

Re:Sweet! (0)

Anonymous Coward | more than 4 years ago | (#30822948)

And you can retire at LVL 65.

Re:Sweet! (2, Funny)

undecim (1237470) | more than 4 years ago | (#30823218)

I'm sure there are many quests in various MMOs that count as charitable donations

Re:Sweet! (1)

PGOER (1333025) | more than 4 years ago | (#30823314)

Does this mean I can write off my time in the virtual brothels... er... I mean, massage therrapests? Will I have to claim the +50 gold pieces as income? Where do I fill that in on the W2 form? I think my next character is going to be 10th LVL Accountant.

What implications will this have for the Won? (2, Insightful)

suso (153703) | more than 4 years ago | (#30822348)

I wonder if this will make the value of the South Korean Won drop. Because it would almost make it possible to print money. Of course I guess you'd just need to value different game's currencies differently and then have published exchange rates. Its interesting.

Re:What implications will this have for the Won? (3, Insightful)

nedlohs (1335013) | more than 4 years ago | (#30822504)

No more than the ability of the Zimbabwe government to print Zimbabwe dollars, or the Chinese to print yuans, or the US to print US dollars does.

In other words, none at all, if the game currency is "printed" then the exchange rate will devalue it - just like already happens in every MMO game I've seen.

Re:What implications will this have for the Won? (1)

wizardforce (1005805) | more than 4 years ago | (#30822514)

No. If the in game currency supplu increases, its value exchanged relative to the Won or any other currency for that matter, goes down. Printing more in game currency does not decrease the value of other currencies.

Re:What implications will this have for the Won? (1)

suso (153703) | more than 4 years ago | (#30822936)

Yes, this is the way it should work, but what happens if the market isn't saturated with traders? There may end up being a delay between the supply and the exchange price. If market data isn't published by game companies or whatever and there is nothing controlling the game company from making more money in game (a gold standard or serious regulation). I guess currencies are exchanged like stocks are though, where the price is controlled by the buyers willingness to buy it or not. So I guess if they saw a flood of virtual currency then it would automatically adjust the price.

But currencies can be exchanged off the trading floor, yes?

Re:What implications will this have for the Won? (1)

wizardforce (1005805) | more than 4 years ago | (#30822990)

In either case, if someone found a way to print off in game currency like mad, then it would be outright fraud and the whole ponzi scheme would collapse immediately. The in game currency is little different than any other currency so there isn't much that makes it logical to single out this system specifically.

Re:What implications will this have for the Won? (1)

suso (153703) | more than 4 years ago | (#30823070)

I'm not thinking of someone who wants to "cheat" and get a bunch of in game currency, I'm more thinking of what will happen when a bunch of people start making their own games to print their own virtual currency. I suppose its just like penny stocks. I'm mostly just thinking aloud.

Re:What implications will this have for the Won? (1)

Dr. Spork (142693) | more than 4 years ago | (#30822636)

Yeah, it's just like that time when the Dollar tanked when Zimbabwe started printing those hundred million dollar bills [typepad.com] ? Oh wait, except that didn't happen at all. (Hint: nobody even suggested that there would be a fixed exchange rate between virtual currency and the Won.)

Re:What implications will this have for the Won? (1)

DeadPixels (1391907) | more than 4 years ago | (#30822756)

The only way I could see this having an impact was if a game developer decided to purposely screw with the in-game economy by causing massive inflation or something similar, and this would probably only impact the Won if it was a game that had enough people trading or paying "Real Money" for the virtual currency.

If you manage to somehow obtain 500 million in virtual currency, you could theoretically sell it all to customers. However, that's no different than what the company that makes the game is doing, and they're not causing the Won to devalue.

Plus, even if someone does make money off of the sale of virtual currency, they're still getting it in Won and then they're likely spending that Won in South Korea, but now on non-virtual products and services.

I still think it's a little silly to pay money for virtual currency, but whatever floats your boat, I guess.

sounds like another case of.. (0)

Anonymous Coward | more than 4 years ago | (#30823850)

Koreans trying to be clever but not very..it could create a credit bubble, whereby many people are caught holding aden and other in-game currency.
If Lineage suddenly went out of fashion or another game swept in and became very popular, you'd have a lot of people rushing to sell in-game currency in general, which could even have economic knock-on effects, particularly mp3 players and hand-held gadgets that are popular amongst mmorpg players.

If this remains the case (3, Informative)

JoshuaZ (1134087) | more than 4 years ago | (#30822366)

They need to do better jobs keeping track of currency levels in different games. As virtual currency becomes more common in game settings, better cryptography needs to be used to make sure that people don't change the numbers. Similarly, there becomes issues with income taxes and the like. In the long run we should probably all switch to cryptographically anonymous currency anyways which can be easily implemented using blind signatures http://en.wikipedia.org/wiki/Blind_signature [wikipedia.org] so that even the bankers don't know who used which bills for which transactions. Unfortunately, many large institutions (such as governments) will likely resist such systems because they lead to a substantial loss of control.

Re:If this remains the case (1)

nedlohs (1335013) | more than 4 years ago | (#30822566)

Why?

There's nothing different between someone sticking bugger numbers into their in-game currency store and the US government mailing "stimulus checks" to people.

It doesn't effect anything other than the currency involved.

Re:If this remains the case (1)

JoshuaZ (1134087) | more than 4 years ago | (#30822592)

The concern isn't a currency injection of that sort. The concern is that hackers or the like increasing their currency levels then becomes effectively identical to counterfeiting. Or worse, someone might alter how much currency you have in a game, back date the amount, and then report you to the government for underreporting on your taxes. Without better cryptography and better security in general, this would potentially become a massive headache.

Re:If this remains the case (1)

KitsuneSoftware (999119) | more than 4 years ago | (#30823648)

It's not a question of cryptography, it's a question of accounting. Consider:

  1. Alice creates a character in "Second World of Runes Online".
  2. Alice starts of with 10 gold pieces.
  3. Alice has a memory poking tool, and uses it to change that 10gp into (1<<31)gp.

If the game is written badly, it will let Alice get away with this. If the game is written properly, the server isn't listening to her client, and will only let her spend 10gp no matter what her client claims to have. For reasons of supply and demand, I am sure that every MMOG that has ever suffered from gold farmers is written properly in this regard.

The only thing I need to know is... (1)

YojimboJango (978350) | more than 4 years ago | (#30822444)

Can I pay my taxes with it?

RMTs? (-1, Offtopic)

Anonymous Coward | more than 4 years ago | (#30822450)

This could have sweeping implications for RMT operations the world over,

I don't see how this would have an effect on Registered Massage Therapists. Although it may have an effect for Unregistered Massage Therapists, especially since its Korea doing it.

Not really surprising (4, Insightful)

multipartmixed (163409) | more than 4 years ago | (#30822470)

Assuming the South Korean currency is not backed something solid (like gold), then their currency is just as virtual as online virtual currency -- it has no actual intrinsic value.

Re:Not really surprising (1)

lgw (121541) | more than 4 years ago | (#30822832)

All fiat currencies worth mentioning have great intrinsic value: you can use them to pay your taxes. When a government stops accepting it's own currency as tax payment, the government is usually on its way out (it will be interesting to see how this plays out in California with the Cali government paying bills with IOUs that it won't accept as payment).

Total federal taxes paid in America are something absurd like 20% of GDP (it's over 30% if you count all goverement taxes, IIRC), so that's some pretty solid intrinsic value.

Re:Not really surprising (1)

Mr2001 (90979) | more than 4 years ago | (#30823256)

Total federal taxes paid in America are something absurd like 20% of GDP

That's not absurd. Take a look at the worldwide figures [wikipedia.org] .

Re:Not really surprising (1)

Hadlock (143607) | more than 4 years ago | (#30823728)

30% is about average compared to European style countries. The main difference being that, they actually use the money and spend it on their citizens in visible ways, like health care and free (or nearly free) higher education.

Re:Not really surprising (5, Insightful)

pclminion (145572) | more than 4 years ago | (#30823008)

their currency is just as virtual as online virtual currency -- it has no actual intrinsic value.

Neither does real gold, unless you happen to need to make really really thin wires, or build something which is extremely reflective, or actually make use of gold's natural properties in some other way. Don't delude yourself. There is no such thing as "intrinsic value."

Re:Not really surprising (2, Insightful)

ground.zero.612 (1563557) | more than 4 years ago | (#30823442)

their currency is just as virtual as online virtual currency -- it has no actual intrinsic value.

Neither does real gold, unless you happen to need to make really really thin wires, or build something which is extremely reflective, or actually make use of gold's natural properties in some other way. Don't delude yourself. There is no such thing as "intrinsic value."

Well, don't delude yourself. Removing the human factor from the equation; nothing has value, intrinsic or otherwise. Gold is perhaps the only material known to man that has, since the beginning of recorded history, maintained a value. Many times during our history this value was greater than that of other men's lives. Just sayin'.

Re:Not really surprising (1)

Monkeedude1212 (1560403) | more than 4 years ago | (#30823178)

But all real world Currency has an exchange rate across the globe - which is all backed by gold.

You can print more money, which will depreciate the value of the currency, or you can stock it up - increasing its value, or alternately, you can buy or sell the "Gold" you hold to alter its worth that way.

Virtual Currency however, is an entirely different mix altogether. Only the government can print legal tender (legally). Virtual currency is dependant entirely on the games developers. They could decide to give you more "gold" for Bosses, Dailies, etc. They could decide to remove everyones in game gold, or the company could shut down, there are no legal ramifications to what they must do. There are going to have to be some additions to the EULA garnering that while Virtual currency equals real money, it does not, in any way, have to remain in your pockets, and at any time could be reclaimed by the developer, or forgotten entirely.

Since I'm sure most of the worlds gold buyers are NOT actually South Korean, and actually from foreign markets (Like the US) - it's removing the amount currency in the buyers market (essentially) while increasing the amount in South Korean markets.

Oh Hey, look, GoldFarmers.com just turned in 10,000 USD dollars for Korean currency, now the treasury has less, so the Korean Dollar goes up. Guess what, the US Treasury still has the same amount.

Very smart move by South Korea - dangerous to the western world.

Re:Not really surprising (1)

hitmark (640295) | more than 4 years ago | (#30823378)

funny thing is, most of the money printing these days is as an effect of lending, not out and out printing.

Re:Not really surprising (0)

Anonymous Coward | more than 4 years ago | (#30823464)

Gold is virtually worthless. The real(industrial) demand is really low, gold is recyclable, and we have a lot "just sitting there".
The real value of gold should be based of the cost of recycling it, not "OMG, it look nice and people are investing in it!"

Guaranteed by Whom? (3, Interesting)

Tisha_AH (600987) | more than 4 years ago | (#30822474)

Given that the "currency" (units, seashells, whatever) have some intrinsic value in that you put labor into the creation of some sort of work product there needs to be a guarantee of the currency, someone or some-thing (government, bank, etc...) who backs up that currency with assets. Also an exchange would need to be established to control the conversion of this new currency into other units. If you do not have these mechanisms in place then your new currency is as valuable as wampum was to the American Indians.

When the European powers moved into the Americas they discovered that wampum was being used as a currency for the exchange of services and commodities and as a means of having portable wealth. The colonies, companies and fur-trappers would bring in mass-produced glass beads from Europe where they had very little value and exchange these to the Indians for furs, food and land. Within a few decades the entire system of wampum devalued itself and had collapsed.

Virtual currency is just 1's and 0's on a computer (our real currency is more like that now than it ever was). How easy would it be to create the equivalent of glass beads in our virtual wampum on-line society?

Re:Guaranteed by Whom? (0)

Anonymous Coward | more than 4 years ago | (#30822772)

Re:Guaranteed by Whom? (0)

Anonymous Coward | more than 4 years ago | (#30823612)

Virtual currency is just 1's and 0's on a computer (our real currency is more like that now than it ever was). How easy would it be to create the equivalent of glass beads in our virtual wampum on-line society?

If you create a lot of virtual glass beads and then try to exchange them for real-world currency, you end up with a supply-demand problem. Right now, that is essentially an unregulated retail market: gold farmers post whatever price they're willing to sell gold, and gold buyers either accept or reject the price. In that market, if a gold farmer find an exploit or other means of printing virtual glass beads, he can convert them to real-world cash wherever his monopoly will allow. By declaring that this virtual currency purchase is essentially identical to currency exchange, SK transfers it from a retail, bubble-gum-like market to a regulated, public, exchange-based market. That means trades will be bid & negotiated, with the results posted publicly, and there will be much more dynamic competition between both gold-sellers and gold-buyers. In that case, finding an exploit to make free gold would rapidly crush the market and make said effortless currency worthless. Same as the US printing dollars to pay off its debts.

Presumably, it means there will be a WoW-Gold:SKW entry added to all the forex markets. It is to laugh.

So that means WoW gold is legal tender? (2, Insightful)

Opportunist (166417) | more than 4 years ago | (#30822482)

I can go to a bank in South Korea and exchange my WoW gold for Won? No? Then how about EvE's ISK? No?

Why could that be? Maybe because the issuers of that "currency" are companies, not countries, and no country on this planet backs it with its real economy? And "forging" it is about as trivial as changing a few lines in a database because no game company follows banking standards concerning security (not to mention auditing)? And let's not talk about Blizzard or CCP letting those printing presses roll whenever they feel like without any oversight from any kind of national bank.

In short, the whole deal is BS squared.

Re:So that means WoW gold is legal tender? (3, Interesting)

Dr. Spork (142693) | more than 4 years ago | (#30822836)

Actually, the way I read the decision, the answer to your question may be "yes." It does seem like the decision implies that non-state-backed currency is still a legal exchangeable currency. So yes, Korean banks might very well start publishing daily WoW-Won exchange rates. I think you're catching on to why this is an interesting development.

Regarding the risks to holders of a company-backed rather than a state-backed currency, I don't really see the big deal. I trust Blizzard much more than I would trust the national bank of Zimbabwe [typepad.com] , and yet Zimbabwe dollars are traded in international markets and exchange rates are published. According to Oanda's currency converter, a million Zimbabwe Dollars will exchange for exactly US$2,702.70 today. Why are we treating WoW gold differently? It can't be because we trust Mugabe's financial wizards more than we trust Blizzard.

Re:So that means WoW gold is legal tender? (2, Interesting)

lgw (121541) | more than 4 years ago | (#30822986)

The supply of the US Dollar is controlled by the Federal Reserve, a private company. It's directors are appointed by the US government, but, still, private company. The US has been pretty bad about "letting the presses roll" over the past year or so - exchange markets sort that out very quickly. These virtual currencies are more stable than a great many national currencies. EvE's ISK supply is overseen by economic professionals (a smart move by the game company!), also more than can be said for some countries.

That's the thing about money - it's all pretty much BS, but it works anyway.

Re:So that means WoW gold is legal tender? (2, Insightful)

Anonymous Coward | more than 4 years ago | (#30823042)

I think what we need here is a car analogy. A Ford truck is not legal tender, however it has Real value. This court decision just says that in game currency is like Ford trucks. It has real value - it is not legal tender - but because it has value the law has a basis for decisions involving these properties. So any transaction or theft involving in game 'currencies' is handled the same as transaction or theft involving Ford trucks.

Pay up (1)

G2GAlone (1600001) | more than 4 years ago | (#30822484)

South Korea is going to have to pay for this mistake...

Criminal charges for "steeling" gold? (0)

Anonymous Coward | more than 4 years ago | (#30822544)

So hacking an account and taking someones gold is now a criminal act the same as mugging is? Cool!

doing it In game may fall under gambling laws (0)

Anonymous Coward | more than 4 years ago | (#30823848)

Doing it In game may fall under gambling laws / other laws

Will the NGC have to take a look at the WOW or any game like it source code?

how about laws covering carnival game?

arcade / arcade redemption law? in NJ there are a few laws covering skill games / redemption / claw games that they have NJ roms vs the roms for the same game in other places.

And that is before any TAX / income laws as well.

Clueless gamer blog gets it wrong (5, Informative)

Animats (122034) | more than 4 years ago | (#30822564)

The gamer blog has it wrong, the article poster didn't help, and the Slashdot "editors" blew it as usual. Read the article in JoongAng Daily [joins.com] (which they offer in English). The key issue here is that online gambling is illegal in Korea, and two game players were charged criminally for making money from an online game. The Supreme Court of Korea ruled that they were not gambling, so they don't get fined.

This decision doesn't affect relationships between players and game operators. It's not about EULA enforceability or property rights. It's a criminal law issue. If you trade game currency, you're not going to be fined or go to jail in Korea. Whether a game site can ban you is a separate issue.

Re:Clueless gamer blog gets it wrong (1)

PGOER (1333025) | more than 4 years ago | (#30823482)

Terrorist!! How dare you question the integrity of Slashdot editors!! If they say there are WMDs in the hands of South Koreans we must believe them, and declare war on the internet. I'm sure your comment is totaly valid, but I don't have time to research the background of these articals.

MARINA. (2, Funny)

Qui-Gon Jinn (53730) | more than 4 years ago | (#30822628)

Transfer all your WoW gold to me, for me.

What about FOREX? (1)

tacokill (531275) | more than 4 years ago | (#30822814)

So I can trade these currencies on any one of a number of currency exchanges, such as Forex? (/sarchasm)

I am recalling all of the statutory and regulatory requirements for currency traders. It goes without saying, they are substantial. Does that mean each player in the game needs to be regulated as a currency trader and follow the same regulatory requirements? What if you have multiple accounts? Does that mean you are now a hedge fund with a whole new set of regs? Can I go short on these currencies? If so, how would the mechanics of that work? etc, etc, etc....

Lastly, what safeguards are in place to make sure it is a fair marketplace and noone can "corner the market" or otherwise manipulate it in an illegal way?

With about 5 minutes of armchair regulatory and legal analysis I can already see this is going to have significant unintended consequences.
(Bonus points: Currency traders --- what other regs do you have to follow that would not work on a virtual currency in a game?)

Re:What about FOREX? (1)

lgw (121541) | more than 4 years ago | (#30823130)

Game currencies are better modeled as commodities than currencies. But there is a robust black market in thier trade, between the various specialty companies in the "gold farming" industry. And you probably could go short, just not with a standardized contract.

Scrip? (1)

pete-classic (75983) | more than 4 years ago | (#30822838)

Is this different than scrip [wikipedia.org] in any meaningful way?

-Peter

"Taxes" ? dont be fools. (1)

unity100 (970058) | more than 4 years ago | (#30822840)

taxes were always there. it didnt matter zit if you converted cash into something from virtual currency or from sale of your old underwear. as soon as you have incurred income, it was taxable.

Where does this lead? (0)

Anonymous Coward | more than 4 years ago | (#30822846)

If virtual currency now has value, a player vs player encounter where you steal someone's gold can land you in jail now for theft?
I can't wait until they give in game characters legal status and start charging people with murder... (though someone founding PETM [People for the Ethical Treatment of Monsters] might be amusing).

This is why realism in games continues to be a bad idea. The next thing you know, we'll be paying real taxes on our purchases of "Gold Spear+1".

Money for nothing.... (1)

realsilly (186931) | more than 4 years ago | (#30822848)

Virtual = Not real.

From http://dictionary.reference.com/browse/virtual [reference.com]
(Just one of many definitions)
Existing or resulting in essence or effect though not in actual fact, form, or name: the virtual extinction of the buffalo.

Scenario
You lend person A $20.00, they repay you with electronic credits or virtual gaming money. What if you don't play electronic games? The owner of the game company doesn't give you the physical $20.00 for relinquishing the electronic credits or electronic gaming money. This will not bode well....

Re:Money for nothing.... (0)

Anonymous Coward | more than 4 years ago | (#30823090)

Chicks for free?

Re:Money for nothing.... (0)

Anonymous Coward | more than 4 years ago | (#30823774)

bad example - what if your local trade is using seashells? 20 bucks printed on paper are equally worthless if you don't play in the same economic sandbox.

PVP and thieving... (3, Funny)

$1uck (710826) | more than 4 years ago | (#30822966)

So in a game such as EQ (the only MMO I've played) you could kill people (on pvp servers) and take their gold. Clearly this is part of the game, but is it something you could be arrested for now?

Re:PVP and thieving... (2, Insightful)

Culture20 (968837) | more than 4 years ago | (#30823490)

So in a game such as EQ (the only MMO I've played) you could kill people (on pvp servers) and take their gold. Clearly this is part of the game, but is it something you could be arrested for now?

You're marked as "funny", but I think it's a valid question. If I play a game of basketball with someone, and steal their wallet, that's a crime. How's that different than MMORPG gold theft; because the rules say stealing is okay? Then how is that different from a casino, where "skill" or luck allows either one party to take the money from the other party? Sounds like gambling to me, which is illegal in SK.

Re:PVP and thieving... (1)

syousef (465911) | more than 4 years ago | (#30823530)

So in a game such as EQ (the only MMO I've played) you could kill people (on pvp servers) and take their gold. Clearly this is part of the game, but is it something you could be arrested for now?

Only if you don't pay your "I just killed me a player" tax.

Re:PVP and thieving... (1)

KWolfe81 (1593877) | more than 4 years ago | (#30823720)

Yup. So in the future, feel free to kill people online, just make sure you don't rob from their cold dead corpses...

Misinterpretation (0)

Anonymous Coward | more than 4 years ago | (#30823352)

Massively is reporting that the South Korean Supreme Court has stated that virtual currency is the equivalent of real-world money.

Um no they didn't...

Dependents bought items and in-game currency then resold those items for cash. The gov got pissed and said it was gambling then fined the 2 guys. The court then ruled that they were not gambling but earning cash by selling/trading a good that held VALUE. This has more to do w/ virtual items/goods having a VALUE and less to do w/ a transfer of currency. I wouldn't go as far to say that Aden = $$$ but more to the likes of Aden = VALUE kind of like how a car has a value, but is not directly $$$, it's a good and not a currency.

Car analogy for the /. crowd...

Poor analogy... (1)

Pollux (102520) | more than 4 years ago | (#30823432)

The core there is that selling in-game currency for real money is essentially just an exchange of currency and perfectly legal in South Korea.

Applying that logic domestically, does that mean that I can mail all my old arcade tokens to the IRS to help pay my taxes?

I Pay All of My Bills...... (0)

Anonymous Coward | more than 4 years ago | (#30823564)

with wii points.

Monopoly Money (0)

Anonymous Coward | more than 4 years ago | (#30823596)

Does anyone know the current exchange rate?

Re:Monopoly Money (1)

rhpenguin (655576) | more than 4 years ago | (#30823754)

According to Bank Of Canada the Canadian dollar is worth $0.97USD.

Let's launder money (1)

Yuioup (452151) | more than 4 years ago | (#30823630)

INSERT INTO Wallet (amount) VALUES (1000000000.00)
GO

UPDATE Player SET Status = ReallyRich
GO

My virtual currency (1)

AP31R0N (723649) | more than 4 years ago | (#30823736)

i wrote a thing about an international virtual currency. The basis was 1 hour of unskilled labor would be 100 credits. Each credit has an entry in the database as to who owns it at the moment. Small transactions could be done with a private/public key transaction. Bigger transactions require more authentication.

The serial of a credit would be 128b. The first eight being the date of it's release into the system in CRC32, leaving 96b for the rest of the serial. That gives us an insane amount of credits even if the population hit 12B. The date would be a quick means to verify that the number of the credit someone is trying to spend isn't some random number.

Money enters the system by an employer and employee agreeing to do the transaction in this system for the minimum wage. Since money enters the system in batches, it could keep value tightly controlled. It would also address some problems with gulfs in currency/labor values ($1 doesn't buy shit here, but could buy a big meal elsewhere). People who are to be paid more than minimum wage must be paid in a transaction of already release currency.

It would be purely virtual and transactions would be tracked, making it less useful for criminal enterprise.

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