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Is Facebook Becoming a Central Bank?

Soulskill posted more than 2 years ago | from the while-everyone-was-worrying-about-bitcoin dept.

Facebook 232

wasimkadak sends this quote from an article at Forbes: "Facebook's 27-year-old founder, Mark Zuckerberg, isn't usually mentioned in the same breath as Ben Bernanke, the 58-year-old head of the Federal Reserve. But Facebook's early adventures in the money-creating business are going well enough that the central-bank comparison gets tempting. ... Initially, the Credits-based economy was confined to the virtual world’s trifles. Credits could be spent to buy imaginary gold bars for aficionados of Mafia Wars, or bouquets of virtual flowers for birthday postings on friends’ Facebook accounts. This new form of digital money was cute but essentially useless for mainstream activities. Lately Credits have become more intriguing. Warner Brothers this summer offered movie-goers a chance to watch Harry Potter and The Dark Knight for 30 Credits apiece. Miramax and Paramount countered with film-viewing offers, too. In a provocative post this week on Inside Facebook, guest blogger Peter Vogel argues that Credits in the next few years will become more of a true currency. Facebook's 800 million worldwide users represent a lot of buying power. He figures Credits could evolve into commercial mainstays for digital movies and music."

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Cash out early (5, Informative)

LostCluster (625375) | more than 2 years ago | (#38769994)

The history of the web is filled with play-online games for points that could be used for other things... but all crash in an inflationary spiral. Points are free, but the prizes offered are not and eventually the value falls below the "par value" the site originally had. Has anybody recently cashed out with GSN Oodles or Moola.com's Moola points?

Look I'm sure they'll only create a few extra (4, Funny)

Colin Smith (2679) | more than 2 years ago | (#38770262)

When they discover they can get stuff for free. Same way the US government has done.
 

Re:Look I'm sure they'll only create a few extra (2)

lightknight (213164) | more than 2 years ago | (#38770814)

Which is the importance of getting your contracts specified in a currency that they can't print. For US contracts, get the money paid in Euros. For European contracts, get the money in Yen (or whatever Asian currency you prefer), and for Asian contracts, get the money paid in US dollars.

The government will call their brethren overseas to trade their currency for the one specified in your contract. Get a general idea of when they make that transaction, and you can make some more money -> I call it fractional investing. The people in the government who signed a contract with you have been playing the money printing game since forever, so play them at their own game, and hit them up for extra cash at every milestone. A single $30 million dollar contract can, with the right information, be worth over $250 million.

As the saying goes, we will pretend to work as they pretend to pay us. But then, I can understand their approach -> as the Finance majors have pointed out to us on many occasions, the value of a currency is entirely in your head. And I can actually understand now why these people are so desperate to spend their dollars -> no one knows when this house of cards will come tumbling down, which makes trading paper for hard assets a good idea. With a currency that is rapidly depreciating, and is on questionable grounds, spending it immediately would be a good idea.

Re:Look I'm sure they'll only create a few extra (5, Insightful)

postbigbang (761081) | more than 2 years ago | (#38770982)

Ummm, no. The finance majors don't say that. Nor do the economists. There is chutpzah, there is subterfuge, and there are varying indicators, but it's not pretend.

When a letter of credit clears, there's a complex set of events that's spawned. Lots of people get paid. Sometimes they get paid in differing currencies, but they get paid. When the Russians had their post Soviet-breakup crunch, maybe they paid in potatoes, but they paid. Trading is something humans do well, and there is some predictability beyond "pretend".

Re:Cash out early (0)

Anonymous Coward | more than 2 years ago | (#38770290)

I'm still holding onto Beenz until I can find someone who will give me a good deal for Flooz. So far, Whoopi Goldberg hasn't returned my calls.

Re:Cash out early (1)

ackthpt (218170) | more than 2 years ago | (#38770364)

I'm still holding onto Beenz until I can find someone who will give me a good deal for Flooz. So far, Whoopi Goldberg hasn't returned my calls.

You could always cash it all in and get some slood.

Assuming you can find a civilisation advanced enough to have discovered it by now

Re:Cash out early (1)

tragedy (27079) | more than 2 years ago | (#38770774)

You don't have to be an advanced civilization to have discovered slood. It's easier to discover than fire, and only marginally harder to discover than water.

Re:Cash out early (0)

religious freak (1005821) | more than 2 years ago | (#38770794)

Or airline miles.
Yes, one should save money but spend any type of "credit" or "point" as quickly as possible.

Re:Cash out early (3, Informative)

Bill, Shooter of Bul (629286) | more than 2 years ago | (#38770860)

I actually cashed out $10 worth of cybergold, back in 1998. That was the minimum amount you could cash in, never got more than 10 cybergold cents after that. Originally they offered points for surveys and adviews, but after I cashed out it was changed to more of a rewards program for shopping at certain sites and incentive to apply for credit cards.

And, with perfect investing prowess... (3, Insightful)

NotQuiteReal (608241) | more than 2 years ago | (#38771028)

That $10 in 1998 invested in HANS (the Hansens natural soda company, at the IPO) turned into over $2,000 before it was bought by MNST (Monster Bev co.) and tripled from there.

Cool - your $10 in cybergold could be about 6 grand now, if you played your cards right!

Of course, if you left that tenner in your coat pocket, you can only get about $7.50 1998 equivalent worth of stuff...

Re:And, with perfect investing prowess... (2)

CastrTroy (595695) | more than 2 years ago | (#38771208)

Depends what you are buying. You can get a much better calculator for $10.00 now than you cold in 1998. For $10 you could get a 4 GB USB stick. Do you know how many floppy disks you would have to buy to get 4 GB. A lot more than $10 worth. Sure if you're buying food you might get less, but many things have come down in price.

Re:And, with perfect investing prowess... (4, Insightful)

Bill, Shooter of Bul (629286) | more than 2 years ago | (#38771570)

Left it in my coat pocket? Heck no, I was a college kid back then. It was the end of the school year, and I was pretty much broke. That $10 was enough to buy food for two weeks!

Re:And, with perfect investing prowess... (2)

billcopc (196330) | more than 2 years ago | (#38771630)

Jack Daniel's isn't food, brah.

Re:Cash out early (4, Informative)

GuruBuckaroo (833982) | more than 2 years ago | (#38770886)

SecondLife's Linden Dollar, exchangeable for real cash, has maintained its value remarkably well, at roughly L$265/US$1, for the last 5 years.

Re:Cash out early (1)

NotQuiteReal (608241) | more than 2 years ago | (#38771232)

Define "real cash"?

Everyone says "you can't eat gold", but it IS a fungible commodity... a handy point of reference is that, in say 1960, a 50 cent piece would by you a nice lunch.

In 2012 that same (90% silver) coin will still buy you lunch, since it is valued at over $11...

I would bet in another 50 years that Ben Franklin coin will STILL be worth lunch money, but $11 worth of "folding money*" (usd, pounds or euros) will not.

* note that "silver certificates" stopped being honored by the US Govt in 1968, even though the money says right on it that that they are worth the printed amound "in silver payable to bearer on demand" - Not worth the paper it's printed on... indeed.

silver certificates (1)

KingAlanI (1270538) | more than 2 years ago | (#38771524)

I suppose it doesn't make sense to keep an offer going indefinitely, the US government did give plenty of warning before they stopped redeeming them, and many people did redeem them towards the end.
That and any other old US currency is still legal tender at face value
Of course, the metal coins kept value in the collector/bullion market in a way that paper certificates didn't.

Re:Cash out early (4, Insightful)

rasmusbr (2186518) | more than 2 years ago | (#38771548)

The real value of silver has undergone drastic changes in the past, sometimes because of enormous new finds, sometimes for other reasons.

It's probably better to use "a nice lunch" (as in a good but unpretentious restaurant meal of tasty, nutritious, healthful food, containing about 500 kcal) as your price reference. A meal at a restaurant is both a product and a service, and it contains a range of raw materials. Since the restaurant needs to pay real estate costs it also reflects the housing market.

Re:Cash out early (-1)

Anonymous Coward | more than 2 years ago | (#38771696)

What kind of utopic city do you live in ?

Over here, a resturant's price is only representative of how many overpaid corporate suckers eat there. Ingredients and operating costs are not a factor, my friggin' money pit of a wife could run a profitable restaurant with her eyes closed. People here will pay through the nose for food you wouldn't even serve in a prison.

Small pizza ? $20
Cheeseburger with fries ? $17
Can of pepsi ? $2.50
Pint of beer ? $9

These goddamned halfbreeds only open for lunch, serve the most lackluster cardboard-flavored frozen food, and yet they're the ones with the fucking Benz.

Re:Cash out early (2)

cgenman (325138) | more than 2 years ago | (#38771190)

I think you're confused. You buy Facebook credits with real money, you don't earn them. They're a secondary medium of exchange, like Microsoft points on Xbox. You spend real money on them. You can't give them to friends, or use them to buy soda, etc. They're just a convenient way of not realizing that you're spending dollars.

Re:Cash out early (2)

rtb61 (674572) | more than 2 years ago | (#38771522)

So basically Facebook credits are a free loan that the unaware provide to Facebook. So does Facebook ever pay them back or are they a one way thing?

Re:Cash out early (2)

Zebai (979227) | more than 2 years ago | (#38771252)

Points aren't necessarily free, points take time to earn and time is money. Spend a day earning points could be of equivalent value as spending a day at a job earning real money with just a difference in currency (& currency value) . You are right though this is nothing new with facebook you can make this comparison to almost any other online venture, warcraft being one of the most popular where there are people exchanging virtual for physical currency. I imagine one day we will not even distinguish between the two and just consider them no different than the difference between dollar and euro. I have a friend who has no problem at all with buying virtual currency with real currency, his point of view if it takes him a week to earn that currency by ingame methods but he can skip that whole week and buy it with a single day's worth of labor at his job then he buys it and then considers it profit and spends that week doing something else.

Re:Cash out early (1)

im_thatoneguy (819432) | more than 2 years ago | (#38771402)

I've always thought of it more like Microsoft Points. Less a reward and more of a micro-currency for buying things. I imagine any points awarded to players by games is paid for *directly* by Mafia Wars. Similarly Halo could theoretically give you MS points but it would come out of their sales.

Excuse me, kind Slashdot (-1)

Anonymous Coward | more than 2 years ago | (#38770020)

May I toungepunch you in the fartbox?

Re:Excuse me, kind Slashdot (-1)

Anonymous Coward | more than 2 years ago | (#38770454)

sure thing. Meet me in the far stall of the 2nd floor men's room.

Harry Potter and the Dark Knight? (-1)

Anonymous Coward | more than 2 years ago | (#38770048)

You know how I got these scars? Voldemort.

Bits are almost free (1, Interesting)

LostCluster (625375) | more than 2 years ago | (#38770078)

Interesting point that the main cost of music or movie is the "first copy"... duplication costs very little in the digital world. Seems like the movie industry are offering sequels to drive up interest in future movies.

Re:Bits are almost free (3, Insightful)

hedwards (940851) | more than 2 years ago | (#38770194)

No, they do sequels because they don't generally have to sell them. The industry knows who's going to go to see a sequel and how large that audience is and as a result is able to much more accurately gauge the prospects. They won't know whom it is precisely that will go or precisely how many, but they'll have it down pretty good in general.

That being said the studios are always looking for new ideas the big problem they tend to have is that only a fraction of a percent of the ideas they receive are actually worth filming and of those only a fraction of them are going to be memorable.

Re:Bits are almost free (1)

EdIII (1114411) | more than 2 years ago | (#38770816)

That logic does not explain Police Academy Six: We Can't Stop Making These Fucking Movies.

Your model does not fit the data. Try again.

Re:Bits are almost free (0)

Anonymous Coward | more than 2 years ago | (#38770940)

Low budget with midlevel revenues is a profitable business model. Viewers might not appreciate it, but as long as enough still view it, the studios will keep churning them out. Think about how long a reprieve we had from Rocky 5 to Rocky Balboa and how much of a quality difference there was between the later originals and the new edition.

Re:Bits are almost free (1)

EdIII (1114411) | more than 2 years ago | (#38770996)

It's funny you bring that up.

The first Rambo kicked ass. The last Rambo was fucking hard core. The stuff in the middle you don't even have to keep.

Re:Bits are almost free (1)

Bill, Shooter of Bul (629286) | more than 2 years ago | (#38770882)

I think LostCluster was suggesting a reason why the movie companies were offering those particular movies on facebook, rather than a more general motive for the creation of sequels of movies.

Not a true currency. (4, Informative)

TheNarrator (200498) | more than 2 years ago | (#38770090)

The mark of a true currency is that it can be used to pay U.S tax liabilities. For Americans at least, anything else is just, at best, a commodity subject to capital gains taxes. For example, if you buy gold coins, or facebook credits, and then sell them after their value has doubled you'll have to pay capital gains tax on the amount they appreciated against the dollar. if you barter the gold coins, or facebook credits, for services or goods you will have to pay taxes on that barter transaction in dollars. If the dollar appreciates in value against other currencies though, there is no capital gains tax to pay, even though your dollar might buy more.

Re:Not a true currency. (2)

hedwards (940851) | more than 2 years ago | (#38770222)

Not quite, I can't pay my US tax bill in RMB, AUD, Euros or CAD, but I can pay them with USD. It doesn't mean that those other currencies aren't any good, it means that to do something interesting with them I probably have to either convert them or move.

Things like MS' points are basically a way to get you to pay for something with fewer protections so that they have your money and you can't get it back.

Re:Not a true currency. (4, Insightful)

Geminii (954348) | more than 2 years ago | (#38770722)

If you can buy goods or services with a currency, and exchange those goods or services for US dollars (via eBay, Craigslist etc), then the currency is a de facto method of paying US tax liabilities.

Re:Not a true currency. (1)

NotQuiteReal (608241) | more than 2 years ago | (#38771114)

...a commodity subject to capital gains taxes. For example, if you buy gold coins, or facebook credits, and then sell them after their value has doubled you'll have to pay capital gains tax...

...a commodity subject to capital gains taxes. For example, if you buy gold coins, or facebook credits, and then sell them after their value has doubled you're supposed to pay capital gains tax...

Heh, just like that "use" tax you have been paying, in lieu of "sales tax" on those online purchases you make, you have been paying them, right? Sure the Tax Man seems to have won that round (starting this year, I think) - but, in general, "no records, no tax" is the general drift of human nature.

show me the money! (1)

vencs (1937504) | more than 2 years ago | (#38770096)

can I pay with s' stock to buy the credits?

Off-topic (-1, Offtopic)

Anonymous Coward | more than 2 years ago | (#38770102)

Can anyone recommend a new slashdot-type site, hopefully one run by individuals (like slashdot used to be in the CmdrTaco and Hemos days), and dealing with tech, rather than social media froth and global warming bullshit?

I've been on this site since before my 100k level account was registered and have a special place in my heart for it, but looking at the homepage, 8/10 of the stories are shite I don't care about. Maybe I'm getting old, but I don't think that's it.

I miss the trolls.. GNAA, Trollaxor, OOG THE CAVEMAN...

These days, all you can hope for is the odd story about something interesting, with ernest or intentionally-funny comments. None of the pizzaz of the olde days.

So, recommendations? Comments? Questions?

Fire away.

Re:Off-topic (-1)

Anonymous Coward | more than 2 years ago | (#38770128)

Don't let the door hit you on the way out?

Re:Off-topic (-1)

Anonymous Coward | more than 2 years ago | (#38770310)

Don't let the door hit you on the way out?

What kind of thing to say is that?

Ask an existential question, get a dismissive reply? Is that to be the new order of things? Once, I wouldn't have thought so. But now, I'm not surprised.

Re:Off-topic (1, Funny)

Bill, Shooter of Bul (629286) | more than 2 years ago | (#38770906)

Uhm, Hot grits and the horse you road in on, you Emac on windows viewing AOL using poopy pants!

Is that better?

Unfortunately I only troll at a 2nd grade level.

Re:Off-topic (0)

Bucky24 (1943328) | more than 2 years ago | (#38770354)

I strongly suspect that the changing article types are due to a changing demographic of people who visit the site. As it says "this site is powered by your submissions". However, I can understand that it didn't used to be this way (I have only been here for about a year so I wouldn't know). Why not create that "new slashdot-type site" yourself? I'd certainly visit it.

Re:Off-topic (-1)

Anonymous Coward | more than 2 years ago | (#38771408)

We've all certainly seen this type of site elsewhere in the past 10 or so year. The problem is critical mass.
Plenty of sites, not enough attention to overtake slashdot quality-wise; but enough attention that the trolls, spammers and useless posters take over... sounds like what I hear Digg became --I never used hung out there much.

We have Kuroshin, which I have virtually forgotten exists, I think I even got an account there once... Copycat sites for other languages are formed but aren't very useful to US: barraPunto and Slashdot.jp --though,there was some jp crossposting into english during last year's disaster. Another problem is that just like myspace vs. Facebook, the longer something is in place, the more awesome its successor must be in order to "win".

Re:Off-topic (0)

larry bagina (561269) | more than 2 years ago | (#38770574)

Can anyone recommend a new slashdot-type site, hopefully one run by individuals (like slashdot used to be in the CmdrTaco and Hemos days), and dealing with tech, rather than social media froth and global warming bullshit?

hehe, reminds me of an old joke:

Q: Is CmdrTaco gay?
A: Hemos certainly is!

But seriously, I remember reading slashdot back in 99 or 98. Hell, I didn't realize until my first post that Anonymous Coward was the guest account and not a an incredibly stupid individual. I don't want to put on the rose-colored glasses, but I feel like slashdot has declined. Part of that is that linux is now more mainstream and mature so development on cool shit has stagnated (and don't forget endless September), but there's enough cool shit happening that we don't need "Is $x?" (where $x is retardedly stupid) stories or garbage like that.

Farming (0)

Anonymous Coward | more than 2 years ago | (#38770110)

Roll on the bots to earn credits.

Can I interest you into a trade? (1)

bigredradio (631970) | more than 2 years ago | (#38770116)

Can I trade my Bitcoins for Credits? I also have some vintage CueCat rewards points?

No. No, no, no, no, no, no. (0)

Anonymous Coward | more than 2 years ago | (#38770130)

I don't even want to begin to imagine the nightmare of a profit driven private company being able to coin their own money.

It's a fancy gift card, not money.

(Also, WHY would another private company be willing to trade goods/services in exchange for your faerie's gold?)

Re:No. No, no, no, no, no, no. (1)

Bucky24 (1943328) | more than 2 years ago | (#38770400)

Also, WHY would another private company be willing to trade goods/services in exchange for your faerie's gold?

Same reason that any other company is willing to trade good/services for pieces of green paper-there's an implied idea that there is some wealth behind that paper that makes it worth taking. Facebook credits, AFAIK, are backed by real money (the money that the user spent to acquire them), and I imagine if a user spends them on a game or something the developer of said game pockets some money for that transaction.

You use money that is a number in a database to buy more fake money that is another number in a database, then use that fake money to buy items that are simply more items in a database. Ironic that none of this is even real but the labor we put into earning that money in the first place. (This paragraph has nothing to do with the rest of the comment, just something that I thought while writing it).

Re:No. No, no, no, no, no, no. (3, Interesting)

Spottywot (1910658) | more than 2 years ago | (#38770484)

We all use faerie gold already, the reason it works is not because it's worth anything, it's because enough people believe it's worth something. Money hasn't been worth anything since the gold standard was dropped. While I don't believe that FB money will ever take off in a meaningful way I also thought the Spice Girls were going to be a one hit wonder. There's no accounting for taste.

Re:No. No, no, no, no, no, no. (5, Insightful)

tragedy (27079) | more than 2 years ago | (#38770824)

You're half right. Money hasn't been worth anything since before the gold standard was dropped. Even gold is fiat currency. Money, including precious metal coinage, is just tokens meant to simplify complex barter arrangements. It only has value based on people's faith in its value.

Re:No. No, no, no, no, no, no. (4, Insightful)

arose (644256) | more than 2 years ago | (#38771180)

It only has value based on people's faith in its value.

Or, more precisely, by their willingness to accept it as payment. Recursively. Acceptance all the way down.

Re:No. No, no, no, no, no, no. (1)

tragedy (27079) | more than 2 years ago | (#38771612)

That's a pretty good way of putting it.

Re:No. No, no, no, no, no, no. (0)

Anonymous Coward | more than 2 years ago | (#38771060)

Shiny rocks are a much better currency than paper. At least with shiny rocks the pie can be constrained and individuals can increase their slice of the pie at the cost of everyone else. Yes, great idea.

Re:No. No, no, no, no, no, no. (1)

ObsessiveMathsFreak (773371) | more than 2 years ago | (#38771124)

I don't even want to begin to imagine the nightmare of a profit driven private company being able to coin their own money.

I hate to break it to you, but privately owned banks do this in almost every country in the world, every single minute of every single day.

All banks are licensed, by government, to create credit out of thin air. This is subject to very loose restrictions about reserves, but in reality, frat-house rules apply across the board and you can do almost anything you like as long as you've got enough chuzpah to back it up.

And if you think I'm making this up, or exaggerating in any way, do yourself a favour and never, ever read up about the "shadow" banking system of repos, securitization , CDOs, CDSs, and good old fashioned fraud.

The reality of today's banking system is worse than any nightmare.

Credits? (0)

Anonymous Coward | more than 2 years ago | (#38770136)

What are these Credits of which you speak?

Seriously, FB isn't getting my any of my financial information. Not even telling them who I bank with with a "Like" or where I currently work with a "Like" either.

Kind of like bitcoins. (1)

Anonymous Coward | more than 2 years ago | (#38770148)

Except it has more confidence in it, and it's more stable.

Re:Kind of like bitcoins. (2)

icebraining (1313345) | more than 2 years ago | (#38770314)

Except it's not. It's controlled by a single entity, which can "print" all it wants and even revogate someone's credits.

It's much more like dollars than Bitcoins.

Re:Kind of like bitcoins. (1)

lightknight (213164) | more than 2 years ago | (#38770846)

Exactly. Facebook Credits = Flooz.

Wired article from a few years ago (1)

MrDoh! (71235) | more than 2 years ago | (#38770218)

Predicted all of this, and explained very clearly why as soon as there's some traction, and the ability to move/take cash out, the existing banks/authorities will be down on their heads like a weight of very heavy things.
Why Bitcoin was so scary for a time.

These things offer wonderful room for money laundering.

Re:Wired article from a few years ago (3, Insightful)

ackthpt (218170) | more than 2 years ago | (#38770340)

Predicted all of this, and explained very clearly why as soon as there's some traction, and the ability to move/take cash out, the existing banks/authorities will be down on their heads like a weight of very heavy things.
Why Bitcoin was so scary for a time.

These things offer wonderful room for money laundering.

I dunno. I see PayPal and eBay as a cartel which should be broken up, but nodbody has done anything about it, yet. All right out there in the open.

! It appears you are attempting to receive payment by means other than PayPal which is not allowed, please correct your listing so we get an even bigger cut of your sale

Re:Wired article from a few years ago (0)

Anonymous Coward | more than 2 years ago | (#38771686)

Conducting trade in a currency other than your country's currency is bad for your sovereignty (even if your country's currency is an inflated worthless steaming pile).
 

This guy is flogging his own product (5, Insightful)

Animats (122034) | more than 2 years ago | (#38770254)

From the article:

Peter Vogel is co-founder of Plink, a Facebook Credits-based loyalty program that rewards Facebook members for dining and making purchases at their favorite restaurants and stores.

"Facebook credits" are just another gift card scheme. You can't cash them out. You can't invest them. You can't convert them to another currency. You can't transfer them to another individual. And Facebook takes a 30% cut off the top.

The only virtual currency that comes close to behaving like a currency is Linden Dollars, the monetary unit of Second Life. Those, you can transfer and convert.

Bitcoin had potential, but it turned into a pyramid scheme.

Re:This guy is flogging his own product (5, Informative)

Anonymous Coward | more than 2 years ago | (#38770392)

BitCoin is not a pyramid scheme, technically it is a pump and dump.

Re:This guy is flogging his own product (1)

religious freak (1005821) | more than 2 years ago | (#38770852)

+1

Thanks for pointing that out (0)

Anonymous Coward | more than 2 years ago | (#38770916)

Thanks for pointing that out, after "Ponzi Scheme", "Pyramid Scheme" is one of those terms people seem to leap to whenever they feel there's a scam but aren't quite sure what it is.

Re:This guy is flogging his own product (0)

Anonymous Coward | more than 2 years ago | (#38770492)

How did Bitcoin "turn into" a pyramid scheme? The value of my (few) bitcoins doesn't change whether I convince anyone else to use bitcoins, or not. There's no definition of pyramid scheme I know of that would fit the bill.

I just spent 3.06 BTC buying 3 months of VPN services a few hours ago. I really like not having had to use my credit card for that.

Re:This guy is flogging his own product (4, Interesting)

lightknight (213164) | more than 2 years ago | (#38770998)

Agreed. I purchased web hosting for a year (out of the US), and a domain name. I'm considering a Parisienne firm for some minor website artwork. The number of businesses / services that accept BitCoins are growing.

The only people shouting Pyramid Scheme as those who are butt-hurt from trying to 'get in' at the wrong time; many of those people were more invested in turning a magical short-term profit by reselling their coins to 'suckas' who would buy in later. Surprise, surprise, the same kind of mentality seen with the flipping of homes on the real estate market, and just like with that market, it backfires -> absolutely no understanding of market fundamentals or finance, but the people involved think they've found a path to Easy Street. Probably bought in at $14 / coin, and sold out at $3 / coin, only to watch the market rebound, as of late, back to $7 / coin. Guys, if you want to turn a major profit, do two things -> 1.) read up on some finance / economics (the heavy stuff that you special order online, not the stuff B&N stocks in the "Investing" aisle), and 2.) long-term investing (not everyone is cut out to be a day trader, and long term tends to be quite profitable).

One of the larger things harming BitCoin is the constant f*ckups the various exchanges and online wallet sites keep experiencing. Mt. Gox kept screwing the market with their repeatedly hacked accounts (ah yes, PHP, the epitome of secure languages), followed by Dwolla and their API nonsense (has anyone seen my head? it appears located inside my rectum), and that one online BitCoin wallet service whose owners took everyone's wallet and cashed out (why yes, everyone, why doesn't you store your unencrypted wallet with me for a while? wink wink). In all seriousness, I myself am surprised that BitCoin is still around -> it's based on a sound design, but the growing pains it has experienced from every goober who has come along since have been synonymous with a 90 lbs geek trying out for the high-school football team.

Re:This guy is flogging his own product (4, Insightful)

Teppy (105859) | more than 2 years ago | (#38770634)

Bitcoin hasn't gone away. It may not be an investment to hoard at the moment, but as a currency it's functioning beautifully. I run Dragon's Tale [dragons.tl] , a casino MMORPG hybrid, which uses Bitcoins exclusively. Our new-players-per-week initially peaked right at the peak of the Bitcoin bubble (around 120 new players per week for a couple weeks), dropped to about 20/week, and has been growing for the last few months. Currently we get around 60 new players per week. Revenue from Dragon's Tale's hasn't passed our other game, A Tale in the Desert [atitd.com] yet, but on several recent weeks it's come close.

Players love Bitcoin because deposits *and withdrawals* are instant, unlike all other online casinos. I know that some of my players also play poker at Seals With Clubs [sealswithclubs.com] , a Bitcoin-only poker site. They may have a win at Dragon's Tale, shoot the money over to Seals, shoot their winnings back to DT, or into their Silk Road account to buy some goodies, or into their desktop wallet. If Bitcoin were never to go beyond gambling, it will be a success: it allows all Bitcoin-based casinos to function as one huge meta-casino.

Sorry but that's not "functioning beautifully" (2, Insightful)

Sycraft-fu (314770) | more than 2 years ago | (#38770844)

If it works for you, that's fine, I won't tell you not to use it. However that your tiny game (one I've never heard of, and I'm rather in to games) uses it means jack and shit. I can buy -nothing- I want with bitcoins, not a single thing. Anything I can think of that I'd desire which is sold by someone who takes bitcoins as payment.

Also are your players really using it as a currency? I doubt it, they are using it as chips just like at any other casino. As in they buy them as needed, play with them, and then cash out when they are done. That isn't what you do with a currency. A currency is something used for general transactions, and something you hold on to. When people talking about "having savings" they mean "having currency held in reserve".

Re:This guy is flogging his own product (0)

Anonymous Coward | more than 2 years ago | (#38770880)

I think your con-radar is malfunctioning. Bitcoin was always a scam. Bitcoin is the modern day equivalent of tulip mania.

Re:This guy is flogging his own product (0)

Anonymous Coward | more than 2 years ago | (#38771000)

Bitcoin had potential, but it turned into a pyramid scheme.

Any currency that is neither centrally controlled nor backed by something that's centrally controlled, hence free by my definition, will inevitably become a pyramid scheme by your definition. Doesn't even matter if it's tangible or not. I'd rather not use the term pyramid scheme (although any free currency would have phases that resemble exactly that) since they have utility that non-free currencies cannot provide. Same goes for the term `pump and dump`. People can do whatever they want with them, and that's exactly why these things happen. The debate should not be whether it's a scheme, but whether we need a free currency.

If there were a free digital currency that's widely used, I can't see any reason why I would prefer intermediary payment systems like Facebook credits or Paypal over using that currency directly. And if any such currency inevitably has to go through pyramid / pump'n'dump / my-grocery-store-doesn't-accept-this-thing phases, I don't have much to protest. Let's hope that Bitcoin survives in the long run.

People that pay for online currencies (0)

Anonymous Coward | more than 2 years ago | (#38770274)

...deserve the eventual meltdown that will come.

will they make the movies available online? (0)

Anonymous Coward | more than 2 years ago | (#38770300)

It's all fine and dandy if they allow me to buy a movie with FB credits (downside is that i'll have to make an account, oh well), but then, will it be available on day 1? can i watch it on my computer (or whatever internet connected box i happen to have)?

If the answer is yes, that's fantastic. If no...:( sorry Hollywood, tough luck on this one. Aint gonna see any $ from me then.

Re:will they make the movies available online? (1)

Bucky24 (1943328) | more than 2 years ago | (#38770440)

If it's anything like a Zynga game, then you'll have a certain amount of energy. When you watch the movie you use up energy, and when its gone you have to wait until the next day to watch more of the movie. But you can buy more energy for a cheap price.

It's not realistic to expect us to be able to BUY movies with facebook credits. They'd make much more money by charging a lower "per view" fee.

Contra effect (1)

ackthpt (218170) | more than 2 years ago | (#38770306)

If Facebook told me to buy something then I'd be more skeptical than ever about it. Could be a good thing or bad thing, but I don't see Facebook as my consumer advocate or advisor.

More like an idiotic social networking site which constantly nags me about things and notices and I try adblocking the pop-ups, which invariably makes it all worse, but I don't really care.

don't let the IRS find out (2)

a2wflc (705508) | more than 2 years ago | (#38770324)

Facebook will have to send a 1099 to everyone who earned credits this year and we'll have to pay taxes. My bank sent me one saying I earned $17 in interest. If I earned enough credits to buy 2 movies they'd probably be worth more than that and I'm sure the IRS would want their cut.

Re:don't let the IRS find out (0)

Anonymous Coward | more than 2 years ago | (#38771480)

They would first need to tax the Frequent Flyer points employees earn on business trips before they tax Facebook credits.

Nothing like a CB (0)

Anonymous Coward | more than 2 years ago | (#38770326)

They can't issue credits by fiat. Their credits only have value because they're backed by goods and services whereas CB money is issued in large multiples of foreign reserves and/or hard assets held by the bank. Also CB money is required to be accepted as legal tender, etc.

Saying that FB is becoming a CB because you can redeem game credits is like saying that a cereal is a CB because they have coupons.

Another distinction is that a "run" on FB credits would bankrupt FB if they over-issued. A run on CB money causes hyperinflation which is like bankrtupcy; but not quite the same.

Central bank returns to Frisco (0)

Anonymous Coward | more than 2 years ago | (#38770412)

On Bloomberg today it was reported Facebook is shopping partners for online gambling. That is a well known business for laundering and earning money on a large scale. That combined with currently unregulated creation of money online, makes for a realistic realization of this otherwise silly post.

What would be ironic and even likely is Facebook cash would become more stable than dollars, comparable to Swiss Francs, Australian and Canadian dollars.

The banking center may be returning to San Francisco from which it was strong a couple of decades ago. Please don't put a Farmville character on the currency, er coupon!

JJ

No, and here's why. (5, Insightful)

MrEricSir (398214) | more than 2 years ago | (#38770414)

Re:No, and here's why. (0)

Anonymous Coward | more than 2 years ago | (#38770756)

Slashdot Times
"Can all headlines be answered with the word no?"

Harry Potter and The Dark Knight? (0)

Anonymous Coward | more than 2 years ago | (#38770452)

I don't remember that one...

That's it, that's the end of Slashdot (0)

Anonymous Coward | more than 2 years ago | (#38770472)

I've always wondered what it would take for me to finally quit spending time viewing this site.

This article is the answer to the above question.

If this was the old days when stuff was printed, I wouldn't even
use Slashdot to wipe my ass.

Adios, idiots.

Re:That's it, that's the end of Slashdot (1)

T.Hobbes (101603) | more than 2 years ago | (#38770624)

slashcode is free

Someone should start something anew. Run it themselves, like Taco used to do.

I don't have the energy or time or personality to run the thing, but I'd be a happy viewer and contributor.

There's enough of a market for it it to pay for the running costs. Someone just has to step up.

Legolas called (0)

Anonymous Coward | more than 2 years ago | (#38770576)

He wants his long bow back.

Brings a whole new meaning to the term... (0)

Anonymous Coward | more than 2 years ago | (#38770736)

Friendly neighborhood bank.

Seriously, it'll make money off your friendships, and that's just a bit squicky.

Are they paying tax? (1)

hawguy (1600213) | more than 2 years ago | (#38770798)

Is someone paying tax on these transactions?

Lately Credits have become more intriguing. Warner Brothers this summer offered movie-goers a chance to watch Harry Potter and The Dark Knight for 30 Credits apiece. Miramax and Paramount countered with film-viewing offers, too

This sounds like a barter transaction:

http://www.irs.gov/businesses/small/article/0,,id=215975,00.html [irs.gov]

Exchanges occurring through a barter exchange are reported to IRS on Form 1099-B and show the value of cash, property, services, credits or scrip added to your account by the barter exchange.

Facebook needs to be megauploaded. (0)

Anonymous Coward | more than 2 years ago | (#38770826)

You know I'm right.

IPO imminent (5, Insightful)

slasho81 (455509) | more than 2 years ago | (#38770866)

I clicked through to TFA. I know, what was I thinking...

This is a guest post by Peter Vogel, co-founder of Plink, which lets consumers earn Facebook Credits for dining out and shopping online.

So, a co-founder of a business based on Facebook Credits thinks they're super-important and could be equivalent to actual money. Right. Next ridiculous story, please.

I expect more stories inflating Facebook's perceived worth to be pushed to the mainstream media in the coming months as Facebook's IPO is imminent.

Re:IPO imminent (0)

Anonymous Coward | more than 2 years ago | (#38771152)

I expect more stories inflating Facebook's perceived worth to be pushed to the mainstream media in the coming months as Facebook's IPO is imminent.

*BINGO* !!!!!! DING DING DING YOU WIN A PRIZE !!!! 100 Facebook Credits!

Plastic money for plastic values (0)

Anonymous Coward | more than 2 years ago | (#38770954)

Note that this virtual currency is being used to 'buy' immensely stupid things from an artificial engineered culture (games and entertaintment with very little cultural value). The wet dream of the Ayn Rand psychophants of this world

Trust facebook? (3, Insightful)

reboot246 (623534) | more than 2 years ago | (#38771026)

I trust facebook even less than I trust the U.S. government, and I don't trust government at all.

God forbid facebook ever becomes a central bank!

Movies for money (1)

GillyGuthrie (1515855) | more than 2 years ago | (#38771034)

Warner Brothers this summer offered movie-goers a chance to watch Harry Potter and The Dark Knight for 30 Credits apiece.

is it just me or does it seem like Facebook was wooed by Warner Brothers here

Facebook has been a central bank... (1)

wbr1 (2538558) | more than 2 years ago | (#38771214)

...where idiots are stored for years.

Wait wait people give REAL money for credits??? (1)

WOOFYGOOFY (1334993) | more than 2 years ago | (#38771228)

No way. I admit I saw the dark side of FB early on and opted out (thank gawd) and I don't know anything that doesn't bubble up to the level of NPR but.. people exchange real money for fucking FB "credits".

Before I get into a a snark-guffaw endless loop, this is so? Zuckerberg is printing funny money at will and separating douchebags from real money in exchange?

Surely no one is that stupid.

iTunes Bank (0)

Anonymous Coward | more than 2 years ago | (#38771234)

I would think it would more likely that Apple would evolve into this role seeing how it already has millions of accounts linked to credit cards. And if the upcoming iPhone 5 supports mobile payments it will make them even more of like a bank. They could also extend mobile payments to be allowed between individuals as well as for purchases and there you have it... the bank of Apple.

What... no BitCoin story today? (1)

zedrdave (1978512) | more than 2 years ago | (#38771266)

What happened? Taking a rest from hyping up stale BitCoin stories in order to sell us glorified corporate loyalty program points instead?

Ya, right (3, Insightful)

dilvish_the_damned (167205) | more than 2 years ago | (#38771352)

When people start accepting Facebook dollars as part of their salary then it will be a real currency. Until then it will be a promotional gimmick, just a bit more complicated than Marlboro boxes.

of all the sites.. (1)

JustNiz (692889) | more than 2 years ago | (#38771562)

I would NOT trust with my money, it would be Facebook.

Value (0)

Anonymous Coward | more than 2 years ago | (#38771684)

It's all in our head.

700 years ago folks would be aghast at what PAPER can now buy.

law covering currency / giftcards / scrip / truck (1)

Joe_Dragon (2206452) | more than 2 years ago | (#38771692)

law covering currency / gift cards / scrip / truck may apply to this.

And facebook trying to act like paypal may end up badly + there may be some irs audits / back taxes as well.

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