Real and virtual currencies converging

Another sign that real and virtual currencies are converging:

A UK panel is urging governments to start treating virtual currencies in the same manner as real life money to help combat fraud, money laundering, and tax evasion.

Value is value, whatever its manifestation. And where there is value there will be people trying to filch it.

A virtual identity custody battle

Dave Birch writes:

Who cares about custody of the quids [sic] when there's virtual assets at stake! A divorcing couple in China are fighting for the custody of virtual identities in the Zhengtu Online virtual world. The couple met each other through the game in September 2006 and got married in November. The two jointly own more than 10 Zhengtu Online accounts (each of which is, in essence, a different virtual identity) that are each above level 100. This, incidentally, makes them a liquid asset as they can be sold for 10,000 Yuan each online. The husband wants all the game accounts and in return is willing to give their newly purchased and renovated apartment to his wife: in other words, he wants the virtual stuff and she can keep the real stuff. As they say in Yorkshire -- or they did in the era when my mother was born in Catterick -- there's nowt as strange a folk. The dispute? The wife wants to split the real and virtual stuff equally... how old fashioned.

Which is all further proof that "real" and "virtual" aspects of value are becoming practically indistinguishable—if someone cares about something, it has value, whether that something is a game-world avatar or an apartment.

The identity of money

Michael Williams asks what the difference really is between "real" and "virtual" money:

The line between "virtual" money and "real" money is very fuzzy, especially in an age where even real money is earned and spent mostly electronically. I get my paycheck directly deposited to my bank account, I manage that account through a website, I spend the money with a credit card, and I pay off the credit card through another website. I rarely handle cash, even for very small transactions. So what's the difference between a Chinese yuan and a QQ coin?

HONG KONG -- China's fastest-rising currency isn't the yuan. It's the QQ coin -- online play money created by marketers to sell such things as virtual flowers for instant-message buddies, cellphone ringtones and magical swords for online games. ...

Then last year something happened that Tencent hadn't originally planned. Online game sites beyond Tencent started accepting QQ coins as payment. The coins appeal as a safer, more practical way to conduct small online purchases, because credit cards aren't yet commonplace in China.

At informal online currency marketplaces, thousands of users helped turn the QQ coins back into cash by selling them at a discount that varies based on the laws of supply and demand. Traders began jumping into the QQ coin market as an opportunity to make a quick yuan off of currency speculation.

State-run media reported that some online shoppers began using QQ coins to buy real-world items such as CDs and makeup. So-called QQ Girls started accepting the coins as payment for intimate private chats online. Gamblers caught wind, too, and started using the currency to get around China's anti-gambling laws, converting wins in online mahjong and card games back into cash. Dozens of third-party trading posts sprouted up to ease transactions, turning the QQ coin into a kind of parallel currency.

The only thing that separates QQ coins from yuans is that the former isn't issued by a government... but then that's never been a requirement in the definition of "money".

Michael goes on to explore Wikipedia's definition of money, and there's an interesting post comment on the same topic by Francis Porretto. One thing's for sure, though: when the tax man comes knocking on your virtual door, you'll know that your Linden Dollars or QQ coins are the real money deal.

Moolah

Grant McCracken writes: "Eventually, the internet mediators are going to have to pay the content provider just as surely as the old mediators now do."

Doesn't this statement rather gloss over the way value is increasingly expressed online in terms of attention and virtual currencies rather than cash?

The Attention Economy is becoming ever more fluid and less granular, making it hard for individuals or small communities to trap enough value in their online presence to monetize it significantly. Even leading blogger (and, effectively, community gatekeeper) Guy Kawasaki disclosed recently that his AdSense revenue was really rather modest (2,436,117 yearly page views yielding a princely $3,350).

It seems to me that the balance of financial benefit from online content creation may yet shift even further away from the creators and towards the big content re-aggregators.

The value accruing to individuals and even communities is huge, when measured in terms of personal and shared brand, knowledge and network. Just don't expect a steady flow of cash unless you happen to create the next Chad Vader.

A good job, then, that most of us blog etc. for the love of it!

[also left as a comment on Grant's post]