Could In-Game Currencies Substitute For The Real Thing During A Crash?
from the WoW-gold-to-the-rescue dept
There’s been a lot of discussion about the fact that currencies and goods in virtual worlds have become quite valuable in the real world. This has prompted lawmakers all over the world to address the economic implications of these currencies, as existing regulations aren’t designed to handle in-game economies. But perhaps lawmakers should be looking to the past for clues. Dave Birch discusses a period during the Great Depression when the US literally ran out of currency, and private organizations had start printing their own currency for local use. One such printer was Parker Brothers, which used their Monopoly money printing presses to help out their hometown of Salem, Mass. Technically, they weren’t printing Monopoly money itself, but the company was able to take advantage of the fact that it had experience printing out bills. Hopefully, we won’t have another collapse again, but if we were to, you might want to hold onto your Linden Dollars.
Comments on “Could In-Game Currencies Substitute For The Real Thing During A Crash?”
Considering this means of ( invisible) virtual capital trading what steps are taken to ensure those who have not contributed to this problem and suffer most from it get to reap the first benefits ? Is this not what it is about ?
A Bear walked into a pub and said, “I’ll have a pint of beer and…… a bag aof chips.”
The bartender asked, “Why the long pause?”
the only reason in game currencies have any value in the real world is because people have real money they want to spend on them. if they didn’t have real money to buy the in-game money with, it wouldn’t have much value in the real world, although it’s value in the game may not change that much.
Ah remembah in the crash of '09....
If the crash is bad enough to extend into the virtual world, might we resort to bartering with virtual chickens and potatoes?
What's the difference?
Currency has no inherent value. It does not directly offer food, shelter, or warmth. The only value it has is what is agreed upon by all involved parties. It is a “virtualized” extension of barter. Once you’ve accepted one form of proxy, or currency, for exchange of goods, it’s not any major stretch to accept any other. We already do this – call it “Euros” or “Yen” or “Pounds”. There’s no requirement for a currency to be backed by gold – the only reason that lends strength is because we’ve agreed that gold has a value as a proxy. A proxy for a proxy is no more or less “valuable” than a state-backed currency.
There’s also no requirement that a currency be state backed. Companies issue currency all the time, we just call them “stocks” or “bonds”. So why should it be any surprise that a well-run “virtual economy” could have a value as a proxy for trade of real goods and services?
The only limiting factor to using, say, Linden Dollars as a general currency is that not everybody is part of 2nd Life. To those not part of that community, LD has no value.
Re: What's the difference?
“The only limiting factor to using, say, Linden Dollars as a general currency is that not everybody is part of 2nd Life. To those not part of that community, LD has no value.“
even that limit is only true to a certain extend:
as you say yourself, the only value it has is what agreed upon by all involved parties.
I don’t have to be part of 2nd Life, (I will not have the enjoyment of using LD for things in 2nd Life, but) that’s not important/relevant: as long as people I would buy things (goods, services,…) from are (and hence accept LD as payment), I will have no problem accepting LD as payment myself, as long as I foresee being able to get rid of them by buying things I want…
so the limiting factor is not the amount of people not being part of 2nd Life, but non-2nd Lifers confidence in LD/their (perception of the) acceptance of LD
real money ?!
There is no “real” money it’s all a man-made convention we choose to observe – there is no real difference between “real money” and in-game money.
Re: real money ?!
y’know, I’ve written a post that says exactly this, but it’s being “held for review”.
Re: Re: real money ?!
Mike, Joe, Carlo, how about a hint, guys – what triggers that “feature” of Techdirt? I’ll quit doing it, whatever it is.
Re: Re: real money ?!
someone steal your idea and write it as their own?
Re: Re: Re: real money ?!
Nope, truth is truth, no problems there. Good for AC for knowing this. I was just wondering why my post (which has finally shown up) triggered the “will be reviewed by the staff” thing.
Got news for you . . . if the dollar tanks so bad that we are looking to Second Life to support our economy, go ahead and put on your tin-foil and duct tape survival suits and crawl into the fallout shelter. Game Over.
That all depends on which game your talking about…
in the event of a real crash..
…the state of the country will be MUCH different than in 1929. For one, there will be massive rioting making the L.A. riots look appealing. There will be a massive shortage of food because back in 1929 there was a much larger percentage of people who relied on themselves to put food on the table, now we rely on Wal-mart superstores.
In the event of a crash the power structure changes significantly; people who have food, gas or can provide any necessary goods or services will have all the barter power.
Anton LaVey seriously had it right when he wrote that an economic crash would open our eyes to voluntary slavery. Why? Because it’s better to be used than to be useless, and subsequently homeless, hungry, etc.. And he wasn’t talking about slavery like we abolished in the 1860’s, so get off your high horses, though if conditions are bad enough you’ll find that humans will even accept that. Does your wife prostitute herself or does she let your children go hungry? Those decisions are made by mostly “normal” people who find themselves in desperate situations every day so how do you think we’d respond if hunger was the status quo and your skills in IT or cosmetology or whatever were useless(can’t program if the computers have no power)?? You need look no further than our current state of affairs where we are willingly enslaving ourselves to our government so they’ll provide us the illusion of protection from the ‘terrists’. They’re not even a real threat to a large percentage of Americans like a collapse would be and yet we welcomed these changes.
What will it be like when all the gang-bangers are roaming your city, stealing from the defenseless? Virtual money will be about as useful as a virtual gun.
Re: in the event of a real crash..
Thank you for making my point about why Gun Control is a bad thing.
I spend Virtual Cash all of the time at stores. It’s called the Debit card. Basically the only place I acutally use paper or coin money anymore is for the vending machine at work.
Using "virtual" money instead of "real" money.
You are all missing the point of the post. Read the line:
Dave Birch discusses a period during the Great Depression when the US literally ran out of currency, and private organizations had start printing their own currency for local use. One such printer was Parker Brothers, which used their Monopoly money printing presses to help out their hometown of Salem, Mass. Technically, they weren’t printing Monopoly money itself, but the company was able to take advantage of the fact that it had experience printing out bills.
The point, here, is that during the Great Depression, local communities (which no longer really mean anything) supplemented the lack of real money for “virtual” money. The term virtual, here, is used in the sense of something that stands in for, mirrors, or acts as a simulacrum, for another object. The virtual is a simulacrum of the real. Hence, in order to keep a semblance of a functional economy (and a functional working society), Parker Brothers printed money the community could use to keep things going.
Unfortunately the blurb above does not speak to the success of such a venture, but Lindens, or forms of virtual world currency, may work to serve some form of economic value. It just requires that, collectively, we decide to recognize the value of said moneys.
Anonymous Coward was correct in saying “There is no “real” money it’s all a man-made convention we choose to observe – there is no real difference between “real money” and in-game money.”
All forms of currency are valuable only in as much as we agree to place value upon them. Thus, if the US dollar became useless, we may decide to place value in Lindens, and allow the exchange of goods and services in return for a pocket full (an e-pocket of course) of Lindens.
There’s always Liberty Dollars too.
Yes, I’m sure in a time of economic crisis that the world will look to the make-believe land of a bunch of dorks for its salvation.
This is almost as stupid as the “should crimes in Second Life be subject to prosecution?” and “should income in Second Life be taxed?” threads on slashdot.
Repeat after me: Second Life isn’t real.
Real Crash, Virtual Trash?
I have to agree with “ehrichweiss”, even though he quotes from Anton LaVay – go “Wiki” it if you want to know why that’s alarming, I’ll wait…- but such disruptions will be more regional, and less disruptive than those of the 1929 crash, and, as in most fights in a personal relationship, less baised on the “currency collapse” than on pre-standing, unresolved conflicts and inequalities.
Ok, now, as to economic currency collapse…money, be it U.S. Dollars, Euros, Yen, what have you, is a fiction, agreed upon by all. The only thing of real value are tangible items, like food, clothing, cars, etc. We assign a value in “money” to represent the difficulty in “creating” such a tangible item, based on many factors, including difficulty of creation(a glass of water is less expensive than a computer system), availability (a glass of water is more expensive than a computer system in the desert, given that there is no electricty), quality (a glass of distilled water is more expensive than a glass of muddy water) and other factors, not the least of which is what the other person is willing to pay (people in Hell will give their fortunes for a glass of water…but a man drowning in a lake wouldn’t give you a plug nickel.)
In an economic collapse of such magnitude that a currency was devalued so much as to be worthless (and realize that for this to occur, then ALL currency would have to go – otherwise you just get a local occurence), disruptions will only last until the currency in decline – say U.S. Dollars, in this case – is replaced in trade with the currency in acendance – say the Chinese Yuan. All you need to know about what would happen to the U.S. economy in such a curcumstance is look to those countries that currently have 1,000% or better inflation. What do they do? For all important transactions, they use a foreign currency – the U.S. Dollar, the Euro, the Yen, the Yuan, the Peso, etc.- and they recover, if they have something of actual value to trade with other economic groups (countries, large business, etc.). If not, then the imbalance only continues if the government in question tries to stop its citizens from adopting an outside currency.
One of the major reasons why the 1929 stock market crash was so devastating, currency-wise, was that the U.S. Dollar was the backbone of the world economy at the time, the “lingua franca”, if you will, of the world. Most other currencies were either still recovering from WW I or were baised themselves on the U.S. Dollar. Take that foundation out from under the economic “house” and it collapses.
But in the current economic structure, many strong currencies exist – some currently stonger than the U.S. Dollar, some weaker. This may, or may not change in the future, but that is not forcast anytime soon. Basically, whenever a fundamental system is controlled in part by one or two similar “concepts”, then the system is vulnerable to disruption if that concept is disrupted, whether the U.S. Dollar,in the case of Black Tuesday, or in a conceptual disaster of, oh say, someone discovering a critical, unfixable vulnerability in the heart of Windows, perhaps? Not such a disaster now, what with Unix, Linux, Mac OS, and all the server languages used by the really big computers; but imagine a world where 90% of ALL computers ran on Windows… yikes!
So, no, I wouldn’t trust an economic adviser that told me to put all my money into “canned goods and shotguns”, (even if he did sound like Tony Randall (g)), but I wouldn’t trust one who didn’t tell me I should have some of either on hand for emergencies. A better way to prepare for economic disaster is to figure out what physical things would be most valuable in your immediate area (desert:water, city:food, country:commuincation, ect.), and get a supply of that item. The only other thing you need is a way to defend that “item” (shotgun? group of neighbors who share in your idea, if they defend what you have? secrecy?)and you’re set. Remember what group got the richest in the California gold rush: the grocers that sold the 49’ers the supplies and food they needed… and then figure out a way to be that group in the next disater that comes to your area. And I don’t mean at 200% markup, either, just as a person trying to provide a service… don’t be a yutz!
The only other alternative is to always be prepared to flee your current area for a safe zone, though this is not always possible or advisible. But on the other hand, just look at what happened during Hurricane Katerina –
Why hasn’t anyone written a manual on what to REALLY do in the event of a disaster baised on what happened in New Orleans? Or for that matter, what can be done to prevent such massive failures of government aid in the future… suggestion: divide FEMA into regional divisions, each division prepared to deal primarily with “first response” to the type of disaster most common in their own area (central states:tornado – costal states: hurricane – earthquake prone:earthquake disater relief, etc.) and secondarily to aid in the longer term the other divisions in the event of a disater, i.e. in the event of massive tornado activity in central states: FEMA central sends critical care (the disaster versions of EMT’s) in first, with, say, NorthEast, NorthWest, and SouthEast FEMA sending in longer term personnel (think Emergency Room Doctors) and supplies (portable hospitals, medical supplies, etc.), with SouthWest waiting in backup for the most devistated (think long-term care doctors)? Just sayin’…
… and yes, the underlying structure of my idea is the U.S. hospital system; which, while it is an economic disaster, functions pretty darn well, in spite of that…
[BACK TO TOPIC]
if you could have fled, wouldn’t you have? And why didn’t FEMA have a fleet of transports to take people to shelters in areas not devistated by the hurricane? If you ever needed an example of what’s wrong with the priorites of government in this country, there you go… especially after the government basically said, in the future, you’ll just have to fend for yourselves during disasters?!? Well, then, if we can’t count on government during disasters, then WHAT THE HELL are we paying for? Sorry, but this REALLY ticks me off…
Anyway, in conclusion , (allright, stop clapping, you lot!)economic disasters such as the 1929 stock exchange, and resulting “Great Depression”, while still within the realm of possiblity, are much less likely simply because the world has fewer “eggs” all in one basket; and while there may be localized disruptions (think the collapse of the Russian Economy during the “Fall of Communism” in the 1990’s), the whole will totter along nicely, thank you. Any disaster big enough to disrupt the juggernaught of global trade will give you too much to worry about other than a fictional currency in a fictional game.
Hope that helps…
P.S. A though in passing: if the reason why the Monopoly people needed to print “money” was that there wasn’t enough physical money to go around, then how would a non-physical currency be of any practial value? Hmm…
Business can print it’s own money……..
It is only worth something at IT’S store front.
This is called SCRIPT.
Some stores have also given out SCIPT as change
only worth someting at THEIR store.
I remember reading about this in something about
I live in the UNITED STATES OF AMERICA
It is illegal to print FEDERAL currency.
actually it is illegal to POSSESS the cloth our
currency is printed on.
I have even utilized script myself at a store, cashed my check and the amount required for cashing it was returned to me in the amount OF SCRIPT.