Virtual Money

The concept of money has been so deeply rooted into our psyche that we unquestioningly equate value and money. Whereas money was designed to be, and continues to be a metric of value, and not value itself.

Idea of the day:

Virtual Currency

Since money is a metric of value, then it is indeed possible to have other metrics as well. In fact, there are already heavy layers of abstraction that have been placed over the abstraction of money, to create advanced metrics, such as real estate, stocks and options, and a hundred other instruments that an economist or a financial analyst could tell you about. In the virtual world of the web media, a new metric is also being spawned.

All over the world, gamers have been paying real money for products that do not exist except on the web. Even people who are not serious gamers, but would just like to kill time playing Farmville do not mind spending some cash for the sake of what they consider to be entertainment. And since money itself is an abstraction, one may argue that the virtual goods are as valuable as real goods, and so is the virtual currency. How much this line between "real" and "virtual" currencies would be blurred in the years to come remains to be seen, but the potential of virtual currencies and goods in making "real" profits has been capitalized upon (pun intended!) by companies like Zynga, which is one of the fastest growing web-based start-ups today. And what also remains to be seen is whether this is indeed an encouraging concept or a disturbing one.

http://www.nytimes.com/2009/11/07/technology/internet/07virtual.html?_r=1

Reverse Business

A lot of time energy and money is spent on figuring out the right business model for a venture. But sometimes the most obvious sources of revenue may be glossed over.

Idea of the day:

Pay me for my information

Almost everyone has an online presence in the form of your Facebook account, your Twitter updates or your simple Gmail activities. The largest source of revenue for web-based businesses comes from advertising. This advertising is targeted to your "needs" and "interests". Every time you check your mail, you get advertisements on your page related to the content of your mail. Facebook proposes to use your social online network to enhance the quality of information reaching you, and in the process, make profits for themselves. These business models essentially make profits by processing your information.

Is it then possible to have a model in which you charge for your data? If companies can charge advertisers for using their online presence as a platform to make profits, it should also be possible for you to charge companies for using your online presence to make their profits. This may seem like a shift from traditional models, because typically individuals do not charge for access to their information. There may come a paradigm shift where individuals realize that they are not mere customers, but are themselves service providers. Something thats worth exploring surely!