"This is the kind of revolutionary fervor that PayPal was always intended to foment. Peter Thiel, PayPal’s cofounder and a die-hard libertarian, launched the company as a means of creating a stateless monetary system, making it possible for anyone to switch, instantly and easily, between global currencies. “PayPal will give citizens worldwide more direct control over their currencies than they’ve ever had before,” he told new employees in 1999, according to the book The PayPal Wars. 'It will be nearly impossible for corrupt governments to steal wealth from their people.'"
"But for most of its history, PayPal acted more as an enabler — a way of extending the credit card model of payment into the online realm — than as a bomb-thrower. Customers didn’t want to use PayPal to escape the tyranny of government currencies. They wanted to use it to spend money online without having to give out their credit card information to a million different vendors."Although he doesn't discuss nonpolitical digital currencies competing with governmental units, Roth does anticipate competing virtual currencies evolving from the in-world games and virtual worlds (see valuation table below):
"Cryptographer David Chaum wanted consumers to be able to transfer money digitally, just like banks. His ecash was an anonymous form of money first issued by an American bank in 1995. The company declared bankruptcy in 1998, but the concept has since been built upon by dozens of digital and virtual currencies."
"In recent years, many other companies have come up with their own PayPal-like innovations, creative tweaks to further squeeze some margins out of the traditional credit card model. Apple’s iTunes and Research in Motion’s payments program reduce transaction fees by bundling a customer’s purchases before sending them to a credit card company for processing. (That’s why you don’t usually see a series of 99-cent charges on your credit card bill; they are processed as one lump sum.) Virtual currencies, from Microsoft Points to Linden Dollars, encourage “in-world” trade, incurring credit card and banking fees only when their users buy in. By reducing their exposure to traditional transaction systems, these companies are able to wring extra pennies of profit out of each sale — which can aggregate into millions of dollars, turning their payment platforms into profit generators in their own right."
"What if the company opened up its code, embraced its developers, and turned its service into a platform? What if PayPal asked its users to create the tools and functions that would make it grow?"
Rate of Exchange: One US dollar translated into various virtual currencies.*
Social Network Massively Multiplayer Role-Playing Game
* Values are approximate. Not all currencies are pegged to the dollar, and many are not intended to be exchanged for cash.
- 10 Facebook Credits >>>
- 125-170 WOW Gold (World of Warcraft) >>>
- 80 Microsoft Points >>>
- 10 Project Entropia Dollars (Entropia Universe) >>>
- 6 Q coins (QQ.com) >>>
- 250 Linden Dollars (Second Life) >>>
- 1,500,000 Star Wars Galaxies Credits >>>
- 6 Habbo Coins (Habbo Hotel) >>>
- 10 Twollars (Twitter) >>>
- 100 Nintendo points >>>
- 1,000 IMVU credits >>>
- 80 hi5 coins >>>
- 5 Farm Cash (FarmVille) >>>
- 5.71 WildCoins (WildTangent WildGames) >>>
- 2,000 Therebucks >>>
- 100 Whyville Pearls >>>
- 25,000,000 ISK (EVE Online) >>>
- 0.75 Mahalo Dollars >>>
- 4 Zealies (Dogster) >>>
- 10 Ven (Hub Culture)