Virtual Currencies

CNN did a post about virtual currencies and economies. It is estimated that at least $1 billion USD were transferred into virtual currencies last year. The biggest use of virtual currencies are online games, followed by social networks and virtual worlds. Some websites even earn more revenue through virtual currencies than online advertising. The massive online multiplayer game, World of Warcraft (or WoW for short) uses WoW Gold. Even though it is against the rules set by Blizzard, this currency is bought and sold on the black market. This currency is so sought after, workers in China have been known to play the game just to earn the virtual WoW currency to sell to players in Europe and the US.

Social networking sites like Hi5 and MyYearBook have created their own currency as well. Hi5 has the Hi5 Coin and MyYearBook calls their currency Lunch Money. Hi5 Coins are mainly used to buy virtual gifts while with Lunch Money you can buy virtual gifts, play games and even donate it to charities. Facebook is looking into a unified currency since all the games and application on their platform that use a virtual currency has been created by the application developer. The problem with this for members is, the currency is only good with that one application. Facebook also doesn't see any revenue from these virtual currencies. This could be a way out for Facebooks revenue problems. If they create one unified Facebook currency for the entire site, not only could members spend it through any Facebook applicationg they want, Facebook would get a cut from each transaction.

The virtual world Second Life also has a currency called Linden Dollars. You can trade real currency for Linden Dollars which you can then buy whatever is for sale on Second Life (virtual real estate, entertainment, stores, etc..). Just like with real currencies, the Linden Dollar fluctuates daily against the USD. The buy and sell prices are set by the residents of Second Life on the LindeX Currency Exchange.

Some dating sites have a form of virtual currency called points. While you can't trade or buy something from other members, you can purchase virtual gifts, features and extended memberships from the dating site itself. Usually the way you earn points is by using and / or participating in the dating site. Two dating sites that I know of who use points this way is, Plenty Of Fish and, the FriendFinder Network of dating sites. With POF, every time you log into the site you earn 60 points, with a maximum of 60 points total every 24 hours These points can be used to buy virtual gifts for other members. With FriendFinder you receive points for participating in the site by adding or voting on articles, replying to questions and voting on topics. When you have earned enough points you can then purchase membership upgrades with them. This can include adding extra months to your membership and having your profile highlighted.

Check out CNN.com Technology for the full story. Read our FriendFinder review for more information on this dating service.