Central Banking Comes to Facebook
July 6th, 2011Our rebels have to contend with a monopolistic Federal Reserve that is the exclusive maker of currency in the year 2019. Unfortunately for the country at this time, that means money can be printed to the point where it isn’t even worth the paper that it is printed on. This week, the same monopolistic currency practices have arrived on Facebook, and many are not liking this.
As of July 1st, Facebook now requires all applications and online games to use Facebook’s virtual currency for all its online functions, such as user upgrades and items within games like the popular FarmVille franchise. This new rule will also allow Facebook to take a 30% cut from all transactions using the new currency, which is slated to become 1/3 of Facebook’s income over the next year. This new law has created criticism of Facebook by the activist group Consumer Watchdog, which filed a complaint to the Federal Trade Commission saying that Facebook is “abusing its power as a popular site” to create a monopoly on virtual currency. In addition, Facebook could effectively control the entire market for virtual goods, which has grown to a $2.1 billion industry.
While the creation of a new means of bartering is welcoming, it is troubling that such a huge market may fall victim to the same monopolistic rules that is practiced by the Federal Reserve, which would lead to online developers losing money in the long run, as currency inflation takes hold in this new marketplace. Hopefully a free-market solution will help create a competitive marketplace that benefits developers and Facebook’s bottom line, especially as the virtual market continues to grow.
