An article on Forbes.com by E-Money specialist Jon Matonis (@JonMatonis) expands into reasons Google might have decided against issuing its own currency — “Google Bucks”, as was disclosed by its executive chairman last week. Excerpts:
“They probably realized that Google Bucks could end up like Facebook Credits and become a virtual currency roach motel where your money checks in, but it doesn’t check out. Facebook does not provide two-way convertibility and person-to-person payments due to the potential for fraud and the emergence of a secondary market beyond Facebook’s control”.
“In March 2011, Mike Hearn, a Google engineer, released an open source java client for bitcoin called BitcoinJ so obviously the protocol did not go unnoticed at Team Google. A true, and ideal, virtual currency will have the attributes of two-way convertibility, an independent floating exchange rate, and a nonpolitical unit of account. Consequently, it is those core features that stoke direct competition against national currencies and bitcoin possesses all three”.
“Contrary to utopian social planning, free-market virtual economies will emerge spontaneously rather than through design and the ultimate victorious currency will be a market-based competitor that can move seamlessly across multiple grids. The virtual world is the perfect crucible for launching unrestricted currency competition and that competition will enable further opportunities for transporting virtual world earnings to real world value. This bridging of the two worlds could be the sought-after “killer app” for open-loop digital cash”.
The article links to a podcast of an interview with Matonis from the Virtual Policy Network.
- http://www.virtualpolicy.net/virtuallypolicy003.html (mp3)