Virtual currency exchange to launch in 2010
Virtual currencies have become big moneymakers for social sites. A new site will let users swap currencies across virtual borders.
Currency Connect is billed as a "cross property virtual currency exchange" system similar to how you would change U.S. dollars into euros if you were traveling in Europe. Users simply swap their currencies depending on what site they are on. Overall this is not a bad idea as I still find it surprising that users pony up real money for virtual money that can never be taken out of a specific site.
But, it does make me wonder when a bigger payments vendor, like PayPal, will get into the game and offer more of a de facto universal virtual. It's all well and good that two large-ish sites have launched this effort, but it can't be long before other social sites like Facebook join the fray. And, ultimately the site or currency with the most users is likely to be the one with the most users.
This opens up an opportunity for other sites with large user bases such as Google and Yahoo to offer a currency program. If users are already joining multiple social-networking sites, there is no doubt that they are also using search engines and instant messaging.
On the technical side, the service uses a simple set of REST APIs that implement the various checks and balances of the system. Security is maintained through tracking methods and server-to-server connections, which will initially limit how many sites can participate in the service. Again, a larger online service might have an easier time deploying a fully distributed, trusted service that didn't require point-to-point connections.
It's clear that virtual currencies have become an important part of social networking and gaming infrastructure. But, sooner or later fickle users will change their allegiances. A currency exchange offers a palatable escape method but still doesn't ever let you turn your virtual currency back into real money.