Wednesday, February 02, 2011

Should we take Facebook currency seriously?

Yes, Facebook do have their own currency, you can buy it and use it for things within the Facebook walled garden. This is a typical loyalty scheme that one sees provided by merchants often. Sometimes it is refered to as credits and it is usually limited in how widely it can be used and most importantly, one cannot turn it back into money... it is a one way street. We never take these schemes serious, we never think that they will take over the world, so what is the big fuss about facebook's currency?

It is the size of course. If all of the Facebook subscribers were to open a facebook account and fund it with a substantial amount of money, this may just become a self-sustaining economy. And this is where we have to do some numbers. How big will a self-sustaining economy look like. I am sure that there are economists that will be able to guide us in this, but my gut tells me it is something like twenty million accounts (at least), with an average balance of $500 to $1000. Anything substantially less will not have critical mass.

Unless the value proposition of Facebook credits are much bigger than what it is currently, I cannot see that these numbers would ever be achieved. Should we take Facebook currency seriously? Depends what Facebook comes up with that will entice me to keep a few hundred dollars in my account... which I have not yet opened.

3 comments:

denis said...

Facebook credit is more than a loyalty currency : facebook credit is mandatory for games ...

Ahsan said...

Wow. You have highlighted a very interesting area here. Imagine an eco system where Facebook users use this currency to transfer money to each other (which they can do at the moment but cannot convert it in to cash), for bill payments , for purchases (of items outside facebook world) etc. The possibilities could be endless. This could be world’s largest payment system.

Randy Smith said...

Hannes,

I agree. This is the very direction things are heading.

Randy Smith
Founder
MobilePayUSA