CASHLESS SOCIETY: ‘Facebook Nation’ unveils its new currency

By Patrick Henningsen
21st Century Wire
Jan 31, 2011

The 21st century has certainly witnessed a progression towards a ‘cashless society’, but social networking giant Facebook is taking things a step further, throwing their hat into the ring with the introduction of a new compulsory monetary policy that will initially govern its share of the multi-billion dollar online games industry.

Imagine a virtual world where all goods and services are to be offered, bought and paid for by a new virtual-local form of electronic currency. Facebook will be piloting such a scheme for their multimillion dollar online games market. As of July 2011, every social game developer on Facebook will have to offer the social network’s “virtual currency credits”.

According to a recent news release from Marketing Week, “Over the next five months developers will have to implement credits as a payment method within their games”. The games industry already accounts for 70% of the virtual goods transactions on the site.

According to Facebook, the social networking corporation is not insisting that their new online currency will be the only payment method available to users, and in exchange for their cooperation, game developers will offered incentives if they use ‘Facebook dollars’ exclusively. Compensation for compliance will apparently include early access to product features and premium promotion on their site, including promotion on the games dashboard and of course, premium ‘smart’ ad targeting.

Facebook enters into the cashless society game... in a big way- with its own form of money.

What appears on the surface to be a simple online marketing tool to help consolidate a niche market share on the world’s largest social network, has in fact much more far and reaching consequences for hundreds of millions of users.  What Facebook has effectively achieved here is nothing short of a huge “game changer” in terms of how a corporation can dictate its rules in a virtual world without cash.

Foreshadowing of things to come

In 2011, it is a social reality that most people you know are, in one way or another, citizens of the Facebook Nation. The corporation’s success in capturing a near global monopoly of membership to their online platform has now given it the ability to dictate an economic mandate to both producers and consumers, in effect, controlling both the upper and lower loops of their virtual economy. This is an incredible position of power, but one which should come as no surprise to any economic student of monopolies. A severe lack of choice in the world of online communities has unwittingly(or not) positioned Facebook to play the roles of banker, retailer and governor.  It is certainly a trend worth noting at this stage, and one which may one day have real consequences for its members and their various cyber passions.

By issuing its own form of “virtual currency credits”, it is essentially creating its own money supply that may one day be the defacto currency for all transactions for goods and services that fall within the borders of the social network. Here is where Facebook may exert its exceptional economic leverage. With any new form of ‘national’ currency- in this case, it’s the Facebook National Currency, also comes the possibility of fluctuation in currency exchange rates.

With this centralisation of power also comes the ability and means to control and even inflate the value of its currency in terms of supply and demand. This can also reflect itself in the value of all goods and services whereby the paying online community would have no choice but to comply to any new user monetary policy decrees or changes in value imposed on producers and users. One only has to look at their recent announcement to realise that this is indeed already the case.

The power of corporations to create their own currencies is a trend to watch out for (IMAGE: Infowars.com)

A Brave New World: the cashless society

As the virtual community and virtual economy begin to replace the real ones, trends forecasters and futurists can begin to imagine a world where morning newspapers are replaced by online news, local markets are replaced by online supermarkets, community fundraising events are replaced by web fundraisers, fun fairs are replaced with online games and greasy spoon cafés are replaced by internet cafés. In case you haven’t been paying attention, in so many ways- that day has already arrived. Welcome to the virtual world. As we spend more and more of our time interfacing with this new world, we will invariably be performing many more monetary transaction there too.

Aside from the obvious differences in a cashless society- a world where  no notes and coins are ever physically held by the owner, there are also a number of other not so nice realities which citizens will be forced to accept. Chief among these are legitimate concerns that a cashless society would make “retailer resistance” aka choosing independent shops, buying direct or supporting local markets over mega supermarkets and national retail chain stores… nearly impossible. This can also be applied to the virtual community or marketplace. Already there are multitudes of businesses who must be on Facebook in order to reach their target market.

Consumers might also consider the possibility that should Facebook go public, they could, at any given time, transform the face of online retailing by buying up large tracks of existing virtual real state. Think Amazon, Love Film or Sound Cloud. Resistance? All you would here is Mark Zuckerberg’s laugh echoing down some long corridor in deepest, darkest Palo Alto- and Morpheus muttering, “… the Facebook has you..”.

In addition to retailer resistance, cash ensures some level of anonymity on the part of its owner. Not so in cashless world, as electronic currency and transactions are and will always be recorded, track, analysed and in some cases- suspended. In the virtual cashless world, the lack of anonymity and the ability to switch one’s means off is amplified even more.

With the introduction of a cashless society, citizens are also likely to lose their identities associated with national currencies like American Dollars, or British Sterling. But as they lose one identity, they will most certainly gain another. In this way, Facebook has taken the lead in supplying a monetary identity to its client citizens in the form of its ‘virtual currency credits’.

Perhaps one day we may also see ‘Apple Credits’ or ‘Nokia Kroner’ as mobile device transactions creep further and further into our economic routine. Either way you slice it, it is an incredible amount of power and influence which an elite clique of corporations now have over large sections of the global population.

As we have seen with the online games developers and their customers, resisting the Facebook marketplace is no longer an option, as it has already defined policy within the boundaries of its massive virtual community- even mandating what form of money can be used within the Facebook Nation. The decree is simple and clear, “if you are not in, you are out.”

About the author: Patrick Henningsen is a writer, filmmaker, former pr/communications consultant and managing editor of 21st Century Wire.

Contact: pj.henningsen@gmail.com




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38 Responses to “CASHLESS SOCIETY: ‘Facebook Nation’ unveils its new currency”

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  9. Al Falfa Says:

    Actually the “cashless society” that exists and keeps growing in the U.S. is due to the fact that most Americans are BROKE, PENNILESS DEADBEATS WHO HAVE NO CASH.

  10. mell Says:

    Tell that to the US Mint that sold 6 Million Plus silver eagles worth 28.50 a piece in January kep your facebook. I know what people will say when you try to spend it on stuff.

    Got Gold??

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  12. Tim Says:

    Only in America do people work real hard, spend real time, use real money to get virtual stuff. The other countries don’t hate us: they’re AFRAID of us!

  13. Rex Biggers Says:

    Luckily I block all of the “games” I probably have over 70 blocked by now.

  14. otis wilcox Says:

    FOOD FOR THOUGHT.

  15. Jason Says:

    I was just thinking on this too, the new rage will be for corporations to make their own physical currency to operate as legal tender within their own corporations for percentages of physical stock.

    If facebook wanted, they could also develop printed paper Facebook currency certificates redeemable as a promise to pay backed by credits in your account, much like the US dollar. Except the US dollar isn’t backed by anything which is why its going to fail.

    Silver/Gold certificates were used for redemption of silver/gold, the original standard of the banking system. You’d take your gold/silver in to make a deposit and receive these certificates. No USD was involved for the transaction.

    The only way to keep the dollars strong is to back it up with physical stock. Any corporation knows this. Can you see 1,5,10,20,50,100 Troy Ounce Silver Certificates in the near future…. again? I sure can.

    Certificates for the redemption of silver regardless of monetary value.

  16. bruce Says:

    This is a tracking technology and part of a larger plan to try an eliminate cash.

    It is bad enough our paper money is printed out of thin air and backed by nothing but a government promise (and we all know how good government is at keeping promises), but at least cash constitutes our last bastion of freedom (along with the internet (if you know how to use it). CASH affords one anonymity and privacy. Many times when you pay cash, you also get a better price from merchant and also help him keep more money in his pocket.

    Money should be in the hands of the people and not the banks and governments. Electronic money is a CONTROL mechanism.

    Here’s a thought: If 10 million canadians withdrew just $10,000 cash from the banks and never put it back in, that is a 100 BILLION DOLLAR economy in the hands of the people!! That money cannot be taxed as it becomes a medium of exchange that circulates among the people. Now, that’s FREEDOM!

    This is why they want to eliminate cash.

    They want to establish a world government surveillance society with a world electronic currency controlled by a world bank.

    Did you know that most central banks around the world are controlled by a handful of families. The US Federal Reserve and the Bank of England is a PRIVATE bank (it`s shares a owned by member banks whose shares are in turn owned by a few people). Basically, a private banking cartel owns and prints all of our currency and they collect interest on every dollar ever printed. By extension, they also own our government.

    Think about it, why would a sovereign government borrow money at interest from a central bank when they could print their own currency interest-free? And any country, which is not part of this finacial system of debt (economic slavery) is attacked (i.e. Lybia).

    For an education about money and the banking system look at the movies:
    “THE MONEY MASTERS” and “FROM FREEDOM TO FASCISM”.

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