There's money. People (me included) carry it around in their wallets and save small pieces of it in the ashtrays or cup holders of their cars. And they buy things with it - hamburgers, gasoline, and sometimes other small things. Then there's checks and credit cards. We pretend they're money and much of the time that works for us. They're closely related to money.

Then there's RockYou Pets from Hi5, Linden Dollars frm Second Life, and PEDs from the planet Calypso, in an online gaming world called Entropia Universe. How much like money are they? Some would say they are money - to the extent that you live your life in a particular virtual world. Some of them are actually exchangeable in the real world; 250 Linden Dollars is worth one US dollar. You can provide a service or sell a product in Second Life, change the Linden Dollars into "real money" (whatever that is now) and take it to the grocery store or the mall. PEDs can also be converted back into real money; 10 PEDs equal one US dollar.

A couple of questions come to mind. First, how close are we to seeing a dominant virtual currency come into existence that could be moved from game to game and virtual world to virtual world? Answer: MySpace and Facebook both seem to be working on that.

Second, how close are we to seeing these virtual currencies begin to bleed over into the non-virtual world? Answer: I don't think I'm going to see people spending Linden Dollars at Wal-mart any time soon, but VentureBeat points out a number of issues where real world legal issues about money are bleeding over into virtual worlds. Second Life closed its casinos rather than see government regulators invade their cyberworld. There have been other examples.

The issue of virtual currencies is going to be a fun one to watch over the next few years. And it has real world business implications. A few link...

• Teen entrepreneur Catherine Cook says myYearbook's Lunch Money adds up - VentureBeat


• Hi5 begins giving developers access to its virtual currency - VentureBeat


• Zeevex Debuts Virtual Currency For Online Games - TechCrunch


• Priority for MySpace: Do something about those virtual currency plans - VentureBeat


• 'Virtual currencies' power social networks, online games - CNN


• Virtual Currencies Gain in Popularity - BusinessWeek

© Bohman