Micropayments Will Never Work With False Currency March 25th, 2009
It seems that the lessons of history are lost on the masses. Here is a historical truth: purely online currencies fail. Here is some proof, take a look at these dead companies who tried to introduce a new currency, and died:
- Millicent
- ECash
- MicroMint
- PayWord
- SubScrip
- NetCash
- iKP
- Mondex
- CyberCoin
- Mini-Pay
- beenz
- flooz
Not all of those companies did exactly introduce a new currency, but it gives you a good idea of how micrpayments have gone so far on the internet. Zune, the Microsoft music system, has a alternate currency (the same as on the Xbox). It is reviled, as are Xbox points. Why? Well given their idiotic conversion of 79 points to the dollar, you are always sitting with 10 points with nothing to do. Inefficient, etc.
This is the same problem that all fake currencies have. Once they are converted from dollars or euros, and you have extra, what can you do with it? Your local cafe does not accept Xbox points, shockingly. Also, why is there this need to move from real currency? Is it assumed that people are so foolish as to not be able to work the conversion ratios out in their head? Here is a tip, they can.
It merely adds another step to something that is annoying enough (ecommerce). First dollars, then “beenz,” then checkout, but first pull do the conversion. Following the conversion, make sure that no one can see you using “beenz,” then purchase your good or service. Now stare at your remaining 89 “beenz,” real market value 17.3 cents. Stupendous, you are an idiot.
I do not say all of this to mock Spare Change, a micropayment startup that seems (against the odds) to be gaining traction. They were written up in TechCruch today, here. Still I feel that the lessons of history are strong here. People do not like alternate currencies, and they do not work. If Spare Change proves this wrong, then I will gladly backtrack and apologize. Eating words is never a problem.
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