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Flooz.com; Bubbles, Banks & Depressions March 26, 2008

Posted by olvidadorio in Money.
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Just stumbled across a phenomenon of the big dot-com bust called flooz.com. In a CNET-article on the top-ten of dot-com busts it says:

For every good dot-com idea, there are a handful of really terrible ideas. Flooz.com was a perfect example of a “what the heck were they thinking?” business. Pushed by Jumping Jack Flash star and perennial Hollywood Squares center square Whoopi Goldberg, Flooz was meant to be online currency that would serve as an alternative to credit cards. After buying a certain amount of Flooz, you could then use it at a number of retail partners. While the concept is similar to a merchant’s gift card, at least gift cards are tangible items that are backed by the merchant and not a third party. It boggles the mind why anyone would rather use an “online currency” than an actual credit card, but that didn’t stop Flooz from raising a staggering $35 million from investors and signing up retail giants such as Tower Records, Barnes & Noble, and Restoration Hardware. Flooz went bankrupt in August 2001 along with its competitor Beenz.com.

What were the actual pitfalls here? (more…)

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The Ripple Project March 11, 2008

Posted by olvidadorio in Money.
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There’s an interesting project called Ripple (with a running system) that’s creating a protocol for exchanges in arbitrary currencies, focusing on the trust- and social networking aspect of money. It has quite a few impressive features, it’s open-source, decentral etc. The most important point to me is that their protocol does away with the necessity for people to know or trust each other – and nevertheless perform a trusted transaction.

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New Internet Money March 10, 2008

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Most National Currencies, such as Euro, Dollar, Yen or Renminbi are not backed by sufficient gold reserves to cover the total value of money in circulation. Nevertheless, they are used and trusted. But why?

Well, probably because they have the backing of a powerful state. We rest assured that if push comes to shove, our government would do anything to protect our economy from collapsing. That’s how money gets a value: It’s nothing but numbers with an army and a navy.

What if there were a different type of money? What if it weren’t based on a single nation, but on a very different kind of power?

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