Thursday, December 22, 2011

Internet Currency > Real World Currencies

     I'm 3/4 of the way to my goal of making 100 USD from the game Second Life. I've found that buying and selling Linden Dollars is an extremely easy way to make profit, but I've found that selling them on eBay is fairly expensive. eBay helps themselves to 9% of my sales after I get paid for one of my item, and on top of that PayPal takes a comparatively small 2-3% cut. I made up a spreadsheet to find out the profitability of my Linden Dollars sales and it turns out that the larger amount I sell, the more profit I make. This is completely counterintuitive because the fees are also larger! The screen shot from my spreadsheet is below.
     Lately, I've been receiving messages on my eBay account from perspective buyers who want to buy larger and larger sums of Linden Dollars. The largest to date was an order of $50 USD worth of Lindens. For larger Linden Dollar sales I don't use eBay, but instead communicate with the buyer directly. Thereby avoiding the 9% cut that eBay helps themselves to. Which makes me happy because more money is put directly into my account?
     Enough with the numbers! The gist is that I'm making money, and it's coming from internet currency! My thirst for profit generation from these new and unbacked currencies could not be satiated strictly though Linden Dollars sales. I needed to find other currency to play around with! I've found two in the research I've done - Bitcoins and Ven.

     Bitcoins are a peer to peer anonymous internet currency created in 2009 that works off of the same principles that Torrents do. It is completely anonymous and decentralized (i.e. no one country owns the currency). The idea behind how Bitcoins are "made" is a long and horribly boring story. So here's the short version. Using a special bitcoin "mining" program, your computer's CPU/GPU solve hard math problems, and when the problem is solved your result is a number. If you by sheer luck get the correct number then the number is considered a bitcoin and your account is credited 50 Bitcoins (This is the current reward for getting the correct number). As I'm writing this article 1 bitcoin is worth 4 USD. So if you get the correct number just ONCE you have made 200 USD! That is an insane profit for just keeping your computer on! I'm going to run the program on my computer when I'm sleeping to see if I can generate some Bitcoins! For more information on Bitcoins look here: http://en.wikipedia.org/wiki/Bitcoin
     Ven, an internet currency created in 2008, can be bought and sold using the web site hubculture.com. The Hub Culture site can only be accessed via an invite, so if you want an invite email me or leave me a comment below! The currency is totally unlike Bitcoins because it is actually backed by commodities. One of the most interesting commodities that Ven can be traded for is carbon credits which are essentially permits for companies to emit a certain amount of CO2. So not only can you make money using Ven, but you can also feel good about it because trading the currency is indirectly supporting green technology! Lets me honest though, all I care about is the potential for profit.
     I'll do more research on these currencies to see if I can find a way to make profit off of them. Who knows if I can top the success I had with the Linden Dollars though! Have a good Christmas everyone :)

Questions, comments, or spam, send it all here: tentoamillion@live.com

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