Tag Archives: Zynga

Bitcoin. Currency for the real life Matrix.


Bitcoin_logo

Non-nerds be forewarned: I’m taking a deep dive into geekville.

I’m talking about Bitcoin, which, until this weekend, I had never heard of.

Mind you, I had heard rumors of a digital currency.

But I thought that they were talking micropayments, like buying coins in a Zynga game.

I never thought that there was an actual digital currency.

And people were using it for real life transactions.

So you can imagine my surprise Friday, when I read about Bitcoin in Techcrunch and realized that it was real.

Not only is digital currency real, Bitcoin transactions have eclipsed $1 billion.

That’s billion with a ‘B’.

Bitcoin is a decentralized digital currency based on an open-source, peer-to-peer internet protocol.

It’s been likened to PayPal, in that it’s an alternative money transfer system, which enables you to place secure transactions online.

Payers and payees send transactions to and from their wallets or Bitcoin websites without any intermediate financial institution.

Bitcoin’s transactions are secure because they use cryptography, the same technology used by larger online banking institutions.

Cryptography is just a fancy word for encryption.

But Bitcoin’s encryption technology utilizes an extremely complex mathematical formula that ensure the authenticity of each Bitcoin transaction.

Essentially, Bitcoin looks at a block of sequential transactions to determine if they are valid.

Bitcoin’s software records transactions in a log or “blockchain” stored across the peer-to-peer network every 10-minutes.

Subsequent transaction records make preceding transactions permanent parts of the blockchain.

Once Bitcoin receives six confirmed records or “blocks” a transaction is usually considered confirmed.

Bitcoin’s protocols makes it virtually impossible for cats to get over.

That means zero fraudulent transactions.

The reason Bitcoin is newsworthy is because it passed that billion dollar mark and now the Feds are trying to determine how to regulate it.

Bitcoin does not involve any traditional banking institutions and is completely exempt of regulations of any kind.

It is an ecosystem unto itself.

Whole communities have sprung up, transacting solely in Bitcoins.

Bitcoin accepted here

In fact, you’ll find several sites sporting the Bitcoin logo, advertising the fact that they accept Bitcoin payments.

At this point, I’m sure many of you are scratching your heads, thinking, “what’s a Bitcoin?”

Recognizing the limited intellectual capacity of many of my readers, I’ve included a visual aid.

Next time we’ll examine the psychological implications of the blue pill red pill dilemma.

Please bring your marble notebooks.

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The IPO is Nice. But Quiet is Kept, Facebook’s Micropayments Are the Truth!

With this IPO, big brother is getting bigger.

While everyone is agog over Facebook’s IPO, and $100 billion valuation, blah blah blah, a more interesting undercurrent (for me at least) is the fact that they made more than half a billion dollars from micropayments on their payments platform.

More than half a billion dollars from micropayments!

If you’re not familiar with micropayments, they’re discreet payments made within platforms like Facebook, to purchase real and (often) virtual goods.

Micropayments (or micro-transactions) were initially developed as a way of enabling the sale of online content.

They were envisioned as small payments ranging from a few cents to a few dollars.

Micropayment transactions enabled people to sell content on the internetand served as an alternative to advertising revenue, which was traditionally the only real way to make money online (we’re talking pre-ecommerce proper).

Having been steeped in the mobile world, I’m abundantly familiar with micropayments, and the impact that integrating a seamless billing mechanism can have on a campaign, business or business model.

Micropayments work well on mobile because content companies connected to mobile aggregators are able to tap directly into the carriers’ billing systems.

As such, they enable subscribers to purchase ringtones, wallpapers subscribe to alerts and other premium programs, without having to input credit card or other payment details.

KGBKGB made a killing on mobile!

KGBKGB was one of the most successful mobile content companies to implement an effective premium campaign using mobile billing.

KGBKGB is like Wikipedia for your phone. Text a question to 542542, and for 99 cents, they’ll send you the answer.

Other companies, seeing the success of KGBKGB, soon were launching their own programs, leveraging WAP or mobile sites, to offer increasingly sophisticated products and services to mobile subscribers.

Zynga made mirco-transactions a real strategy for social media gamers.

If you’re familiar with Zynga, then you’ve probably seen the most effective application of micropayments in a mobile, online or social media context.

Zynga, the creators of Mafia Wars and Farmville (among their other titles) popularized the practice of encouraging users to pay real money for virtual goods and currency.

If another person sends me a Farmville request....

Built primarily within Facebook’s platform, Zynga’s social media games, allow users to make purchases within their games, monetizing their games.

I’m sure that a large part of Facebook’s micropayment revenue comes from Zynga’s successful implementation of it’s intra-game payment model.

Facebook’s payment platform, which game developers are required to use, is becoming an increasing contributor to it’s revenues, making Facebook less reliant on advertising sales as the sole revenue generator.

Much in the same way that Apple takes a percentage from music publishers and authors who make their content available for sale in their store, Facebook takes a piece of every payment transaction within it’s platform

A large part of why Facebook may continue to be successful, comes from the popularity of their platform and developers’ desire to access this massive audience.

I’m sure that their IPO will be equally successful, as folks belly up to the bar to get a piece of what may invariably be the largest initial public offering ever.

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