Seth Lipsky: When Private Money Becomes a Felony Offense – WSJ.com

The next chapter in the struggle over sound money may be the case of a newly minted felon named Bernard von NotHaus. Mr. von NotHaus was convicted this month of counterfeiting money by issuing silver coins called Liberty Dollars. His company’s website says it’s been taken down by court order, and absent a successful appeal he could spend years in jail.

Mr. von NotHaus was convicted under a section of the United States Code that makes it a crime to manufacture or pass “any coins of gold or silver or other metal, or alloys of metals, intended for use as current money, whether in the resemblance of coins of the United States or of foreign countries, or of original design.” The law was enacted during the Civil War, soon after the Union began issuing the paper scrip known as greenbacks.

It is too soon to say what Mr. von NotHaus’s grounds of appeal will be, but it is not too soon to say that his case will be one to watch at a time when so many believe our economic troubles are tied to the fact that the dollar has become a fiat currency, and when leaders world-wide are calling for a new reserve currency.

So alarming has been the collapse of the dollar that the legislatures in as many as a dozen American states are considering using their authority—under Article 1, Section 10 of the Constitution—to make legal tender out of gold and silver coins. Lest the ghost of Friedrich Hayek or any other advocate of privately issued money get any bright ideas, however, the von NotHaus verdict will stand as a warning.

The warning is contained in paragraph 33 of the indictment handed up against Mr. von NotHaus in a courtroom at Statesville, N.C. It said:

“Article 1, Section 8, Clause 5 of the United States Constitution delegates to Congress the power to coin money and to regulate the value thereof. This power was delegated to Congress in order to establish a uniform standard of value. Along with the power to coin money, Congress has the concurrent power to restrain the circulation of money not issued under its own authority, in order to protect and preserve the constitutional currency for the benefit of the nation. Thus, it is a violation of law for private coin systems to compete with the official coinage of the United States.”

via Seth Lipsky: When Private Money Becomes a Felony Offense – WSJ.com.

Your Facebook ‘Likes’ are now paid ads

Continuing to fulfill its unspoken agreement with users to regularly provide them with new things to protest, Facebook is testing a new advertising program in which the things you “Like” are turned into advertisements in your friends’ feeds.�Same goes for locations where you check in.

Oh, and you can’t opt out.

It’s not everything you “Like,” of course — just the items with commercial potential.�Say you give Starbucks the “thumbs up” or check-in to Starbucks on Facebook Places. (That’s the example AdAge uses in its report on the new ad system, because hey, everybody goes to Starbucks.)

If Starbucks is participating in the “sponsored story” ad program, your friends receive double-notification of your fandom: An update in your friend’s newsfeed (because hey, everybody loves spam) and a “sponsored story” ad with your name, and possibly your comment, in the “Meet hot singles in your area,” section of their Facebook page.

What can you do about it? Not a whole lot.

If you “Like” something branded, your friends may very well hear about it. As before,�you do have the option of controlling which Facebook friends show up in your newsfeed. So if you’ve got someone who “Likes” or checks in to brands to an annoying degree, there’s that. �

Oh, and you can also be “inappropriate” — not that you should.

“The way that the product is today, a check-in post will show up in the ad feed exactly as the user wrote it,” AdAge points out. “So if a user checks into Starbucks with, ‘I hate this place, but it’s the only coffee around’ then that’s exactly what the ‘ad’ turns out to be.”

Once Internet pranksters wrap their hive mind around this potential, “I hate this place,” will be the least of Starbuck’s worries. That’s why advertisers also have the option of only allowing “Likes” without comments on the “sponsored stories.”

via Technolog – Your Facebook ‘Likes’ are now paid ads.

Facebook Credits Now Mandatory … reports Techcrunch

From Techcrunch … Facebook Credits now mandatory …

Facebook is about to ruffle some feathers. We’re hearing from one source that the social network is reaching out to game developers to inform them that it is making its own, official Facebook Credits currency mandatory. Our understanding is that it will be the exclusive currency as well.

It’s a move that’s been a long time coming — there has been speculation that Facebook would do this for a year now, spurring plenty of angst in the developer community. But Facebook has taken things slowly.

Despite telling the community that it was still early for the Credits platform and that it was considering various options, Facebook also spent the last year working out deals with the biggest developers — like Zynga, Playdom, Playfish, and CrowdStar — to make sure they were on board with its Credits system. Now that the developers with serious leverage are taken care of, it’s time for everyone else to make the change.

Facebook’s argument is that Credits are good for users and developers alike. There’s a higher barrier to entry if a user has to pull out their wallet to buy a different currency every time they play a new game — using the same currency lowers this bar. It also means there’s less of a lock-in factor, and Facebook can do its part to educate and promote the use of Credits to get everyone used to paying real money for virtual goods.

Of course, Facebook gets something out of it: they take an industry-standard 30% cut whenever users purchase anything with Facebook Credits. That can add up to a lot of money — we’ve heard elsewhere that Zynga is paying Facebook around $30 million a month for its Credits tax.

This is about more than purple cows and gold coins, too — in the long run, Facebook has a strong incentive to maximize the number of users who are signed up for Credits. Right now the vast majority of Credits are spent on gaming, but it’s very likely that Facebook will eventually begin allowing third-party websites to offer a ‘Pay With Facebook’ option, and that may include everything from digital content to physical goods. The more credit cards Facebook has in its system, the more appealing this option will become, and the more publishers and retailers will be willing to pay that 30% fee.

Facebook Credits – The de facto Online Currency?

acebook has begun testing a proprietary payment system with three of its applications, according to TechCrunch. As of this week, you can now use these apps–which include GroupCard, PackRat, Birthday Calendar and Facebook’s own icon gift shop–to purchase things using Facebook “credits,” which you can add to your account with an major credit or debit card.

Unlike other payment services like Amazon FPS or PayPal, Facebook’s credit system puts a scrip between your dollars and your purchasable goods. Naturally, it’s pegged to the dollar: 10 credits equals one U.S. dollar. Some tech pundits have already begun asking whether Facebook hopes to be the de facto virtual wallet for its 200 million users, and whether Google Wallet and other online payment companies are going to take this laying down. But more important is another question: if Facebook becomes the de facto online wallet, will Facebook Credits become the de facto online currency?

via Pay With Facebook? No Thanks. | Fast Company.

via Pay With Facebook? No Thanks. | Fast Company.

Pay With Facebook? No Thanks. | Fast Company

Lisa Rutherford points out in this excellent column at VentureBeat, any de facto online currency worth its bytes will have to be valid across several verticals. As Rutherford says, other online currencies have existed before–social network Hi5 has coins, Microsoft has Points, and Second Life has its own virtual bank. But never before has any one scrip shown the potential to reach so many users, with the potential to buy so much stuff.

I’m not an expert on numismatics, so there are probably more ramifications to this scenario than I’m acknowledging. But with Facebook Credits having different exchange rates all over the world, users will be able to hedge currencies, gain currency advantages, and buy and sell according to the currency markets. I’m not saying this is a bad thing; should Facebook Credits gain real gravity and the marketplace expand to real goods and services, there will be money to be made. But by making itself a marketplace and an issuer of scrip, Facebook may have invited a more complex economy than it ever intended.

Add to that issues of security, and the whole concept becomes troubling. Facebook has had problems with its application approval process as recently as two weeks ago, and can’t seem to kick its recent rout of phishing attacks, either. If you look at a company like PayPal, with its legions of account officers, its Fort Knox-level online security, and its IRS-like tenacity, you start to get an idea of the seriousness of the Web payments business. PayPal manages over 70 million active accounts, and safeguards the financial information for another 100+ million inactive ones. With 200 million users of its own, Facebook is going to need an internal PayPal of its own, and that’s a hard department to conjure from scratch–even for Silicon Valley’s golden boy.

via Pay With Facebook? No Thanks. | Fast Company.

via Pay With Facebook? No Thanks. | Fast Company.