Money In A Brave New (Virtual) World

I admit that I enjoy the odd Guild Wars game once a week. It's a good chance to meet up with some overseas friends, take out some monsters and generally have a good time.

I earn Guild Wars gold from killing monsters and such, and use this gold to buy goodies such as better armour, better weapons, more skills, and other things. For me, though, I don't place any real-world value to this gold, except to get more stuff.

However, it seems that for others, a real world value can be found. Search Ebay for "World of Warcraft Gold", and there's a ton of guides. However, there are sites where you can see that the they list an exchange rate (currently it is $0.50 USD per 100 Gold)

There are now people who classify their "job" as making virtual money. They log in to World of Warcraft, and "earn" virtual money to exchange. Are they, in the words of Peter Drucker, just a new type of information worker? Do they do what we do in the real world ie transform information and add value?

Take a look at Second Life. It is a virtual world, where people can create and charge for their own creations. Last year there was $20m worth of transactions on the game itself, and $3m in currencies. Yes, this is a miniscule amount compared to the trillions that are traded on the normal currency exchange, but the mind boggles!

So what is the difference? Our current monetary system is not backed by gold anymore, so both Linden Labs (who own Second Life) and Zimbabwe can print as much money as they like (often with disastrous consequences). Our currencies are backed by the country's economic growth, inflation and productivity, as well as cross-border trading of actual financial assets. Can these be related to a game such as Second Life?

Will there be a day that people will hedge their currencies against a virtual one? Will traders work the arbitration between the virtual currencies to make a profit?

How regulated will these virtual currencies become? I think that the more people start getting into these until they sort out these other things such as intellectual rights, user rights within the system and ownership, it will continue to be something that is a anomaly, rather than a norm.