Trading Digital Currency

More and more companies are creating their own currencies for online exchange of goods and services. With Microsoft’s release of their iPod clone, they created a system where customers buy ‘points’ to purchase media. Some have a negative views on it, like applematters.com:

Adding a completely unnecessary layer of confusion is, in and of itself, a bad thing. But it wouldn’t be Microsoft if they didn’t go that extra mile to rape their customers. You see, when you buy these “points” you can’t buy them as you need them, you have to purchase them in Microsoft defined denominations. In other words, Microsoft just invented a currency and they require you to invest in this currency before they can sell you any music. And just if you were wondering, here are the denominations:

$5 = 400 points
$15 = 1200 points
$25 = 2000 points
$50 = 4000 points

But wait, it gets BETTER! There isn’t a 1 to 1 correspondence between the value of a “point” and the value of a penny. Let me break out some math for you:

If
$5 = 400 points
then
$1 = 80 points
therefore
100 cents = 80 points
meaning
1 cent = .8 points
or
1 point = 1.25 cents

But one company stands out above the rest for a new digital currency. Linden’s Lab’s Second Life has not only a currency with a exchange rate, but one can actually trade it like they would trade the EUR/USD! The USD/SLL is the US Dollar against the Linden Dollar. There’s market data on the company’s website and even a site that offers charts and currency exchange. You can see charts of price and even volume, like this one:

Chart made using slexchange.com.