Spending good money on nothing, it’s not a new concept.

Disclosure: I’m involved with an organization that has virtual goods and currency  — and yes, you can exchange real money for virtual goods in it.

fv_250.jpgThe virtual economy is heating up. GigaOm reports that Facebook Could Make $250M From Virtual Goods Next Year; make money from stuff that isn’t tangible. Stuff you can’t hold in your hands. Yet, the concept of virtual isn’t really new, it’s really just a new label applied to an ancient concept.

It is kind of interesting, when you think of it. For the vast majority of human history, ideas used to be the only type of non-physical ‘object’ that people would pay money for — ideas manifested as stories, concepts, music, inventions, etc.

Someone had to come up with the idea. And if it was good, then someone paid for that idea.

Then, the idea had to be transformed into reality — a play, a symphony, a building perhaps. The idea becomes physical (for a short time if you’re witnessing a performance). But still you have the physical manifestation of something created in the mind of someone.

Today, we have the virtual manifestation of ideas. Virtual in that when they manifest, they exist only in the medium they were designed for — a Farmville farm lovingly tended and nurtured by someone using a keyboard and mouse. Or an Elvish Archer who’s virtual skills and abilities have been carefully selected and honed.

Today’s virtual goods economy is wonderful, exciting, and offers huge new opportunities that didn’t exist before — from the swetshop goldfarmer to the (mobile-device-app-store) developer– doing work that has no physical manifestation can be both a pastime and a career.

But it shouldn’t surprise us that people and organizations can make money in this way — because we’ve been doing it for thousands of years. Only this medium is new.

This post of is one of many I publish weekly at the Future Shop Techblog. Read more of my stuff here.

My iPhone accepts Visa, Mastercard, American Express…

Yes it’s true. Not too far in the future, my Garage Sale will take credit card payments. Courtesy of a neat invention that you knew someone had to invent; the Square iPhone dongle. The premise is pretty simple:

  • Plug it into your iPhone
  • Swipe a credit card to complete a transaction

Square announced the device earlier, but recently launched a bit more promotion around it. TechCrunch had this to say:

Think paypal, but anyone can now accept physical credit card payments, too. With no contracts or monthly fees. People are sent receipts by text and email.

And according to the LA Times:

Beginning sometime early next year, Dorsey wants everyone to use Square.
“I think we’re going to give the Squares away for free,” Dorsey said on the phone from San Francisco on Tuesday, “because they’re pretty cheap for us to make.”

I’m thinking this is a pretty nifty device. It’ll help boost sales for mobile data devices, be they Android or iPhone flavoured. And the business model seems well thought out; the barriers to entry are pretty minimal.

0 to $60 in under 10 seconds.
Start accepting payment cards immediately with Square. No contracts, monthly fees, or hidden costs. Effortlessly manage all the money you take with an easy and intuitive interface.

Given the PayPal, eBay, Craigslist, Kijiji nature of the modern marketplace, I can see this device really taking off for folks who don’t really want to shell out for a full-blown bank merchant credit card account.

Square is a game-changer, and will be in your future too.