Voice of America reports on a new Chinese social network, YY. The name is similar to that of a rival, QQ, aka Tencent. You may recall that QQ Coins caused an intervention by the Central Bank of China; they were being used too much as normal currency. The currency of YY is a rose. But guess what, you can make real money with virtual roses. VoA tells us that musicians will set up a video site in YY (video is a capacity that QQ does not have) and if people like the music, they give the band a couple roses. The roses are worth something, and there are stories of significant incomes from this practice.
Couple things to note. First, we are seeing more and more examples of direct transfer of value from one average schmoe to another. Things like, people using Square to be credit card merchants, or PayPal, or people shaking their smartphones together to make a transaction. Imagine a future where there are billions of tiny money receivers, not just tiny money spenders. Every man, woman and child is a firm. The middlemen fall away; I wouldn't want to be a young guy in the credit card business right now.
Second, it's striking how quickly this thing popped up. It targets middle- and low-income Chinese, which means, it came out of the white space. There's an awful lot of white space out there. There are billions of lower-income people just now getting access to smartphones. Social norms are changing - how much longer will we say "women don't play games"? Farmville once had 80m users, and if we take churn into account, maybe ten times that saw it at some time. That's still a drop in the bucket. Deeper experiences like WoW have been seen by even fewer people. There's a huge upside and it's not always going to arrive gradually.