Entrecard Economy

Several of my blogs are members of Entrecard, a social community. Overall, it is a good place to be with friendly bloggers and quality writing. The way the system is set up has problems, though. Members visiting each others' blog drop their card and earn credit. Credits then are spent on advertising on blogs and buying services from Entrecard market.



The problem stems from the fact that by getting credit from Entrecard instead of the blog owner, the economy always creates inflation. Think of it this way:

Under normal circumstances you will pay to the service provider for each page view generated. In EC, Entrecard pays, not only to the visitor but also to the owner.

Second problem is Entrecard has no or can not generate income with the present system. To overcome this, they have introduced paid ads to the system, much to dismay of its members. What is worse, they have decided to spend 75% of the revenue to buy back the surplus credits, eccles as they call them, from members.

As it must be obvious to most, this will only create more inflation and eventually the depreciation of eccles by way of people trying to max out their income with an additional unseen cost to most bloggers: very high bounce rates.

If the idea is to create a virtual economy, you have to play by the rules. In other words, there has to be central banknote issuing authority, and a trade system where buyers pay to the service provider: bloggers pay to either Entrecard or the visitors. And income has to be earned in the virtual market just like in real world.

Mixing a paid ad system without correcting EC according to basic economic principles is not good.

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