The Asian Economist

EntreCard is an advertising platform for bloggers. You gain EntreCredit though dropping your card on other people’s blog, or other people droppingtheir cards on your blog, or other people could buy advertisement onyour blog. Amazingly though, EntreCredit can also buy you other things such as a logo design, a review of your blog, even iTunes Gift certificate! EntreCard works because it forces people to go onto othermember’s blog and drop a card. Some believe this is bad traffic, butfor me traffic is traffic. Back to EntreCard.

This “miniature” economy that EnreCard is creating is booming, opposite what the real U.S economy is doing. They have over 2,500 bloggers and growing in less then 3 months of opening. Basically the more sites you visit, the more cards you drop, the more friends that drops a card on your blog, the more EntreCredit you can get. People work hard to gain those credits. In a way, EntreCredit does have real world value. People actually are selling EntreCredit for real-life currency, and you can also buy EntreCredit with real-life currency. Bloggers are evening thinking about putting services they buy using EntreCredit on their tax return .

So in the real economy, the government controls the flow of how much money is circulating in the market through monetary policy. How is the flow of EntreCredit regulated? See, when you want to advertise on another member’s blog using the EntreCard widget, you have to pay them with EntreCredit. To prevent the overflow of EntreCredit, EntreCard get 75% of the fee and the site owner only get 25% of the fee. So there, 75% of EntreCredit goes back to the “central bank” of Entrecard, if there is one, I personally think it just disappeared into thin air. Anyway, that’s a 75% tax on your income! Wow imagine paying the government 75% of what you earn.

One problem that EntreCard will run into is the black market of buying and selling services using EntreCredit without having to pay that gigantic 75% income tax. For example I just bought a one month advertisement on another blog for 300EC without using EntreCard as the middle man (EntreCard allows you to send Entrecredit directly to other members). I didn’t have to go through EntreCard because I wasn’t buying the adspace on the EntreCard widget, just another adspace they had open. Here there is no 75% tax on the EntreCredit so all 300EC stays in the economy. Other services are being bought without having to pay the 75% tax. Will this be a huge problem
in the future? If more of this black market activity keeps going on, inflation will set in in the Entrecard economy.

What’s the big dea? Right now one card drop on another blog is one credit, one person dropping on your blog is also one credit. If the number of EntreCredit starts to increase dramatically in the market, then the value of those EntreCredit won’t be worth much. Take for example my 300EC for 1 month of advertisement on a blog (that is a huge bargain by the way), if in the future that advertising cost 600EC then it means that I would have to drop twice as many cards! One hour of dropping can turn into 2 hours of dropping and it can increase over time if too many EntreCredit is out in the market. In the future, people won’t drop card anymore, becausse one EntreCredit
is not going to get them anything! They may go into offering services for EntreCredit and charging a huge price because so much EntreCredit is in the market, they are worthless. Will people begin to stop dropping cards?

Solutions? Stay tune…

Your thoughts.