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Wednesday, December 18, 2013

Floozy... Wait, No, Terrible Title, God, Aack

The price of bitcoin has straight-up crashed by half, on news that the Chinese government has banned their country's financial institutions from accepting it, exchanging it, or having anything to do with it. Now, I could join the throngs of observers whose reactions amount to 'DIE FASTER, DAMMIT'. But then, I already attempted to do that back in May, when the Commodity Futures Trading Commission took a run at bitcoin, and that proved premature.

I have a better idea.

Let me tell you about a currency called flooz. Yes, that was its name. Founders Robert Levitan and Spencer Waxman took an Arabic word for money, fuloos, and altered it to 'flooz'. Flooz, the hallmark of flooz.com, was created in February 1999 as part of the dot-com boom. Levitan had just left a successful venture, iVillage- which is still around after a 1995 launch, making it outrageously long-lived in Internet terms- and his personal stock was hot. As such, he had no trouble launching Flooz.

The idea was this: a consumer would purchase flooz, and send it in an e-mailed greeting card to someone. Flooz could then be used as currency at participating retailers. The intent was that Flooz would make money from commissions paid to them by the retailers from purchases made with flooz. They were not the only company with this idea, so they had to stand out from the market.

That certainly tends to happen when Whoopi Goldberg is your spokeswoman. Of course, Whoopi Goldberg also costs a lot of money.

Now, back in those days, people were scared to give their credit card number over the Internet, as they were with most other information, such as their real name. Nowadays, that's not an issue, but back then it was, so a digital currency that didn't require you to supply a credit card number to exchange was useful to some people that wouldn't want to exchange actual legal tender. You needed one to buy the flooz in the first place, but after that you were in the clear. However, other people that aren't consumers also find the lack of credit card numbers useful.

People who can steal one credit card number, for example.

In June 2001, the FBI called Flooz to inform them that $300,000 in currency had been sold to credit card thieves in Russia and the Philippines over a three month period as part of a money-laundering operation. Needless to say, this money probably was not going to be spent at books.com and Tower Records. The trigger for this was the people with the stolen credit card numbers finding strange charges on their accounts, and complaining to the credit card companies. The credit card companies, in turn, decided that this was not something they wanted to be a part of anymore, and stopped processing flooz transactions until they'd built enough money up in reserve to cover the fraudulent transactions.

And with a key player in the transaction system out of play, that was the whole ballgame. Consumers began getting error messages trying to purchase new flooz. The retailers honoring flooz took down their links to it. Flooz, the company, stopped getting money from people buying flooz, because nobody could buy it anymore. The end came very quickly: in August, having burned through $35 million, they closed access to online accounts and said only that they would have an announcement "soon". That announcement would, of course, be the company's closure... and when that happened, all the flooz in the world vanished. E-Commerce Times, linked earlier in this paragraph, quotes one poster from the MyCoupons forum:

"I am going to cry. I lost about $350.00. $200.00 of this was NOT prize money; it was MY hard earned real money! I am so sick right now. I was saving this money for Christmas presents. How can they do this to people? I have a good mind to write to Whoopi Goldberg and tell her the only reason I bought Flooz was because she was the spokesperson. I can't believe they can just steal our money like this."

The bitcoin subforum on Reddit is currently stickying a link to a suicide hotline.

In all seriousness, if that last link is relevant to your interests, put down whatever it is you've picked up. The sun will rise tomorrow.
I am going to cry," one poster wrote. "I lost about $350.00. $200.00 of this was NOT prize money; it was MY hard earned real money! I am so sick right now. I was saving this money for Christmas presents. How can they do this to people? I have a good mind to write to Whoopi Goldberg and tell her the only reason I bought Flooz was because she was the spokesperson. I can't believe they can just steal our money like this." - See more at: http://www.ecommercetimes.com/story/13107.html#sthash.CL8T61KK.dpuf
I am going to cry," one poster wrote. "I lost about $350.00. $200.00 of this was NOT prize money; it was MY hard earned real money! I am so sick right now. I was saving this money for Christmas presents. How can they do this to people? I have a good mind to write to Whoopi Goldberg and tell her the only reason I bought Flooz was because she was the spokesperson. I can't believe they can just steal our money like this." - See more at: http://www.ecommercetimes.com/story/13107.html#sthash.CL8T61KK.dpuf
I am going to cry," one poster wrote. "I lost about $350.00. $200.00 of this was NOT prize money; it was MY hard earned real money! I am so sick right now. I was saving this money for Christmas presents. How can they do this to people? I have a good mind to write to Whoopi Goldberg and tell her the only reason I bought Flooz was because she was the spokesperson. I can't believe they can just steal our money like this." - See more at: http://www.ecommercetimes.com/story/13107.html#sthash.CL8T61KK.dpuf

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