Many forums, particularly promotion forums, have a virtual currency system which allows you to exchange “points” earned by posting for services, either from the forum staff or from other members. Most of you will already know this, and Forum Promotion is one of those forums which has a particularly interesting virtual currency. FP$ can be exchanges for several types of services, including posts, reviews, and advertisements. These types of services can also be bought for real money, which implies that it is possible to compare the value of FP$ against the value of real money, by looking at how much of each currency it costs to buy a particular service.
How Valuable is FP$?
The question which this article is asking is: “How valuble is FP$?” The type of answer which I am looking for is not “very valuable,” or “not very valuable.” Instead, I am looking for a specific number of US dollars which can be used for the purpose of assessing value. It states in the Forum Promotion guidelines that FP$ cannot be exchanged directly for real cash. However, if you are assessing whether or not to purchase something like a post using real cash or FP$, or if you are assessing whether or not someone is selling an advertisement at a reasonable cost in FP$, it is important to know how much real money that advertisement or post is being sold for, when you take into account the value of FP$.
So, how do we figure out how valuable FP$ is?
When economists deterine the value of the US Dollar against the value of the Euro, they monitor supply and demand. That means that every time I have a euro and want to exchange it for dollars, the value of the US dollar goes up. However, FP$ is not allowed to be exchanged for US dollars directly. But, you can do this indirectly, by exchanging FP$ for something which you could have, alternatively, exchanged for using US dollars. So, to figure out how much FP$ is worth, what I will do is figure out the cost of a post on a forum in FP$ and the cost in US Dollars, and them compare the two.
A single post on a forum, bought from the FP marketplace, is worth about $0.10. That means that if you want someone to make ten posts on your forum, you have to pay them approximately $1. If you want them to make 100 posts on your forum, the going price is about $10. This rate will occasionally change, and better deals are offered, but this is a very common rate which can be found from a number of topics in the board. Here are a few examples of current exchanges in US dollars which use the rate of $0.10 per post. Example #1, Example #2, Example #3.
Now that we have established the value of a post in USD, what is the value of a post in FP$? The going rate for a post in the FP exchange boards is currently 10 FP$ per post. That means that for 100 FP$, you can get someone to post 10 posts on your forum. For 1,000 FP$, you can get someone to post 100 posts on your forum. Here are a few examples. Example #1, Example #2,
These examples indicate that $0.10 and 10 FP$ have the same value. That means that the value of USD and FP$ is governed by the following very basic mathematical equation.
$0.10 = 10 FP$
To make this equation simpler to use, I will use a very simple algebraic rule: I will divide both sides by 10. That means that the equation is still valid, just expressed in a slightly different way.
$0.01 = 1 FP$
That means that every single FP$ is worth one cent in USD. Now that we have established this relationship, it is very easy to figure out the value of a number of other things. Here is a table. Note that the current exchange rate for USD to EUR is $1 =€0.91
United States Dollars (USD)
1 FP$ = $0.01
10 FP$ = $0.10
100 FP$ = $1
1,000 FP$ = $10
10,000 FP$ = $100
1 FP$ = €0.01
10 FP$ = €0.09
100 FP$ = €0.91
1,000 FP$ = €9.07
10,000 FP$ = €90.77
Using the above tables, you can approximate the value of your own FP$ supply in USD. You can also figure out the exact amount by simply using a calculator to multiply your current FP$ supply by 0.01. At the moment, I have 4,816.96 FP$. In USD, that is worth approximately $48.17.
FP$ is a currency which has a tangible value, even though it cannot be converted directly into a real-world currency. In this article we established a baseline for comparing the value of FP$ and USD. In future articles in the Forum Economics series, I will be discussing how the ideas of inflation and Deflation effect forums, how much other things are worth in FP$, and how to assess the value of your own forum’s virtual currency.