At some point someone's going to set-up a succesful virtual currency exchange and the government is going to step in for creating an illegal currency.

Wouldn't it just be easier to find some small country's government to sanction it as legal tender of that country?

I was actually wondering the other day whether Apple does any kind of arbitrage behind the scenes of their international app store sales. Seems like they could be making a lot of extra money that way.

Maybe there's an opportunity for a startup here?

How should that arbitrage work? (As far as I know exploiting arbitrage on foreign exchange markets tends to need insane amounts of money.)

Care to elaborate? Given how addicted the Gov is to printing cash, and the immorality of our Fed/Treasury/Gov cabal, I would love to see a big challenge go to the supreme court.

The Fed/Treasury/Gov triumvirate is getting mortaller every time it has to monetize treasury bonds.

50/50 revenue split ... good for them if it works, but I don't usually see ecommerce providers taking that big a cut ... except maybe amazon

From my VERY BRIEF look at the system, and if what they say is true about how easy it is to integrate, I think small-time game developers or even medium-sized flash game developers would be willing to take this hit.

I say this because I honestly haven't ever played a flash game yet that had this sort of system (most likely due to the complexity of it, both in the backend and frontend), and if a small-time game developer can spend 10 minutes setting this up with Heyzap, then its money well spent (the 50% loss in revenue) since they'd probably not take the time to implement the feature themselves.

Of course big-time flash game developers probably won't be willing to use this system if their games are that popular or if they have the resources to dedicate to creating their own system.

yeah I think developers would prefer Kongregate's model better since they give 100% of revenue to the game developer.

Kongregate only offer up to 50% rev share on the advertising and if they offer 100% on the virtual goods part then its not a business model for them.

that's for ads, the tips go 100% to the developer

edit: it may not be a business model for them, but that's kinda the point. It makes Kongregate look more developer friendly.

HeyZap has a lot of risk and little competition. If the model becomes proven, other companies will jump in and drive down the margins.

Little competition? There are a TON of companies in this market space, many of them well established. Just off the top of my head: Super Rewards, Offerpal, Gambit, Peanut Labs, etc...

And those companies are already driving down the margins. Most of the players in the market offer a 75% cut at minimum.

EDIT: Looking at their CPA page now I see that they're implementing Gambit. Guess they're in the same boat.

This is the modern equivalent of the quarter fed arcade game. Instead of games designed to kill me off not matter what I'm now going to see games designed to limit my progress no matter what? I can't say I'm looking forward to this bold new era of incentives for games designed to try and up sell me.

They will have to compete against games that are nicer to you.

what does USV stand for in the title?

Union Square Ventures http://blog.heyzap.com/uncategorized/heyzap-receives-funding...

Interesting that Zynga and Heyzap are both USV-funded now.