Twitter recently launched a virtual currency that users can use to donate to charities or give to friends for doing good deeds. The conversion rate is equivalent 10 cents for 1 Twollar, but users pay $0 to start with 50 Twollars. All in all, Twollars is a Twitter "thank you money" which is designed to benefit good causes. The process behind Twollars is as follows: users donate the currency to charities, brands sponsor charities by purchasing the Twollars from the charities and the charities get real world dollars from the sponsor. If 5000 Twollars are donated to a charity event then the brands would make the pledge to pay for the event $500. In the article, "Twollars: An Innovative Approach to Fundraising on Twitter", http://mashable.com/2009/05/26/twollars/, Stan Schroeder goes into details about the redesign and the full life cycle of commerce using the currency.
The technology behind Twolllar is not complicated or costly. Queries are used to parse Twitter's data and look for a format such as "20 Twollars @username to charity name"
The Twollars concept emerged from the social media environment, and I believe it should be used as tool to help traditional marketers approach this channel more effectively. Traditional bands tend to approach the social media market with a broadcast mentally as opposed to a user participation ideology. The Twollar approach facilitates user involvement by interacting with the brands as well as the charities.
I believe this model has legs as long as Twitter survives by generating revenue from other sources. Twollar can replicate this model to other social networks and cross trade the currencies across multiple platforms. Twollars needs to maintain its reputation by not over supplying the market with too much cheap currency and therefore diluting the value even more.
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