China wants to regulate your (digital) gold

China's reserve currency proposal might be getting the big financial headlines today, but for millions of online games, the People's Republic's crackdown on imaginary gold is a much bigger story.

If you were a level-three dwarf but had insufficient magic points to defeat that nine-headed dragon, what would you do? Many online multiplayer gamers would probably whip out their credit card, buy a few hundred gold pieces for $5 and pump themselves full of magic before venturing into the dragon's lair. Until now.

The practice of intentionally earning and hoarding game currency -- with the ultimate aim of selling it to others for real money -- was declared illegal this week in China, where as much as 80 percent of the world's so-called "gold farming" takes place. The gold farming craze has spawned "an enormous Chinese workforce earning 30 cents an hour playing MMOs and harvesting treasure to supply the major retailers."

In all, InformationWeek reports, nearly $150 million in virtual currency was traded last year. Worldwide, the industry rakes in some $1 billion a year from players eager to make their mark on their favorite fantasy universe online.

Buying gold from the farms might come off as cheating when compared to the honest players who earn gold through their own hard work. But to look at it another way -- isn't this all about entrepreneurial spirit?

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