The their problem, which is why 'money' is 'money' is that it could be very easy to avoid taxes if dealing in such a system. Yes, they could create a virtual economy, but I am sure that HMRC would take a dim view of it from that aspect.

Yes, there are certain regions in this country that use alternative currencies, or even bata systems, but usually the taxman gets agitated about it because such trades don't go through the usual channels, and so the government loses out. Generally speaking, if money changes hands, then tax is levied in some fashion.

All this reminds me of Beenz - remember that? Another virtual currency that sank.

I don't think these are going to work. It seems to me that the only online currency that has any traction is World of Warcraft - and some countries are now levying taxes on virtual items bought with that virtual currency.

Bitcoins will survive for a while. There are a number of darknet sites that accept them & due to the nature of these sites they're not going to accept any currency that's traceable.