User error or calculated manipulation?

Is it me or do the gigantic swings of lump sum transactions on LindenX that cause deflation seem to be looking less and less like an accident with an extra 0?

I mean look at the market data of day high's over the last week or so and you will see what I mean...the 1000L for 1usd trade and number far bigger and trades far more caustic are becoming the norm and not the anomoly.

Is there any recourse against this kind of market manipulation?

Calix,

Do you think it would be possible to start a SIM with an economy based on only the US dollar? Or maybe our own currency based on a USD standard? Perhaps 8 or 16 of us could get together and form some kind of SL bank. Of course there would be no financial regulations to prevent fraud, but it could be based on a good community standing rating among a tighter community. Perhaps an in world 3rd-party credit and/or better business bureau. We could buy and sell based only on the US dollar.

I'm sure I'm short-sighted here someplace...

It won't work.. Everything in the game will cost too much money.
One L$1 Linden Dollar Equals US$0.003/cents. In a game that used
the USD as its basis, the minimal unit of currency would be $0.01/cents.
30x times more expensive than the SL's basic monetary unit of
exchange.

The problem isn't with the Virtual Currency. The probem is with
the Monetary Policy of the Second Life Gov't (ie: King Phillip).

How many ppl in SL make their big profits off of L$1 trinkets. I think stuff like that may just be "freebie" marketing items or disappear completely. I'm of course referring to the USD based SIMS. Those small items will always exist in the rest of the grid.

I think you meant 3x, not 30x.

Cheers,
Lawrence

Actually, if there were a good way to immediately make US$ transfers (and I don't think even PayPal allows easy and low-cost small-money transfers such as a penny)... dropping the L$ and allowing US$ currency would be absolutely fantastic.

Yes, a penny is about triple the cost of L$1. However, do I think that anyone would seriously complain over spending a penny instead of an L$? If I went to YadNi's junkyard and spent US$1 for 100 items instead of L$100 (which right now has a value of about US .375 cents), I don't think it would cause me any loss of sleep tonight.

A major advantage is that the market would immediately stabilize and all the gripes about stippends and LindeX and all that nonsense would disappear. Of course, Premium uses might gripe because then their weekly stippend allowance wouldn't exist. And merchants would probably gripe because they'd have to lower the cost of everything to convert to the new standard (items currently at L275 would have to be dropped to US$1). That would be a LOT of work.

Just looking at one view of the issue. Moot point since at this time there's no known way to transfer a penny directly. Considering today's electronic market... there should be. But can't really happen nor would it seems as even a feasible possibility in the near future.

Sounds like a lovely theory and I'd be all for it, but I think this would just create havoc (not havoc 2 btw) with TOS and even a way to apply this. Maybe some sort of proposal or joint discussion on the matter would help, I do not know.

Either way the sub-comments on this thread though have been quite interesting and good reading/learning, yet again.

Thanks.

- Calix

It would be entirely possible to create an alternate in-game currency using scripted items. Of course, it would have to be highly secured but that should be possible.

However, whoever did it would not want any more legal responsibility than LL have now, and probably would also be able to back the currency themselves, so the same problem could easily arise.

Why wouldn't people buy land or premium if the currency was real money?

I can see plenty of problems with the currency being real money, but it not being worth buying land/premium isn't one of them.

I wasn't suggesting USD standard for all of SL, just a few uber-capitalistic SIMs. Kinda like a bunch of capitalists abandoning cash for the gold standard and less government intrusion. Only in this case, USD represents gold. Galt's Gulch if you will. I know, I know, I'm too damn idealistic for my own good.

What is the difference between using L$ or US$ when you're from Europe, or Australia or any of the other countries that exist in the world? Yes, there ARE other countries you know...

It may be great for North Americans to have everything in SL priced in US$, thus fixing the value, but global exchange rates still mean the inworld values go up and down for everyone else who doesn't use US$ as their native currency.


L$ are a great equaliser. The L$ prices of most things in SL haven't significantly changed in nearly 3 years that I've been here. Devaluation relative to US$ and inflation are two seperate things. A lot has been posted about the falling L$ exchange rate and how it is causing in-world inflation, but there is no evidence at all that sugest prices have gone up in the slightest.

Again, I only suggested a few private SIMS, NOT all of SL. I'm not asking for the death of the $L, just the possibility of an alternative. I suggested USD because that is the currency that I use. It obviously wouldn't work for ALL of SL.

I agree I haven't seen much in the way of inflation on SL... and even feel such is unlikely considering the difficulty in changing prices on vending items (if a merchant has any kind of business at all, changing vendors is a massive undertaking).

But as for out-of-US clients, I don't really see a problem. It first of all has to be realized that (according to scuttlebut) 80% of SL users are in the U.S. It's a U.S. based company. That's something foreign nations have to deal with every day. If they buy something from the US and wish to pay by check, they usually have to do so via a check drawn on a US bank and in US currency. Fact of life.

In addition, to my knowledge the primary world economy is controlled by 3 factors: US$, Japanese Yen, and the Euro. Before the Euro, there were only two primary influencial currencies. It has even been said that as the US and Japanese stockmarket goes... so goes the world economy. So the world economy tends to fluxuate according to the fluxuation of the US$ and Yen.

But as stated, point is moot, since a valid way to transfer tiny amounts of US$ doesn't yet exist. It's bound to come sooner or later (after all, just how much does it really cost to register a transaction across the internet? The credit card/debit card "charge for transactions" days are numbered)... but for now, there's just no way to do so.

...simple: SL is a land (or sim-resource) based economy, so as long as tier to linden labs is payable strictly in US$, SL's economy remains tied to the US dollar by definition...

...as to transaction scales, i can't imagine any real problems after translating SL's currency by a third of an order of magnitude...if linden labs truly wants to SL burgeon as a platform rather than as a game, they have a tremendously ripe opportunity before them to incubate the 'net's first viable populist micropayment system...