the SL Economy

The problem is once you trade $L for USD you are not required to buy SL goodies. Some do buy SL thingies, but most pay their ISP fees, or buy groceries, or pay their electric bill, etc...

By virtue of the fact that you are receiving USD in trade for L$, it has value. Hence the US government considers this income.

And if ya did it with Chuckie Cheese tokens and Mr. Cheese facilitated the trading of the tokens through an exchange called the CheesedeX which he owned, it would be no different.

I thought that the IRS (this could be completely wrong) noted that we had to pay taxes on money taken out of SL? This could just be some rumor I heard a while back, I'm not sure. Anyway, if we have to pay taxes on it, I'd say they are noting that we are making REAL money at it. Anyway, does anyone in this thread know if that is true?

What? You obviously havent spent enough time in Chuckie Cheese. Theres an entire Ticket - cheapo prize economy in there.

The only difference between CC tokens and Linden$ is Chuckie cheese doesnt run an Exchange helping parents sell unused tokens to other parents.

Probably becuase theres almost NEVER unused tokens. Demand for games in Chuckie Cheese is way higher than demand for the Money sinks in Second Life.

Its not Chuckie's fault hes more popular than LL. Its just how it is.

It is each individual's responsibility to pay taxes on their income whether it's RL or SL, if you earn USD you are supposed to claim it and pay taxes if any are due.

No Colette..there isn't an exchange for USD...there is an exchange for PRIZES. Way different. And the difference between having an exchange system for selling to other parents is exactly what makes them different.

Colette has a very good point, though ... the ONLY people who would buy Linden dollars for real dollars are people who want to buy things on SL with them.

In essence, Linden dollars are llike anything else you sell. You could sell your collection of Beanie Babies to another Beanie Babies collector for USD. That does not mean Beanie Babies are currency, it means they can be sold. Linden dollars likewise can be sold.

Chuckie Cheese tokens, the same. The only potential buyers of them are Chuckie Cheese customers. They have no *intrinsic* value. They just have the potential to be sold to someone who is part of the niche market.

(It's not a question, by the way, of what the *sellers* do with the money they make from the sale; it's a question of what the item sold can be used for. Linden dollars have absolutely no value to anyone who is not in Second Life.)

And it's because of this point that I don't see that LindeX changes anything. Currency exchanges in the real word facilitate the trading of one country's legal tender for another's. Linden dollars are not legal tender anywhere in the real world. They are only useful for buying and selling inside Second Life.

Some people really really really "want" to be right because that would safeguard "thier" SL. The problem here is wanting to be right and actually being right are two different things.

The only way gambling is not leagal in SL is if something of value is wagered.

It follows then that if wagering L$ is not legal then L$ are something of value.

Gisela is only indicating how it came about that our monopoly money, our funny money, BECAME real, there is only one reason for this and it is the LindenX.

There is only one culprit in this and that is Linden Labs.

LL made money real.

In fact they originally promised to stay out of the funny money business and let this be "our world our imagination". They would provide the foundation (land) and we would do the rest. But they re-negged on us and thier promises.

In fact other people built up businesses which supported thier livelyhood based on SL's promise to keep thier fingers out of it. The Gaming Open Market most notably.

If you have been around long enough to understand what the term "to be GOMed" is you will understand this.

Linden Labs with total dis-regard to thier original promises crushed the Gaming Open Market and very few stood up and complained about this.

This problem started a LONG time ago. I was blind myself, because back then I "wanted" to be right because I loved SL as well.

Now LL is paying the piper. They got greedy and they faild the whole communitly by losing sight of thier own vision.

It is no longer "our world our imagination".

Linden Labes made it real.

Everyone will be just as guilty as I am unless they can see this. I wasn't in the exchange business so the GOM being GOMed didn't affect me (I didn't think at the time).

Anyone not in the virtual casion bussiness with FAKE money which has no intrinsic value can care less right now as well. So they are not standing up.

When sex is gone only the people in the sex industry will call faul, although I will stand up with them and support them because now I know what you can only know once you fall victim.

When it finally comes around to being your turnd to be GOMed you will know. So keep on "wanting" to be right and feeling safe and secure in your SL where nothing that is happening today is affecting your hair, skin, rental, weapons ... what ever industry you are in.

We'll just sit back and watch you cry as each falls like a domino because no one would stand up for anyone but themselves.

LL is responsible for this and they will get away with it because all are blind because

I am not in the trading bussiness

I am not in the wetIcon tp bussiness

I am not in the virtual casino bussiness

I am not in the sex bussiness

I am not in the rental bussiness

When it's your turn there will be no one left to cry faul.

so ride it out and let them come for you.

Linden Labs made money real, Linden Labs made SL real.

Thier world, thier imagination.

be careful who you hold hands with, this is probubally against the law SOMEWHERE.

game over.

My understanding is that money taken out of SL can be considered ordinary income. Although there is a clause in IRS code that you can make up to 400 dollars annually in a "hobby" without having to declare it as income. So if you take out less than that a year, you should be fine.

I plan to declare my withdrawals from SL as ordinary income just to be on the safe side.

Any talk of this "get rid of the LindeX," can be totally annihilated by this short announcement;

LL makes lots of money from running the LindeX.

End of Thread.

Next.

You have a lot of good points, and indeed your argument alarmed me at first. But then Colette's posts reminded me of some other points that change the entire situation. For example, in response to the specific statement quoted above, note that just because something has value does not make it currency. I could go on ebay right now and sell my computer, so clearly it has real USD value. However, that fact doesn't mean computers are now currency. I don't know what exactly the dividing line is, what exactly is the complete definition of "currency," but obviously "having real USD value" is not sufficient.


What he said.

This is so not true. People are making real life incomes here whether you want to believe it or not. They are paying their bills and taking vacations and more on the money they make in SL.

Read the forums. Do your research. It's all there.

Becuase people want Lindens to Buy Stuff in Second Life, therefore you can sell the Lindens you earn in Second Life to those people.

It has nothing to do with the Linden$ having a value seperate from Second Life, becuase it doesnt.

If no one wanted to buy Linden$ for Second Life Virtual Stuff - the L$ would be WORTHLESS.

I would also like to note that once they crush you for thier own survival they will compensate you in NO WAY WHAT SO EVER.

They will sell you land, and lots of land, with the promise you can do so-and-so on that land then in the blink of an eye they will say EFFECTIVE IMMEDIATELY you can no longer do so-and-so!

And GUESS WHAT you are stuck with the land and you owe us rent!

We certainly hope you figure out what to do with it! We're not buying it back! It's worth 1/2 it's value used! We certainly hope you have lots of free time to figure this one out!

Even though when we sold it to you we stated you could do so-and-so with it we don't care we tricked the hell out of you because we have a motto and it is

*BE EVIL*

Just wait till they say you can't rent out parcels effective immediately, apparently they can do that they can do anything they want and if doing that kept them out of hot water they would do it in the blink of an eye because it's thier world and thier imagination. You're just along for the ride AND you're paying for that ride.

They do not care about the community they only care about themselves and they will give you the shaft without losing a wink of sleep over it.

Explain to me Collette then why are virtual casinos outlawed in SL if the L$ does not have any value.

Please explain that one?

Because it does and the reason is because of Linden Labs' actions, not ours!

Answers my question perfectly, thanks.

If no one wanted to buy stuff with USD...then USD would be WORTHLESS. Ok, so maybe that's not totally true. I don't know.

Becuase ...

You could buy Lindens$

Then you could gamble

Either you won or the house did

and they could sell Linden$ (becuase people want them for Virtual stuff)

And get USD back.

Thus is was Online Gambling - which has restrictions placed on it by US law. Specifically against the Credit Card Companies.

If you had Online gambling for Virtual Jellybeans - and there was enough demand for Virtual Jellybeans that you could sell them for USD - you would face the same problem.

But that's ok Colette, I understand your position completely. None of this is affecting you. So you can really care less. Posting to these forums gives you what? A sense of security? Maybe it is just your way of having some entertainment? I'm not sure. Maybe by you saying what you want to be true it makes it more true in your mind?

Maybe what ever you do in SL none of LL's policies will ever affect you direclty. Maybe this is the case, then I'm happy for you and your SL.

As long as your SL is not disturbed all is well (for you) and I am so sorry for these annoying forums posts that seem to threaten your idea of what your SL is.

I mean really as long as none of this affects YOU then everything is ok.

Because really when it comes down to it Colette the only things that matter are those things that affect Colette. No one else really matters EVERYONE else doesn't really matter. All that matters is Colette and Colette's SL. Everyone else ... you are on your own, in fact I will giggle when you are screwed.

Well Colette, you let me know when this directly affects you and I will stand right up next to you.

Until then just worry about yourself. No one else really matters.

The LL gods are being good to you right now so all is fine.

No. This isnt true.

Becuase the USD is backed by the government of the United States.

It is legal tender for all debts, public and private within the borders of the United States.


If no one wanted to buy anything in the United States or From the United States - and the Government could no longer meet its obligations -

THEN - the USD would be worthless.

The fact that you sell your computer does not make it currency, rather the USD that you receive for it simply gives the computer value. Just the same as if you sold $L - it would not be a currency either - you didn't create it, its a token. And if you sold it, the USD that you received for it simply gives it value. In either case the USD is considered income and you are individually responsible for claiming and paying any taxes due.

Your doing this as an individual is completely different than a corporation and has nothing at all to do with creating a currency. The laws are quite clear that you cannot create your own currency. And in LL's case, they have created Lindens, but they state very specifically (for legal reasons) that L$ has no USD value.

$L has no value and is not a currency as long as LL (the owners) do not facilitate the trading of it for USD.


Because of the LindeX however, it is quite possible the whole concept of LL issuing $L is completely illegal itself. Under US Federal Securities laws, it could be construed as issuing an unregistered security. Because the $L is traded for USD on the LindeX, are they in fact issuing securities for USD? If so, that IS DEFINITELY illegal under federal securities law - virtual or not. Technically securities, for all intents and purposes, are virtual anyway because you just don't see actual stock certificates anymore. $L is no different because if you buy $L basically you are hoping someone will pay more for it, or that you can exchange it for something with value, so it appears they are acting like a company issuing stock, i.e. selling virtual securities. ALL BECAUSE THEY OWN THE LINDEX.

LL cannot sell $L and maintain an exchange, virtual or not, in their own corporation, which is exactly why they have made it a point that they are only acting as agent, but in fact they are not (by issuing more $L).

I invite you to read the securities laws themselves here:
http://www.sec.gov.

To make problems worse - LL opens itself up to qui tam actions. A successful action under the qui tam provision would most likely bankrupt the company and close SL.

This would certainly bring on a US DOJ investigation and if it did not bankrupt LL, it would tie up any resources LL might have to defend itself.

Qui tam lawsuits are quite unique. They are basically filed by individuals on behalf of the government. They are also sometimes called "whistleblower" lawsuits.

This type of lawsuit is particularly attractive in our litigious and greedy times because the government is required to do all the work basically and the person filing the suit is entitled to 15-30 percent of the total recovery. Additionally they receive protection from retaliation.

In 2005 alone, a record $3.1 billion was reclaimed from corrupt businesses from qui tam actions. My math sucks, but isn't 15% of 3.1 billion something like 450 million. That's quite an incentive.


"In qui tam provisions the government gives private citizens the right and the financial incentive to retain a private lawyer to file a lawsuit to act in the place of law enforcement."


Lawyers will take these on in a heartbeat without even a consultation fee. It would not surprise me to learn that one has already been filed.


Read more about qui tam here:
http://www.whistleblowerfirm.com/faq.html#1

YOU NEED SOMETHING OF VALUE TO CALL IT GAMBLING COLETTE.

So now we are fully in agreement. Since you agree it is gambling then you agree that the L$ DOES have an intrinsic value, then from that foundation of agreement we can go forward with two things.

1.) How did that happen

2.) What does it mean

When the server effectively goes open source, there will probably be a need for micropayments which are not in L, and a business which can effectively do this for virtual world users could do very well. This is because some grids would choose to be part of SL, and some would not.

But that's way in the future.

However, I felt that GOMing the money exchange was unwise when it happened, and I continue to feel it's unwise now. It removes a point of LL being able to keep a hands-off policy, to behave like a common carrier. When GOM was GOMed, it was the wedge that opened up the crack in the trust between the residents and LL, through which flows the river of carping, anger and dissent we see now. It was the end of Philip's utopia.

Before the Lindex, it was some effort for me to budget my L needs and go to IGE every so often to buy a big chunk, but it worked, and it was pretty fast, enough to permit impulse purchases. I sometimes worried about buying L from what I was concerned might be L farmers, but in retrospect the people cashing out through IGE were probably land dealers and merchants. If someone has real knowledge of this, I'd love to learn more.

LL could still have an effect on the value of L through such means as stipends, payments for services and so forth, and could, if it became thoroughly necessary, become a player on the third party exchanges.

Of course this requires a huge amount of trust all around.

Making it impossible to buy or sell L and imposing on it the status of funny money is not only stupid from the point of view of content providers who have tier to pay and a living to make, it's also stupid from the point of view of residents who are non-gamers. If I had to level grind to have a decent standard of living in SL, I'd be out of here in a heartbeat. I don't play any games that require levelling; I don't have the time. Many residents would simply leave if they found they could no longer buy the things they are used to in SL.

Chilly, for the record, your casino gave me many great times as a new resident. I met many of my good friends there and am sorry it had to go. I didn't really even gamble, it was more social for me. It sucks when major businesses are having to shut down, but what can we do? As far as I'm seeing, there's no way around what LL is saying, even if we try talking to them.

LOL this goes back to why I think the argument is Lame-

You only want Linden Lab to be in trouble over what the L$ is becuase they banned gambling.

*bows in unworthiness*