What are Ginko Bonds worth?

This comes full circle to the core of the issue relating to financial services within Second Life

In first life the analogy above is a reasonably accurate description of how markets work. Individual governments have limited tools to control and regulate markets, BUT they do have two collective tools that normally function fairly well, that is a discount or minimum lending rate for credit, and a regulatory framework.

Within Second Life Linden Labs can only undertake those functions and to date they have refused to do so, unless it directly effects their own commercial interests.

Thus in theory a new enterprise could apply for a listing on Second Life’s virtual stock exchange via an IPO, and regardless of what is contained within the prospectus, refuse to honour it post initial listing. This has happened, avatars have run off with the IPO monies raised from prospective investors, and there is no recourse that I have seen to date.

Also various Uncle Tom Cobbles and all can start a virtual bank, offer sky-high rates of interest on deposited Linden dollars, and when the new deposits dry up, can default on the deposited capital, again with no effective recourse.

In first life these actions can lead to consequences, aka Lord Black (still pending on appeal) Enron, WorldCom, and the like.

But in Second Life to date (and to my own knowledge) there is very little if zero recourse.

How then can any financial market work, except to potentially enrich the few at the expense of the many?

Personally I have no material investment in any virtual financial market and neither have I lost any money (except some personal time spent thinking and researching it, when I could have been doing other more profitable things)

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As a footnote to the above post there is one partial exception, and that is the Dreamland Continents run by Anshe Chung (and Master Quantro). There, they do appear to have some rules of conduct, which could include confiscation of land and property in a default

something I thought about was the big scam that happened in Eve online and that the developers of the game declared totally legit (some guy abused of the trust of several large corps by making them deposit credits on his account similar as you would do with a bank and in the end he ran with all the deposits).

Now what would happen (it'z just an hypothesis) if LL declared that frauds in SL are part of the game, (and thus totally legit) ?

... It was after I played EVE, but scamming people definitely was considered part of the game. ...

In first life these actions can lead to consequences, aka Lord Black (still pending on appeal) Enron, WorldCom, and the like.

But in Second Life to date (and to my own knowledge) there is very little if zero recourse.

How then can any financial market work, except to potentially enrich the few at the expense of the many?

LL/Philip has basically stated that he prefers that the economy be structured so that people live and die on their reputation.

... and thus, identify verification is born! Time to round up the posse and look for Mr. Ginko?

That is another difficult issue.

My own research within SL over a period of around 2 years tells me most people are not comfortable with full open and unfettered disclosure of their RL ID. In fact many people prefer their RL ID to remain private even to their SL friends. One poster summed things up very well when she stated her RL ID and her SL ID were entirely separate and the twain would never meet.

To a certain extent I would go along with that, for example another regular poster here told me that the core issue could be summed up as the Pizza issue. Have an argument with an online person Monday and then have numerous Pizzas delivered (unasked for) for the rest of the week/month/year, I am sure we all get the idea.

But Facebook, various countless blogs and other social networking sites do seem to work, perhaps that is a different structure/environment.

Facebook/myspace is a different entity in that people willingly divulge way too much information there. It's scary how many people, especially teens, put out info about where they live, their families, their friends, and with pictures.

But in terms of finances in SL - there must be some measure of accountability if you are going to invest other people's money. For me, yes, SL is SL and what goes on here stays here - but not when you are talking about managing a fund. I understand Nicholas wanting to maintain his personal privacy but it's gone beyond that now - it's just part of the price you pay for being a fund manager. People want to know what is being done with their money, and that the institution is trustworthy. It just comes with the territory.

Are the funds really important enough to be a reason to include all this Identity posting garbage.

All the Ponzis, and other quasi legal investment shenangians in SL arent really worth saving, in my opinion.

I don't think Nicholas intended for it to be a ponzi, but to function as an investment fund with heavy returns from gambling, both rl and sl. Now that both have taken a hit, there is no way he can pull the money out without losing his shirt.

I don't think they are worth saving, but the reason Ginko is in the trouble it is is because Nicholas wouldn't reveal the destinations for the cash, as they would compromise his rl identity. Supposedly.

Yet he also gave out his RL name and city eventually, Supposedly.

Didnt bother telling investors where the money went still.

When I left Ginko, that was the reason he cited for not doing it. But I imagine it was the WSE forcing him to pony up the "real name." Now, he withholds because "the investments are still subject to attack."

WTFE.

The bonds are still toilet paper and I'll be surprised to see if he even makes the dividend payment.

W
The bonds are still toilet paper and I'll be surprised to see if he even makes the dividend payment.

Now what would happen (it'z just an hypothesis) if LL declared that frauds in SL are part of the game, (and thus totally legit) ?

Well, maybe I'm missing something. But I thought that's essentially what the blog announcement said.

When I first heard about SL, the idea of Lindens being convertible to real money, sounded exciting. In the back of my mind, however I knew that it was ultimately illegal. Now I wonder how I managed to repress this obvious reality?

Recently, Linden carelessly induced a run on the bank. Not covering the loss of Lindens is irresponsible and sets a horrible example. Are they cultivating money scams for their own profit?

IP theft would probably decrease tremendously, were the rabid real world profit motive removed and whatever is created would be as it should be an act of love, art and invention.

Under what law is the exchange of L$ for US$ illegal? That's a rhetorical question. There is no such law. Alternative currencies are quite legal (under US law, which applies to the US-based Second Life & Linden Lab).

LL did not "induce a run on the bank".

1) The "inducement" you are problably refering to was LL's ban on gambling. That ban was required by US law. .

2) The "run" was people realizing that they had been scammed and trying to get some money out.

3) The "bank" was not a bank; it was a ponzi scheme, and would have eventually crashed no matter what Linden Lab did or did not do.

Why would you expect LL to make good on Ginko's fraud? Would you expect a RL government to reimburse the victims of a similar scam (they don't)? As for a horrible example--bailing out Ginko's depositors would have only encouraged more ponzi schemes in SL. As people would be incentivised to put money into other "High Yield Investments" like Ginko, secure in the knowledge that LL would cover their investments. By NOT bailing out Ginko, LL is sending the message that you invest in similar scams at your own risk. Had they bailed out Ginko, they would indeed be "cultivating" more scams.
How does LL make profit off of Ginko (or any other ponzi scheme)? I can't see any way.

Your "love, art, and invention" would put thousands of people who make some or all of their living off of Second Life out of business.

Of course they don't matter, do they? They are not creating for the "right" reasons.

My opinion is that the ginko bonds are worthless.

I may change my mind if they should for some unbelievable reason, pay out the interest due...

My opinion is that the ginko bonds are worthless.

I may change my mind if they should for some unbelievable reason, pay out the interest due...

These bonds are worth what people will pay for them. Currently that is L$0.17 per bond on WSE wselive.com Ginko has contracted to pay L$0.03 per bond each quarter, next payment due by 1 November 2007, not ten years from now.