What if... (L$ thread)

... LL decides that from now on L$ has no longer any value outside SL? What wold it be your reaction? What do you think that happen to in-world society?

Oh this old chestnut.

I'd immediately shut down all operations and quit SL forever.

I hate to break it to you, but outside of SL, there IS no value to the L$. Try buying your morning paper with it.

Sure it has: you can change L$ by USD...

Yes, but you can only USE it in SL. People pay with USD for its use. It is not a currency accepted anywhere else except in SL.

Wouldn't make a difference to me. A lot of big business people would probably leave, so that would have an impact, at least temporarily.

Strictly speaking, not quite. There is, for example, a successful Japanese shop selling MP3 downloads (and apparently, actual CDs as well, though my Japanese reading skills are non-existent so I cannot vouch for that) of music groups formed in SL and chiefly performing in SL through avatars. They take L$ payments, but the use of the goods is not quite virtual any more.

It's not like people actually accept USD cash everywhere, you know - that would be illegal around my part of the world, even. L$ is little different in practice from an actual foreign currency of an unpopular country, that is illegal to export as cash, while the bank accounts inside it can be controlled from outside by the owners. I suspect that if you look around, you'll find a few natural national currencies that behave similarly.

Now, if the government of that country says that it is illegal to use this currency outside the country and anyone who is known to do that will have their accounts seized, THEN lots of people will be in, ahem, dire straits without a paddle...

I would CHEER!

I think our InWorld society would become a little bit smaller as the people in it just for the money quit!

But the truth is that Linden would just be sold on Ebay, or 3rd party site would pop up and sell L$.

This....

Ah, but the payment is still performed within SL, I presume. (Yes, I know I am nitpicking here btw. )

In the same way that I can't pay for my newspaper or coffee in the USA with Euros, but have to go a bank to get them exchanged, I need to go to the Lindex in order to exchange money. While there is a way to do that I think it's reasonable to call it "real".

If the exchange (and the others) were removed, I think that a lot of the high-end vendors would leave SL for good. Rental property would disappear (because most landlords are doing it to make a little money, I'm sure). We would probably see a lot of the "How do I make money" threads disappear (those that come into SL thinking they can make their fortunes from this "cutting edge" technology).

I think that this is one of the reasons for the diversity of stuff available in SL - without it you would have people who build for their own pleasure and give their stuff away. Not saying that those people don't have a valuable place in-world, of course.

I also think it's one of the prerequisites for getting a rival Virtual world popular - you have to have a way for people that design stuff to make something for their trouble - something tangible.

I'm not sure I understand the premise - are you asking what would happen if you could no longer cash out L for $US (or other real-world currency)?

How would people obtain L in that scenario - you could buy them but not sell them? Who would people buy them from then - LL only?

Just trying to understand the postulate.

Anyhow, regardless of the details, if what you mean is what would happen if you could no longer cash out, anyone who cashes out L for RL income now - or even just to offset their tier - is very likely to shut down their operations. This could be a huge fraction of SL commerce out the window. Even those who don't cash out for tier now but hope to make enough some day to be able to do so would be strongly discouraged; many of them would likely shut down as well.

SL would lose a significant fraction of its content providers and landowners, I fear.

i don't think you are nit picking really..i mean the linden has no value unless you are related to the program in some way..
if someone takes a payment in lindens..to get a real world value they would have to exchange them for their currency..it only has value to people that use SL..
at least until some other places decide to recognize it..

Then Anshe Chung and others who run their own L$ exchanges will make out like bandits.

eh either way I am staying. There gona have to turn the lights off before the get rid of me lol

^ this ^

Without a way to make a profit, businesses will leave, and take their tier payments with them. That will turn off the lights really fast.

I believe that he PMLF in the Economic Statistics is not "cashing out". THe numbers do not take tier fees into account.
http://secondlife.com/statistics/economy-data.php


May 2009
Total Unique Users with PMLF 69401
$10 USD 39400
$10 to $50 USD 18632
$50 to $100 USD 3809
$100 to $200 USD 2671
$200 to $500 USD 2433
$500 to $1,000 USD 1131
$1,000 to $2,000 USD 665
$2,000 to $5,000 USD 439
$5,000 USD 221

What if people could not cash out but could
- pay with L$ for tier, or
- buy US$ into their account with L$ in order to pay tier

How many individuals actually cash out US$50 or less a month?
What investment in up-front cash and ongoing time is required to get that pitiful return?
I pay US$125 a month to LL. I can earn that in a couple of hours in RL.

It appears that there are not many people who might be making more than pocket money out of SL.

Say that there are only 660 people making over US$2000 a month - and that's *before* they pay tier!
Take away US$ 295/month on a single successful sim, or US$2950 on 10 sims....

The biggest short term effect of "no cash out" would be the large estates going 'poof'. No ACS, no Caledon - unless they were labours of love run just to cover costs.

They would be replaced in time by a greater number of smaller operators.
Mainland would not be so deserted. Mainland would be less yellow than it is today.

Private estates would be smaller and more prone to Wild West management.

And then where would be buy our clothes and hair and shoes?

Yeah...but consider all of those who participate and get hooked into spending time and purchasing products, services, and land.... by the lure of the "possibility."

Would love to know the statistics on that. 50 percent maybe? at least?

Good thing what we already have won't wear out.

QFT!

I would enjoy exploring the innovation smaller shops and those who love to create for the sake of creating. (And maybe not get a zillion notices a day.)

If I could no longer cash out the L$ that I earn in-world for real money, then I would have to quit. I would not be able to justify the hours spent in SL or the land that I pay rent on each month if I had to pay for my monthly land costs out of pocket with real cash, instead of with what I cash out.

If I didn't have my land, I wouldn't have much reason to bother staying in SL at all.

I could, I suppose, start taking all payments for sim development work in US Dollars, payable via credit card or PayPal outside of SL. But there would be virtually no reason for me to maintain any in-world stores.

It would, quite likely, crash the in-world economy completely. Say just for a moment that all the stores and businesses in SL try to remain active at their current levels. How long before most of the more successful merchants are burried in more L$ than they can possiblty spend? How long before some of the less-successful merchants go bankrupt because they can no longer use their L$ to even pay the rent on their stores or mall space?

Sim owners? Landlords? Would a mall owner accept L$ for rent in-world, if he couldn't use it to pay for his land tier? Would a sim owner accept L$ for land purchases or monthly maintenance fees, if they couldn't use that money to pay their sim maintenance fees each month? Most privately-owned sims are precarious enough as it is. The huge landlords may have enough of a cushion to be able to convert to a strictly external payment system, but what percentage of their tenants could pay in real money every month, with no in-world income stream to pay for it?

let alone you know there would be a pretty high monthly fee to be here.LL couldn't do it for free..
they would have to limit to only paying members..we would probably have to pay for every thing we did like tp and who knows what uploads would cost..
but then again they would just shut down or sell off i would think..

Ah but.... the OP's question "... LL decides that from now on L$ has no longer any value outside SL?"

Could allow for:

What if people could not cash out but could
- pay with L$ for tier, or
- buy US$ into their account with L$ in order to pay tier


In that case, the only immediate inescapable impact would be on those who actually manage to make a nett RL profit out of SL.



If tier could not be paid out of L$ incomes, SL as we know it would definitely crash.
I'm paying at 1/2 sim tier level - and renting a little tier to take me slightly over the 1/2 sim. I don't think I'd go beyond that without a L$ revenue stream that could make up any significant additional tier.