Devaluating the L$?

Hi all.

I'd like to hear your opinion on the economy in SL. My idea of getting things on the roll in SL is, that the L$ should be devaluated, so instead of getting 1000L you should only get 10, and let the 2 zeroes dissapear.
At the time, it's pretty hopeless to get a business going in SL. I'm not in here for the money, but the guys, that own Denmark, Denmark Copenhagen, Denmark Int, Denmark Hylleholm and Denmark Egeholm, it's pretty crusial to have some money flow, as they pay allmost 300.000 L$ every month in tier, 2 of the sims are Open Space.
My idea is, that beside a devaluation, sl residense should be premium member to be here. The advantage of all being premium is, that money will be on the game, people will have to spend them on something, and most but not at all least, we can get rid of all those BEEEEEEEB bots and alts that are generating emty trafic.
As it is now, LL are pumping out more and more land, even though they will stop for a fulll 2 weeks, they've done all thety can, to get rid of those anoying people who wants to have their own private sim, by dropping their value by 40% and still they charge 50% more in tier than on their beloved mainland, and NO the service from their side are even worse than from mainland owners. This results in, that simowners get desperate and dump the prices, just to minimize the loss, and when that's happining, there's no turning back. When we in Denmark announce land for rent/sale people think we're the laughing stack, just because we keep the prices just a bit over the tier price, but we do have some of the fines surroundings to offer people. The dumping of prices has reached a level with point of no return IMHO. It has to be torn apart and rebuild again, like they've tried many times before e.c. when they prohibited gambling, when they BEEEB all who are living outside USA with the VAT, which made it 25% more expensive here in Denmark for people who does not have it running it in a compagny.
It looks like LL is just pumping the land and trafic up for a quick sale.... The way they treat us users of SL, I really hope it get sold to people who care about the ones, thay live of, not as it is now...
Have a gr8 weekend all.... Now I got rid of some of the anger towards the life in SL
Regards Dino

thats inflation, devaluation would be adding two zeros, surely?

re premium members, I am not one but I create content and sell it, none of my income leaves SL, well it's not a great deal anyway, but I spend that money in SL buy other peoples goods, tip etc. In my experience a lot of content creators are not premium, so imo if you remove everyone who is not premium you will destroy the economy in one single blow.

That would mean the new minimum price at which to sell something is L$100 or more, in today's terms. That would instantly put out of business everyone who sells low-priced items like t-shirts or novelties for instance. No-one wants to pay that much real-life money for a virtual item that's just for a bit of fun.

It would put an end to tipping of hard-working staff, because most people would not want to tip that much. So bye-bye clubs, live music, DJs, who no longer have an income.

It would put an end to the money-trees for newbies, and to dollarbie items to help them along.

A L$1 demo hair or skin will now cost the equivalent of L$100. That's a big financial commitment just to try something on.

The only positive thing I can think of is that it will also put an end to camping.

My opinion is inflating or deflating the L$ wont help and will just cause problems.
Remember LL and merchants are still going to want to get paid the same amount of US $, so everyone will adjust their prices accordingly and you have achieved nothing from the change but extra work and confusion.

Regarding the idea of only premiums, I think it would be better to make premiums more attractive. (free accounts are a good "hook" to get people to try it and hopefully end up spending money on SL)

To make premiums more attractive I would increase the stippend slightly so the yearly stippend is exactly half way between the L$ buy and sell amounts for the US $ amount of the yearly subscription fee (excluding vat)
This way you are better off having a subscription than buying on the lindex, but still dont earn enough to make a profit from selling them

The advantage of LL selling money via premium accounts is like gym subscriptions it gets people to spend more than they would normally.

It's ment to be a new beginning, because SL's running out of hand of LL. They do not know, what they're doing, besides pumping lot of land and trafic by allowing bots and all those alts. I just hope that a larger compagny will buy SL, so they cac handle it. LL surely can't. The tipping will still go on, I don't tip under 100L$ and the demos? 100L$ today,.. it's nothing.... 15 - 20 US cent or what? I'd like to get people to use SL, but also make it worth making new stuff in here. I've made builds that I've spent 100+ hours on, but I donøt even have it for sale, because I can sell it for perhaps 750L$ which is ridiculous.
Get a new start on SL, that's what it's about.

(Just a minor terminology thing: As Dekka pointed out, "devaluing" a currency usually means going in the other direction, decreasing the value of each unit of that currency.)

It's rare that any explicit re-valuation of currency has any effect at all on the economy. I understand that in this case it's proposed as a way to make very apparent that everything else is changing, too, so maybe it would send that signal. I just don't see that there's a lot of room for changing "everything else" to make everybody happy.

I don't think forcing payment to LL by all residents--everybody having to be "Premium" members--would help the in-world economy. Rather, I'd expect it to *dramatically* reduce the number of residents, such that almost none of the existing in-world businesses would be able to survive. (A "pay for play" policy may have worked when SL was growing fast--I rather doubt it would have much slowed real growth in retained residents--but that ship has sailed a long time ago.)

If some other company purchases SL, I hardly think they'll be able to do away with VAT. On the other hand, other grids will eventually interconnect with SL, and I'm sure some will take anybody's money without worrying about foreign tax authorities (nor domestic, probably--at least until those authorities knock on the door ).

LL's management of land availability and fees is too abrupt to inspire confidence. Unfortunately, I really don't think they yet have enough data and knowledge to be able to work the controls with finer-grained adjustments.

Right now, it seems to me that with landmass having expanded dramatically faster than in-world resident hours, land prices should rise only if Mainland doesn't grow (and it's frozen for now) and some private estate owners go out of business and abandon their land. Or we wait for resident numbers to gradually increase enough to actually create a sustainable demand for all this land.

That may *seem* right, but somehow land values are increasing again--slowly, but out of all proportion to the growth in resident hours. So apparently existing residents are just deciding they need larger amounts of land than before. I suppose the cheap land prices encourages that (at least until tier/fees come due), so the current cost structure has defined a new dynamic equilibrium curve. Landowners who can't operate on this curve will just have to sell off to those who can... and if they bought when land was much more expensive, that may be no fault of their own.

Hi

Like now 1 us$ = 265L$ I think it will be better if 1 us$ = 10L$

Becorse like now manny think that 1000L is so expensive, but its only like around 4 us$
Builders here in Sl spent many houts on making things and its just fair we have to pay them for the work.
A house/shops/boat there taking, if the builder real take care about it, 5-10 hours to make
And they can even not sell it for 500L becorse its to expensive !!

And renting shops out here in SL is dificult becorse the shop renter is dumping prices, so ofcorse the renter want to pay a cheap rent.
But the fact is that the fee to a sim on mainland is 50000L month on private sims its like 800000L month and that is 295us$.
So as I see it becorse of the psychical efect that poeple in SL think 100L is so so so big money it will be godd whit a devaluating of the L$

Something seriously wrong with these numbers. Adding a "0" to the Mainland number helps some, but the ratio is 2:3 (assuming full-sim Mainland tier level... otherwise of course the ratio can go very far the other way for lower levels of Mainland tier).

Sorry its 80000 and not 800000 to fee for a privat sim month.

But still if the shopower not can sell items becorse poeple think the are psycical to expensive, they dont have money to rent the shop for.

But still LL is going to take the land fee from the land owers acount.
Is it like this in SL that the the landowners need to money surport the shop rentes, for they can have a shop.

Its like the same in clubs in SL and campers the mentality is like this for the most poeple ( the one there dont have membership ) thay want all to have it as cheap as posibel becorse they think wow 1000L is 1000us
If Sl is not going to go down we need more money flow and to drop the mentality that "I just go to at club if I get money for it"

Its like buying frinds in RL and thats a bad thing, I think.

Close enough.

Well, revaluation by a factor of ten would be less disruptive than the OP's proposal to revalue a hundredfold. So uploading a texture would be NewL$1. Demo things would have to be free instead of OldL$1, so some vendors would have to handle their own recordkeeping of who took demos--assuming the sellers were charging OldL$1 just to get it into transaction history.

Still, I just don't think changing the units is really going to have much of a psychological impact on in-world spending. Rather, the supply and demand situation is what it is, at any denomination. There are just way more clubs than there need to be, and way fewer residents wanting to spend RL money in-world--probably because so many have fallen for the get-rich-quick-in-SL fantasy.

Anybody complaining that they're not able to make enough L$s in-world is somebody who's not eager to put in more RL money than they're taking out. We just got too many of those. If some get discouraged and leave, it's a win.

The day a dollar only buys 10 Lindens is a day I will have been long gone from Second Life.

That's absurd.

Another thing to think about here, if the exchange rate of Linden Dollars drops down to only $1 for L$10.

The reverse is true of the exchange rate. So that would mean that L$10 buys $1. Which would mean we would see a massive cashing out of many people's accounts and a rapid decrease in LL's profit margins. Which in turn means less overall money for LL to use to support the grid and thier employees who maintain the grid.

All in all, a Bad Idea (tm).

Same here.

No Arcsylver, becorse Linden have to devaluete all acouts here to.

In that way there are not going to be more or less money in SL after the devaluating.

Why not just let the free market handle these things? Government interference always....ALWAYS.... causes more harm than good in the long run.

Everyone who buys L$ knows what their RL value is, it's the people who never buy L$ who are generally clueless about how much real money any given amount of L$ is. Since they're the target audience changing the exchange rate won't accomplish anything: they're not buying L$ now, they won't buy L$ after the change either.

As far as "expensive" and "cheap" for people who do know what L$ are worth goes it's competition that instills that value. L$300-400 will generally buy you an outfit from most of the high-end creators in SL, anything above that is "expensive" and RL value has little to nothing to do with it, it's competition between sellers that establishes an expectation that "thing A" should cost between "X and Y L$".

One US dollar equating out to a mere ten Linden dollars?

Forget it.

I'm on SSI and often have very little left over each month as pure spending money. On occasion I do like to dump in some of that to allow me to purchase tings in Second Life.

At that ratio, one of my most expensive purchases - a dragon avatar costing 3.2k - would have cost me 320 US dollars .... Not only is that absurd, but it is little more than a way to increase the profit margin of others while at the same time putting quite the strain on a person's ban account.

Even if current prices were adjusted to compensate, there would still be those that refuse to follow suit.

The current ration of four US dollars being about equal to one thousand Linden dollars is perfectly fine ... This IS a fantasy world after all.

I don't think people realize how much money non-premium accounts put into the economy....

Sure, take away basic accounts, if you want to kill SL's economy.

Well, not exactly. If you got fewer linens for the dollar because the linden was worth more, you should be paying fewer lindens for that dragoon avatar. The avatar has the same value in rl money terms, so it would have the same value in linden terms - but with the linden being 10 to the dollar, you'd shell out far fewer lindens for the same item.

Still, I'm a free market kind of guy. I believe the market should determine the value of the linden, and steps to purposefully inflate or deflate it should be prevented.

Basic here, and I spend between 15-30,000 Lindens in world a month. If they don't want it, let me know. I can spend that money doing somrthing else for entertainment.

Economics - You're Doing it Wrong.

Most SL businesses derive benefit from the fact that it is difficult for the SL consumer to translate Linden Dollars to real currency. Consumers making small purchases lose track of how much money they are actually spending, and spend more than the would if they could easily make the calculations in their heads. On small purchases, consumers probably don't need to pause to buy new Linden Dollars, and thus no mechanism stops them to force them to make the calculation.

Even for large purchases (such as buying land), L$ 70,000 seems pyschologically more acceptable than $ 264.15 U.S. But I assume that, probably, most consumers doing big purchases probably do stop to do the math. And most likely, with big purchases, most consumers have to make a Linden Dollar purchase to make the big purchase, something which pauses them and forces the money calculation.

You want to mess with the economy because some people do not have a clue? Have you been hanging around with our US politicians?

One could add a couple of additional denominations. Ten lindens could be, umm, a dekka, and a hundred lindens could be, oh, say, a hundy. Express prices in the bigger units to have fewer zeros and thus not look so big.