SL Banks are Toast - Yee Haw!

Its also possible that legally LL doesn't have the authority to actually regulate these banks and still be complying with RL regulations.

If it were found that SL banks were illegal after LL regulation;

It would make them duplicit.

I agree with you and I think Rebecca is hoping for a miracle that will never come. If you want a WoW economy, my suggestion is to move to WoW - LL has no intentions of going that way, from every office hours meeting I've been in - they are absolutely dedicated to having an actual economy inworld. And yes - even WoW has a gold economy - its all black market. I much prefer NOT having a black market currency exchange here, thank you muchly. The fraud would be rivalling the SL banks.

Now, that being said, its entirely possible (though really far fetched, considering their land model) that LL could discontinue the Linden as an exchange - I have heard it hinted at, that SL could start allowing the exchange of real world money at some point in the future.

I could move most of my biz to working in Paypal - I would HAVE to as where I would rent would surely move to US dollar as well! - but I can tell you it will nail the economy pretty hard if we had to go that way entirely. There's just no way to sell your merchandise easily and not everyone can use services like Paypal. Content creators will not be able to pay their sims with their proceeds - and there will be a major exodus of them if they can't.

The economy surely will be a lot less dynamic, and good friends of mine who live entirely on the Linden dollar economy (having no other way to get money inworld to pay tier due to where they live in the world - so they pay in Lindens on private islands with money they make inworld) would also be forced to leave. Fewer renters, definitely a huge hit for LL... don't see it happening. At least, not anytime soon.

If it ever happens, it would happen with a new architecture, when SL morphs into a much larger multigrid system. And it could well be that the Linden never actually disappears - but only remains on the Linden managed main grid, and nowhere else. But the medium of exchange to RL money I dont think will ever go away.

If the Linden disappears or loses its exchange capacity, it would mean disaster for the land business, and I don't see that happening anytime soon, with the amount of business that LL gets from land barons buying sims for renting them out in lindens. In fact, its much more cost effective for LL to sell sims to land barons than it is for them to manage the mainland. The Land Barons do most of the community work for them - and it shows - why have you never seen large organised communities like Caledon on the mainland? Well... because you just can't "get together" and manage land in mainland sims like you can if you order sims and develop them custom for people all of a more similar persuasion. And similarity in key aspects is what provides the backbone for community creation - a similar outlook, a similar way of living.

At any rate - to cap off... it is very interesting that the blog post both bans and allows banking. They have cut off the Linden based banks - while giving a major green light to *real world banks* to come in and fill the gap. So... Real Life money and exchange to Lindens is here to stay, me thinks

Do you do loans?

I wasn't saying or wanting the Linden$ to go away. I think the Linden$ and real money transactions can co-exist just fine.

The problem with the Linden exchange is that it contradicts the "fictional" Linden$ definition. You can't call the L$ "fictional" and at the same time exchange it for real money and not expect the real world to catch on and eventually put an end to it.

By stopping the Linden$ exchange for real money, and instead promoting real money transactions for those in it for the business, LL would be avoiding a jillion regulations in a jillion Real World juristictions.

Above you are saying this would be a "disaster for the land business." I don't see that at all. Already, many Land Sales are already done with real money in the first place and have since I began in SL. The extra step of converting Lindens to dollars is just an extra step anyway.

The WOW example, shows that an economy can thrive without real world exchange. Very few people in WOW are out to cash out using black market exchanges.

We have security laws, banking laws, liability and insurance issues, Legal Tender issues, coinage/currency laws, and a host of other real world realities, rules and regulations, all over the real world, that will be avoided by keeping the Linden$ as a "ficitonal" currency.

Rebecca is really never going to be happy until they get rid of the L$ to USD$ conversion idea.

Which is never going to be a popular message in the forums because half of the regular posters own SL businesses.

I still think they will get rid of the Linden Dollar entirely before they bother turning it into monopoly money.

I don't see why business people, seeking a real world income with SL, don't want real money directly?

It also has nothing to do with me being 'happy" about it. It's not that I am against the Linden exchange because of some principle I believe in. It's because I know it will be brought down by rules and regulations---just like the SL banks etc--only this time it will be SL itself closed down.

And the L$ is already supposed to be "monopoly" money. Had they kept it "fictional" then even other"fictional" things like "fictional" banks, "fictional" stock exchanges, and even gambling. Would all be "fictional and just imagination in a virtual, make believe, world.

The easiest way to invite RL into SL is to cash out Lindens$

Th L$ is not monopoly money.

It is a commodity in Virtual space.

It would become monopoly money under your proposed changes.


It would also become redundant if an integrated USD payment system were added.

The problem is that a business or even an avatar in Second Life has both US$ and L$ costs. When the trading of US$ for L$ was introduced, it was introduced _by residents_ - not by LL! And it was introduced to solve one specific problem: that you needed US$ to pay tier for land, but L$ to buy the land in the first place.

Using US$ would have huge problems for anonymity and microtransactions too.

yes, so you can gamble. I know, I get it. Then black market exchanges will be around to cash in the chips After all that is what the gold industry is all about



There is nothing illegal about the Linden. Or about exchanging it to real money. It's just credits. Lots of companies and stores have redeemable and/or exchangable credits.



No, they would not. In fact, they would kill the content and land industries, as it would lose its microexchange currency.

You forget, that WoW's content is developed by professional designers who were paid up front for their work by Blizzard, and whatever you do with it - the artist no longer cares as they were already paid.

This doesn't happen in SL - as it is a user content industry, not a controlled content industry.

As I said, you like WoW type economies - go there. This isn't one.



Yes it is a disaster for the land business. Because most people have businesses who own land in SL - businesses that would fold or move away from SL if they lose the Linden as a medium of exchange. People would not be able to rent land in Linden in countries where credit cards and Paypal are not prevalent. These people would stop renting land - I personally rent land in Linden to a friend out in Eastern Europe - he can't buy Lindens. No Paypal and no CCs. Other good friends of mine are in similar situations.

LL wants their tier in USD. So we need to convert Linden to USD or the tier doesn't get paid. It's not difficult to figure out. You will have nothing to buy if it goes to RL currency and Lindens are unexchangable, so you might as well get rid of the linden.



WoW does not have a User Content industry. It is a game, where everything is controlled by Blizzard, all art made by Blizzard artists.

Compare apples to oranges much? Other than the fact that both are fruit, they have nothing in common.



blah blah blah

find a gambling casino already

Yes, the banking fees - each transaction has a percentage that Visa, Mastercard, Paypal, etc take out.

Plus minimum purchase requirements.

It will raise prices substantially for content and land across the board. I don't think SL could survive that at all.

but its all moot - because LL has no intention of giving up the Lindex or the Linden for their grid. And considering what is on the table, the Linden will most likely remain ONLY in the LL grid.

Rebecca may find her paradise one day in another SL-type grid hosted in a foreign country, where she can have gambling chips bought and sold in gaming. And LL will not care one whit about it, as all they did was provide the technology, and nothing else.

but as far as LL's grid is concerned, its not going to happen.

Well, I don't think it's such a good idea to say that. LL have to adapt SL to the circumstances that come along. If it _is_ the case that either a) the L$-US$ equivalence cripples small resident entrepreneurialism by applying strict real world business regulations to businesses which only turn over a few US$ a month, or that b) L$ becomes too comparable to US$, and thus consumers back off from purchasing L$, and the entire economic model becomes endangered.

(It's well known that with microtransaction currencies like L$, it helps if people cannot easily work out the US$ value of what they are spending. That's why the L$, and most commercial token system, use odd exchange rates - like L$266/US$1, or Microsoft's equivalent for their "Xbox points"; to make it hard to do the math and know what you're spending. Gambling and banking in SL had the same effect, because you can put in US$5 for L$1330, but if you win the gambling game or get interest from your bank you could wind up with L$5000 for your US$5 - a tempting and value-increasing deal)

The reason I say that, is because Zero Linden made it pretty clear that LL would be able to implement other currencies under central services, for the proposed structure. Yes, RL money is coming to the Grid... yup, Linden is probably going to stay, too.

So yeah, its a good idea I say that, because it happened

http://wiki.secondlife.com/wiki/Central_Services

I will have to go through logs, but basically, it will likely be nothing but an API and the other companies with grids can handle their own microcurrency payment methods.



Not necessarily... there was once a time when SL had such strong Linden values. However I don't really see that happening again anytime soon - yes it could - but something would be really awry for it to occur. This economy just isn't that big to have a currency valued so high. It was overvalued in the past - a case where there simply weren't enough people and the economy was ultra unstable to start with. As the economy became more stable and larger in overall memberships and level of transactions, we have a more realistic and stable linden exchange rate.

The thing that does make life easier with Lindens - is the fact that you don't have to go through a payment processor for doing *every single tranaction* which saves money. LL does not charge us for every single sales transaction with Lindens - but processors such as Visa, Paypal, etc *do*.

- as I said - Paypal is not available to everyone, and it will surely drive up the cost of merchandise if you have to get a payment processor just to do business in SL. Not to mention the fact many people will not qualify to handle credit card transactions - but can quite easily go on selling their small wares via lindens. You will have a medium of exchange open that won't have such difficulties for transactions that are effectively too small or difficult to be handled by USD through traditional channels.

================

Mmmmmm toast!

ah now I didnt think about this -

they could allow us to buy via our USD balances. If that's the case, there is no reason for Linden dollars at all. We can just add money to our balances, and pay out of our USD.

but the fraud potential boggles the mind, having all transactions in USD. Guard passwords like a hawk, for sure.

Everything will have to change though - a whole lot more fraud protection, insurance, etc... gah, I think the Linden dollar is actually safer than the US dollar, when I think about what LL will have to actually become, and that's a bank.

Yes that was my point.

And they could charge a service fee on the system of taking money in and out.

Basically to make up for the LindenX fees.

It would also mean no more stipends, etc.

And of course no more worry about the exchange rate.

Thus ... I see the Linden going before the LindenX if it becomes an issue.

Have you ever checked the exchange rate in small 3d world countries? (because heh, that's basically what we're equivalent to)

Try Jamaica - right now its trading at 69-71 Jamaican dollars to the US dollar.

Or the US$ which is worth 0.5 UK pounds...

yes to service fee
yes to no more stipend
oh - yes still worry about exchange rate (remember we're not all in the US)

Yep, I can see the Linden going first, I agree. But I think the Linden actually protects LL... if everything is done in real money, as I said - gah, the insurance and risk issues, you think its bad NOW with people putting money into dodgy investments. It would be much worse with real currency. Think about land sales for one - how many people make mistakes and accidently sell for 1 linden. Or say an object drains your USD balance via a malicious script that was accidently allowed to have permissions.

If that happens with real money, LL would be far more at risk I believe. They can point at the Linden and say its not real. You can't with the US dollar.

1 U.S. dollar = 0.680410968 Euros

Of course.

It all depends on how the Linden is treated by any authorities. Some posters mention things like tax clamp downs and investigations.

Its these things (if they ever happen) that would lead to the elimination of the L$ rather than it being declared no longer tradable, I think.

I totally agree for the virtual world of Second Life the L$ is a far better solution.

For the "3d web of the future" not so much. If the 3D web ever actually happened, no country would consider the L$ a fictional currency or points anymore.

That says nothing about the strength of the Jamaican ecomony. If Jamaica's economy were stronger by one measurement or another, then its currency might be vastly different relative to the USD than it is now. However, whether it would be lower or higher is unknown. We don't know. It is not a cause-and-effect relationship.

http://www.straightdope.com/mailbag/mexchangerates.html


This next part may help you understand better, if you choose not to read the whole report. I realize it is a pain to copy-and-paste links.

To put it another way, SL economy might grow and this might apply pressure for the value of the Linden Dollar to go up (your theory) On the other hand, at the same time, Linden Lab's trading bot might change its protocol and stop selling L$ at 266 to 1 as it is now. This would have a much more direct effect on the exchange rate. This would effectively be a change in "government policy" in terms of that Straight Dope article I linked. So effectively, the relationship between the SL economy and the exchange rate is meaningless. You see?

None of the areas of law to which you refer impose any regulations on the exchange of the Linden dollar for the US dollar. The Linden dollar is not a security and it is not currency.

Currency by definition is issued by a national government. This is a simple but crucial element of what legally constitutes currency and it appears to be lost upon some people posting in this forum. It is an important element in any analysis of what laws might impose regulatory requirements directly upon the actual exchange of the Linden dollar and the US dollar.

The Linden dollar is not currency, it is a commodity. Its existence and its exchange with the US dollar are therefore not subject to banking laws or legal tender issues. Commodities regulation in the United States and the international community is light. They do not impose any heavy or cumbersome compliance liabilities on Linden Lab any more than they do for, by way of example, online poker site operators for exchanging US dollars for virtual poker chips, which is to say almost none at all.

The areas of law you mention all come into play when Linden Lab and players collectively pretend that by putting a buffer of a fairly fixed rate commodity in the middle of a transaction that would otherwise have regulatory laws imposed upon it, whether it be US$ to L$ to an investment fund (i.e. a "bank", or US$ to LS$ to a poker table, that they have circumvented the applicability of laws to the transaction. It's this pretense that Linden Lab is going to have to get away from in the long run if it is going avoid similar future problems from arising, but that hardly necessitates that it abandon the actual exchange of Linden dollars for US dollars.

The term "monopoly money" and "fictional currency" is the same. It is a fictional means of exchange in a fictional world in a "GAME." Monopoly money is not subject to any real world jurisdiction.

If it is traded, in the real world then it crosses the border of "fictional"

Legal tender is a bit of a misnomer. People can accept pretty much anything they like, they place a value on the trade. In England and Wales only bank of England currency is legal tender but shops will accept Scottish money, Northern Ireland money, Euros, US dollars yadda yadda yadda.

The unit of trade isn't that important, it's the value associated with it between the two parties.