SL Banks are Toast - Yee Haw!

I get 1 dollar withdrawls from my credit card via LL all the time. Things can also be charged to telephones, pay pal etc. All the same things we see all over the internet. Fees are Fees.

A business that chooses to except Lindens is fine too. It's a necessity anyway so whatever problems come with it are a lot better then what will happen if it stays as it is.

I'd like to see a strong, ingame, Linden$- only economy, running right along side the real money payments.

Best part of all that happening, will be that LL can no longer construed to be responsible for real world transactions (although they will still be responsible to fight ingame technical frauds.)

SUPERB! Well done to LL for making a good policy decision. I guess there will be mayhem for a few days.....

The blog was not clear on investment houses - are they going down too?

Yes - and WSE conveniently closed for 30 days - and by the time those 30 days are up, they cannot put any ATMs in world...... what a coincidence!

Kudos, glad to hear the so-called banks are finaly joining their gambling kin.

Re. removing the L$ or removing the LindeX, I would be unhappy if they did that. The only way I could see them doing it and pulling it off though would be for LL to simply make our US$ balance the one that appears inworld. In other words, you want to buy that L$50 / US$0.17 t-shirt, you buy it and your US$ balance in the top-right corner of your screen goes down by 17 cents. If it gets to zero, you go to the website and you add credit to your account, i.e. you send LL $25 or more, from your paypal or credit card account. Hence, the 17 cent shirt stays 17 cents, and content creators can continue to pay their tier and other SL expenses without having to futz around with transfering negligible amounts of money coming and going with paypal. Folks would have to take the time to reprice everything in their stores from L$ to US$ and it would add a whole new level of security requirements as far as inworld commerce.

Having said all that though, I don't see it happening. Right now when someone gets ripped off for a bunch of L$, LL can play dumb and say it's a resident dispute etc etc. If you take away the L$ and make US$ the inworld currency then you can't turn a blind eye to the fraud -- not to mention the server hiccups and inventory issues that will suddenly be costing people real money rather than game tokens.

As far as maintaining a worthless L$ next to the US$ I can't imagine that would ever work. Why would a content creator (if they need their revenue to pay tier, or if they're actually making an income) want to do business in something that's officially valueless? Plus it'd require redoing the entire commerce thing so as to offer two methods of payment...

A freely exchangable L$ is a very good method of handling micropayments. It may not be perfect, but I think it has more pros than cons.

-Atashi

Slex and Onrex will not be affected as they are merchant centers and they do not offer interest as an incentive. Only non-accredited institutions that offer hollow investments with the promise of high returns are affected ---- eg all of them.

The bank to watch in this instance is First Meta -- they are a real bank and offer RL services as well. What happens to them should demonstrate the feasibility of any kind of banking in SL.

Cheers

But everyone is getting great interest on that money they will never see again!


I'm happy LL made this decision. Especially since it doesn't completely close the door on banks, it just requires them to actually be responsible and have some Real-World Regulation. It will be interesting to see if any banks actually emerge and do this.

The L$ is obviously just another name for USD in fractions. It's real now, at least for the community, because that's what they are imposing on us. When it catches up to LL then the L$ will go away for good because they're printing it which is a big no no.

And yes Sex is next unless they stop supporting PayPal.

L$ will eventually die.

Not sure which will happen first.

It'll work just fine. people can have a choice, staying ingame or real money. Even micropayments can be worked out.

Other then SL's terrible lack of security, there is no reason at all, a big Real World bank can't have services in SL, going through SL technology. (future--when SL is forced to be secure)

Even now they could link to their own website for home/business banking from a "bank' in SL.

Clearly a real bank and a fictional (linden only) bank on the same block would be feasible.

From a technological point of view though -- what you are saying is you forsee some merchants selling goods in L$ because they do it for fun and don't want/need real money while other merchants must sell in US$ because they need the revenue to cover tier or it's part of their RL income. To achieve that, you have to have both payment methods running side by side in world.

Or do you forsee people having to resort to 3rd party processing like paypal, when they want to drop L$100 / US$0.30 on a pair of pants? I think 3rd party processing for inworld micropayments is simply unfeasable, unless all US$ shopping is restricted to offworld 2d sites like SLX.

Which brings us back to inworld, and while yes it's technologically possible to have SL support and maintain two separate currency systems, I can't see LL doing it. Their systems have enough trouble coping with the one they have now. If US$ were to come inworld as the primary currency, then just change all the money integers to floats and it's more or less a done deal.

Anyhow, I'm curious on one point. If they were to make US$ work inworld, why would you even want to keep a worthless L$ around? What purpose would it serve, in your point of view?

-Atashi

This move was a long time in coming... just that it happened to be today, for whatever reason.

Interesting fallout, though.



Ginko:

- Nic 'wins' - he can't operate now by LL fiat (in addition to law).



WSE:

- honestly, this may be their 'get out of jail free' card, let's see if they use it.



Random banks, ponzi's, whatnot:

- it all ends today, folks.



Innocent academic researchers:

- So much for SL banks. Move on to crack cocaine research or escort studies.



Joe User:

- Let's hope you log in fast and cash out, or you are in for a nasty surprise.



Once again, the word on the street changes overnight. But like gambling, it will probably just all be driven underground. Which is better than what we have had.

LL can't print USD, they can print L$. So for them it's funny money but for us they treat it as if it's real.

So they will keep it around (fake for them, real for us) as long as they can.

The thing is, a merchant can easily except payments however they like--already!-- For real money LL wouldn't be involved at all. It would take a HUGE burden off LL to not be involved in that way.

Only two weeks left folks!!!! Quick! Bring me your money! I guarantee 60% return on your investment paid before then. I promise. You can trust me.

I disagree with this completely. How can I as a merchant *easily* accept payments in any form other than L$? I have a shop inworld, it operates automatically and without my presence. People walk or TP in, see something they like, right click, click buy, and the system transfers L$ into my account and gives them their purchase.

How can I *easily* achieve that with any other currency? And by *easily* I mean as easy and automatic as the built-in existing tools. Any more trouble than that, and it's no longer easy.

-Atashi

I use L$ to pay my landlord because he does not disclose any RL information (although his investments, now over 20 sims, are clearly on RL scale). He offers the option to pay via Paypal, in fact it is noticably cheaper to do so. But Paypal discloses RL name - and my policy on that wrt inworld business is, you don't get a shread of RL info unless you are a RL business.

If it's not a RL business, it has no privacy policy, nothing to keep them from making and sharing mailing lists etc..

So. I wonder if anyone with any account in any "bank" has been able to withdraw funds since the announcement? I'd be rather surprised if they had been. It will be interesting and amusing to see all of the half-measures and excuses that come out of the "banks" in response to this, trying to justify them not actually paying out. Probably quite a few will just vanish into the void.

The WSE closure just before this was either a lucky guess or a _significant_ insider trading matter.

It might be worth remembering that at one time NO banks were regulated/licensed/insured.

When regulation was introduced it was imposed on existing systems. As you say, sooner or later RL authorities would have stepped in, that would not have been necessarily a bad thing.

For things to happen people sometimes have to take a gamble or even just trust. Not everyone is a Ginko. Perhaps not even Ginko started out as a Ginko?

Rebecca, I think you are underrating the utility of having a microcurrency available.
If we all did our transactions in real world currencies, we'd have to:
- worry about currency conversion rates and fees betwen dollars, pounds, lira, yen...
- keep records of each tiny transaction, and pay sales tax on them
(and can you imagine calling up your state tax agency and trying to get a reading from them on whether your virtual merchandise is taxable or not?)
- be unable to make very small payments, less than $.01...for tips, for example.
- be subject to audits, oversight, and government busybodies of all kinds.

Prices would rise enormously. A top quality evening gown at L$1,000 sounds expensive, to the buyer and to the creator. If the creator is forced to think in RL currency terms, selling something that took her fifty hours to create in Photoshop for US$3.00 will probably seem pretty silly. Expect that dress to go up to US$10.00 or US$20.00.

The concept of a microcurrency for purchasing digital content has been kicked around for a long time. SL is the first instance where someone has actually managed to set it up (by the expedient of denying that it's a currency at all. Extremely clever!) We should not be quick to abandon this magnificent economic tool.

I think you just miss gambling.

I keep seeing comments like this, that L$ is going away because of this blog post..

Can somebody 'splain please why that would happen? I read this announcement as LL making a policy decision (vs being told by the Feds that they had to do it) that investment places without RL paperwork were going away.

Why is this being read as a declaration that L$ really are US$ or that LL has to change the way LL does things?

lol Ill risk my Lindens there anytime--a few anyway.

A lot of people, including me, expect LL's announcement to cause a run on the banks. So be it, I say. It's far better that the bankers should scarper off now, than let them continue to bilk suckers...er, I mean, investors...and close up shop at a time of their own choosing.

Better to chase the rats out of the pantry early, rather than let them have their fill.

(But to the person who suggested LL should have frozen the bankers' assets prior to the announcement: Good idea. Wish they had. Instead, they're relying on the dubious honesty of the bankers to "honor their commitments". Pffft.)

/me tosses a few clamshells and a pretty rock I found at the beach in a bag and heads for Bradley's Bank.

Do you have a pay pal account? Do you have a website? Its not hard to do. There are plenty of ways to have a free and easy to make website with a pay pal button. The conversion steps are just an extra and slower, step....not to mention that as soon as this happens there will be plenty of website services appearing, ready to set up and designed for SL products. Any issues with transfer of a product can be fixed by LL. Of course it will be a bit clunky at first and something to adjust to---but were it already like that you wouldn't know the difference. The way they did it was a miscalculation from the get go.