Other worlds have bank problems.

No, not about SL, but interesting to see another online setting having bank problems.

http://kotaku.com/5348223/bank-deficit-freezes-eve-accounts


"From the MMO-as-IRL file, EVE Online's biggest bank has frozen accounts for anyone who invested any kredits with it, after it was discovered that the bank is 380bn kredits in the hole, without the funds to cover player withdrawals."

Running an online world is a complex business. Probably many elements are 'critical' to success, but inspiring confidence in your banking system is probably number one. (And so the people behind the one in your link will probably not get a second chance in the race to dominate virtual worlds. Not that SL seems likely to give ground to anyone---but if they do, it won't be to those guys!)

You would think other VWs would know that their in-world "banks" are mostly Ponzi schemes . When I first read this, Chris, I thought it was a RL bank freezing a VW account and pondered what USD figure would LL need to have in their account to cover a mass run on the Lindex.. then I decided my head hurt

Considering what has happened to RL banks this year you'd think people would realise this isn't just a virtual world or Ponzi issue.

One of the reasons the biggest land bot runner liquidated his million meters is because it was too much money to leave in a game that changes the rules all the time without warning.

I never leave more than $50 USD in my SL account.

Yes, but then we get into discussions over fiat money and fractional reserve banking.

*reads and wonders* Is this where Ginko went after it folded and fled from here?

Well, they admit they made a huge mistake and well, if I was a player there that had ISK in it, I'd write off my deposit.

In Devs we trust.. barely. Everyone else is screwed.

IAWTP.

Exactly! Furthermore, we've recently come to realise that even the RL finanancial system is 'virtual'.
Owe £10,000 - you go bust
Owe £1,000,000 - you go bust
Owe £1000,000,000 - you get bailed out.

That's not a problem with Eve Online. Criminal activity is allowed by the game's terms of service.

Stealing and scamming IS the whole game to some people. Convince someone to give you there money, lie about it, nothing wrong there. Only times it goes outside the TOS is if an exploit is used.

That was my understanding, as well, except it's "criminal activity" (in game terms) as opposed to criminal activity (no quotes). Theoretically, at least.

As ISK are not supposed to be sold, the argument is that real money trade is not a factor. Thus conceptually winning Eve is like winning a Monopoly game.

But of course, everyone knows there is a black market for ISK.

Considering most of us here know what scams have historically taken in large numbers of local grid residents, eventually someone might use that knowledge, ignore their conscience and go make a few hundred thousand dollars over at Eve. Wouldn't surprise me one bit.

Not an avenue for me, as I couldn't sleep at night and do that to people. But if I ever "turned evil" for whatever reason ~ lab accident perhaps, or radioactive insect bite, or twisted superhero suit that grants great abilities but twists the mind ~ then Eve Online would look really, really attractive.

Of course, I doubt it holds a candle to what can be done with the king of no~holds~barred money and reputation games: Ebay.

Doesnt Ashe Chung have a bank in EvE?

Anshe Chung appears to be active in SL, Entropia, IMVU, and Frenzoo.

That's correct. It would be okay if they were running an in game ponzi scheme where the money is being redistributed by the con artists in game for in game use. Using it as a real life ponzi scheme is why it would be shut down.

By way of example of what is tolerated, and perhaps even encouraged to some extent, one clan, I think it was called the Black Hand, infiltrated another clan for over a year with undercover operatives who befriended and won the trust of key leaders and officers in another clan, even taking on officer positions themselves. They were treated like family and perceived as friends by everyone in the infiltrated clan. In one fell swoop they enacted their true objective, which was to fulfill assassination contracts, loot the clan of all of its assets and destroy the rest. By the end of the day they had taken almost everything the other clan had, decimated its leadership, and got paid a large bounty by the corporation that hired them to boot. The event was so notorious it got coverage in Escapist magazine.

AH was Entropia I was thinking of.

Actually, the RL bank problem is exactly a Ponzi issue. RL banks went gambling at the world-wide casino with the taxpayers bankrolling them.

Yep, that's precisely what the Glass-Steagall Act was put in place to stop the LAST time it happened, back in the Great Depression.

Thanks to our good ol' buddies Phil Gramm and Jim Leach, who determined that it wasn't needed anymore, we got a nice wake-up reminder call from the past about why banking and investing businesses MUST be divested. They are a conflict of interests that CANNOT be resolved.

The taxpayers are bankrolling them now, it happened in the UK too. However what choice did our governments have? The banks have got us all by the short and curlies.

It is not. Two of the requisite features of a Ponzi scheme are the promise of tremendous (sometimes even ridiculous) growth with zero or near-zero risk, and the fact that none of the money is actually invested anywhere at all. Without these important points, absolutely ANY type of investment, period, could be called a "Ponzi scheme". A typical RL bank, with its less-than-one-percent APY, can hardly be said to be misleading customers into thinking they will get rich off the interest. And the banks did really invest the money - poorly, but nonetheless.

Where the banks screwed up is in violating a very basic principle of investment - the amount a growth is and should always be proportional to the amount of risk. You want a whole lot of growth really quick? There should be a whole lot of risk along with it (and if there doesn't seem to be any, you're probably dealing with a scam, which is 100% risk if you think about it). On the other hand, if you don't want any risk of losing your investment, you shouldn't expect huge growth. Banks, by their nature, are supposed to be very-low risk, very-low growth. Since the bank doesn't promise tremendous returns because its main job is really just to keep invested money secure, it shouldn't be investing in higher-risk ventures like subprime loans to people with low credit (i.e., a track record of not paying back money). Since those banks weren't increasing their customers' APYs, it's obvious that the point of the investment was to make more profit for the bank - and they got screwed, much to the chagrin and expense of their customers.

As for the EVE thing - well firstly, no real money was involved (although it is an interesting case study, like looking at an economy in a petri dish); and secondly, the bank wasn't a Ponzi in the most technical sense - one of the bank executives was stealing money for his own purposes, which is somewhat different because it was never intended to happen that way.