The Gold Lindon Dollar

1. I would like to see a stable currency within Second Life that everybody would have absolute confidence in, in terms of both buying, selling, holding, and investing.

2. I know absolutely how to do it with only one caveat listed in (3) below

3. I am assuming that if I create any object (primitive) and set it to non copy, non modify, and transferable, it will always retain those file attributes together with the name of the original creator within the properties tab

4. You would need to set up a limited company within the UK with records available at Companies House, audited by a Chartered Accountant, with an audited website where both full company finances were available together with a link to your accountant and Company House so all could independently verify.

5. You would need capital of around £2,000 to £5,000 (sterling), with say two company directors and a company sec.

6. You would need to appoint around 10 to 15 master agents who deal with your company.

7. These agents in turn would need the support of between 500 to 2,000 sub agents in all time zones prepared to deal/trade

8. There would be no tier to pay Linden Labs.

9. All agents and participants would need Pay Pall Accounts

10. The Limited company would create objects which they would sell via Pay Pall for real US Dollars only with file permissions no copy, no modify, and full transfer

11. The Limited company would either buy or sell any number of these objects to its master agents each morning at a random time between 10am and 12pm GMT as market maker, backing the sales or purchases by real sales or purchases of the share gbs mentioned in 12, 13, and 14. i.e a market maker in gold

12. The buying or selling price of these objects would change each day at the “strike price” determined by the company.

13. The strike price would be set each day by direct reference to the share price in dollars of an Exchange Traded Fund quoted on the London Stock Market, the name of this company is called Gold Bullion Securities (epic code GBS)

14. GBS is an exchange-traded fund that only owns one asset, that is 24 caret gold which is stored by HSBC (The bank). The share price will always be very close (within a few ticks) of the cash/futures price of gold quoted in US Dollars.

15. The master agents would be free to either buy or sell unlimited numbers of objects originally created by the company from or back to the company

16. The master agents would then deal with their sub agents who would also do the same, it would be expected the mater and sub agents would be content to pay a small cost premium between each other.

17. The sub agents would be prepared to deal with any avatar that wished to either buy or sell these objects. Also they would be prepared to act as trusted third parties to enable the in world sale of any land or content for objects created by the company paid for in real US dollars via PayPall.

18. The sub agents and avatars would need to take a view on the likely short term trend of gold futures quoted on all stock markets in terms of any transaction

19. It may be possible to also develop a paper contract version, however avators who did this would need to identify their real life ID to participate.

20. The currency could called “The Imperial Pound” or The Gold Lindon” i.e TIP or TGL

Sign me up.

I'd still have to trust the backing of the monetary unit.

I don't trust the backing, its as bad as the A$ idea.

No go..

I won't except these in trade exceppt at huge inflationary amounts and I would require the funds be transfered before I send the item.

Linden dollars? Sure. My prices aint moving, just ignore the 2500 gold linden or a$ cost, tis 25 L to you.

One problem: bugs can allow products to be copied, modified, and perhaps more importantly, lost.

Simpler way to do it:

Develop a in-world wallet system linked to Pecunix accounts, through their development tools. I don't really know, but I believe you can initiate spends, check balances and other things using tools which SL's programming language allows. Promote this with merchants. Done.

Sounds like a terrific idea... except how will it pay for itself?

Assuming the LindeX trades L$5mil a day every day...
at 3.5% service fees,
at 300:1 (L:USD) that's about
us$580 a day of revenue. (plus some quantity of us$0.30''s per trade)
1 accountant on retainer, 1 sec, 2 directors, 10-15 agents, 500-2000 sub agents...

That's a lot of staffing/commission to cover on roughly us$200k a year.

Or even twice that.

e-gold

Ebay offers no seller protections for seller's of virtual goods.

This would be a scammer's dream come true.

Send me your eGold: http://2327104.e-gold.com/

Here is the link to Gold Bullion Securties via the London Stock Exchange

http://www.londonstockexchange.com/en-gb/about/Newsroom/Media+Resources/Welcome+Stories/2003/09-12-2003.htm

Jonas, in all fairness solid gold regulated via the UK Financial Services Authority, the London Stock Exchange, and UK Ltd company law is pretty solid.

RBD, am not familier with E-Gold but if it is tightly regulated by either US or UK law and has the same principle as GBS perhaps the same applies, providing it can be traded over the bourses worldwide as gold prices represented by US dollars changes every minute. See what happened the second after 9/11 in the US and 11/7 in the UK

Nicholas, yes you have a good point on object file permissions within Second Life. An alternative way would be via a seperate account like perhaps your own bank terminals (Geco) in world. The concept is good though as I am sure you would agree

US citizens are not allowed to directly hold gold I understand....however there are work arounds as always, here is another link to a US/Canada fund with some of the attributes of gbs

http://www.google.com/finance?q=CEF

Also here is another live link to a CFD (contracts for difference) broker. Again US citizens are not allowed to hold cfds but they are very useful for hedging a position, including that of gold. IG Markets are perhaps the best known UK CFD provider although Deal For Free (CMC markets )is an alternative

http://www.igmarkets.com/

So my point is that there are many ways in which a gold market maker can directly monitor gold prices in dollars.

Who in Second Life can come up with a workable solution to achiving a solid gold backed currency to replace (and put to bed for ever) the useless Lindon Dollar?

I trust the London Sock Exchange. I don't trust currency based on it when its made by a resident in a game.

The only useless dollars I see are this and the A$. I trust LL far mor than I trust an individual player.

They might end up fucking me over, but at least I know who owns the 'bit' thats doing it.

People seem to forget the US stopped backing its money with gold along time ago..

Jonas, that is why I said it would have to be a UK Limited company with a chartered accountant, access to UK company house, and of course full disclosuer of real life identity so the rule of law applies

The problem is that there's no reason for a consumer to prefer a new currency over the L$. This means you'd have to force it upon them and that's not going to end well. Consumers buy L$ to spend them soon after. There's no reason for them to be concerned about long term value.

Given the bank <--> Master Agent <--> Sub Agent scheme you'd also end up with subagents who need to speculate too much. They have to invest too much of their own money as they have no way to do things just in time. I sincerely doubt you can find enough people to make it something that can span a significant part of the SL world.

I trust governments (and game creators) far more than vultures in said games. Companied up or not, your gold linden dollars are worth less than the toilet paper I wipe with to me. Don't bother trying to use them in my shops or in trade with me.

So far, it seems to me that the only people who would have enough RL$ to invest in your scheme are the money launderers. And that would attract the IRS and other law enforcement. The IRS is already trying to look into Paypal accounts to catch tax evaders. They would naturally be interested if large sum of money start being traded through SL.

Your scheme would only interest those with millions of L$, not the majority of us that have a very limited budget for entertainment time spent in SL.

Jonas, don't you worry yourself over it. I am sure everybody here is happy to respect your views. But I humbly suggest you keep an eagle eye out for gentleman in white coats who may seek to relocate you


To everybody else the point I am trying to make is but its own admissions Lindon Labs and Second Life is a platform not a game. Sure, that platform may enable gamers but that it not the sole purpose of Second Life.

A platform enables people to trade; to trade you need a currency. Second Life is not a Country (with a seat at the UN) but a private company. It is doubtful if it could afford to financially support a currency, hence the free market LindenX and others.

Therefore a currency in game needs to be supported by a first life asset backed investment, the best and most universal is gold

The value of individual monetary units is not material providing that the sum of the whole = the parts. Therefore currently each GBS share trades at $59 which is 1/100 of the price of gold. Clearly 1 gold linden dollar could trade at 1/1,000 or even 1/10,000 (about 59 US cents. That is around $L150.

If the concept of this technology powering Second Life is ever going to become a massive commercial success you need a viable currency to trade. Gold is one clear answer

I wouldn't dismiss any resident created currency/institution etc simply because LL didn't create it. 'Our world, our imagination' and all, cannot that include our economic imaginations? Isn't the whole point that if we percieve a need/want/use for something, we create it?

Paul-

You still haven't addressed my question.

As far as I can tell from the model you've described despite it's valuation benefits, the fees, surcharges and commissions necessary to keep the model in operation would be significantly higher than the fees for trading Lindens.

Despite the ongoing valuation slide of the Linden...

If it costs more to use your system, why will anyone use it?

--
jopsy

Feel free to use your toilet paper Have a good one!

Jopsy, sorry I missed that one, my apologies.

I would anticipate that the "market" would set its own rate for transfer/brokerage charges on Gold Lindens. My guess (a dangerous one when it comes to market predictions) is no more than 2% to 3% from the master brokers to the sub brokers. Volume of business rather than margin empowers profit. For example in the UK if I want to buy shares online by what is called execution only business my charges would be no more than around £10 to £15 per transaction plus stamp duty of around 1/2%

Between Avatars zero cost, after all if I have currency backed by gold that is vastly preferable to Lindens. Indeed a desire to hold Gold Lindens on both sides may attract

Finally can I make it clear I am putting forward an idea rather than launching a business in my own right. I personally have the financial skills but lack the computer programming skills to do this. Time is also an issue for me so any type of venture would have to be joint between major players

Hope that answers your question

Why would we use this system instead of an established monetary system, like the $USD ?

Agreed, an besides, I am an American, I like my money that I trade up in SL to california and to other residents, in california/ other residents they can do whatever, I will not give up the current money system (even knowing its going downhill) for something like a "golden L$, new a$ something" in the UK or whatever. I guess what I am trying to say is that the current system isn't OK, but I would prefer LL over this "new idea". As Jonas said, my trust goes into governments and LL more then anyone else in these kinds of "games". Just try and force it on us, I dare ya. ( I bet LL would never adopt this system anyways)

I wouldn't! Socks always get lost. ALWAYS!!

Would be interesting to visit the sim storing all these prims though. Kind of like Fort Knox.

Seems like it would lose money, but its a bit complicated for me to put in the effort to figure it out when I don't think I'd use the system.

Fair enough... And I certainly would love to see the volumes increase to the point where this model had a decent chance of properly funding itself.

Damn... I know I should have reported my MoneyMarket earnings
from PayPal.. Guess I'll see you guess up the river...

They let you play SL from Jail, don't they?