Millions of $ in SL wealth lost

Linden $ has lost about 70 cents/1000L$ in the last few months. I conservatively calculated the cumulative linden$ owned in game to be between 2 - 5 billion (based on various parameters that I won't go into detail). This means about 1.5 - 3 million US $ worth of wealth has just vanished! If you were to extrapolate this to whole US economy, relative to SL size, it would a staggering 10-20 billion dollars!

I suspect we haven't seen the bottom yet either.

Woohoo! Let's all panic!

good thing *I* don't worry about made up money. Feel bad for those who are counting on Second Life to make a living though.

Good time to hit the GOM so... W00t!!!!!

Aren't conspiracy theories fun?

Is that the average $L in circulation rate for that period or the $L in circulation now? Much of the $L must have come through stipend and therefor should not be considered as "loss" in the sense I think you are using it.

Additionally, since your $L hasn't devalued in SL in the same way, you only recognize this loss on conversion to $US, which for some of the $L in circulation, wasn't ever going to happen.

Either way, buy low! Dollar cost averaging coupled with the upcoming surge in exchange rate due to the growing market for pink, fuzzy bunny slippers should garner you a 25% annualized rate of return in the next 3 months. BUY NOW! BEFORE IT IS TOO LATE!

You forgot to tell him to buy BULK. Always buy bulk, everyone knows its -cheaper-.

Ok, I'll ask my buddy George Soros whether it is worth playing the L$ market now

Maybe it wasnt worth all that much to begin with?

I have some bulk for sale if anyone is interested.

Considering that the L$ originally traded for $0 / L$1000 I'd say it has appreciated in value nicely.

And since today is View Things in a Positive Light Day (VTPLD), cheaper L$ means more people buying L$ means more people with disposable income means more people buying things means more L$ in sellers pockets means stimulation of creativity and the economy.

The free stipend to basic users is a puzzle in this respect. A gift from the premium subscribers. In the hope that people will enjoy the game enough to start helping us to pay for the cost of running the servers, and helping us to pay for the time spent creating the content and providing things to do. By spending some US$ on a premium sub, or on GOM. Or we hope they will start creating and contributing new content or services, priced at a less than real-life hourly rate. That is a contribution worth donating (for a while) to encourage too.

The premium stipend can be best seen as a bundle of currency purchased with US$ via the subscription.

Both stipends are in fact bought by someone with US$, even if a little indirectly, and not always by the person enjoying them. So if the rate has dropped, the people holding value during the drop have lost part of that value, in terms of what US$ it can be converted into. In that sense there is a "loss". If we are using the word "loss" as in "profit and loss" we would then have to additionally enquire into how the L$ were obtained.

For the user with only a basic membership, paid long ago (now free) his saved L$ are a profit at any exchange rate. But a loss in the sense that they were originally worth (and he could have exchanged them for) more.

Any disagreement about whether there is a "loss" probably arises from two people each using a different one of these two different meanings.

Turns the old math of having multiple alts on its head...

All the players who did this on an annual basis are hurting now, despite the boost they may have gotten from First Land.

Yay! Let's throw all of our L$ away and frolic naked in the woodlands!

Where do you get 2-5 Billion L$? Are you talking about all the value of the game, or just cold hard L$ on hand?

Last I checked, Philip said 300ML$ are out there, even given the amount of time that has gone by, I would say no more then 400ML$. Really the loss would be only 300KUSD.

Where do you get 2-5 Billion L$? Are you talking about all the value of the game, or just cold hard L$ on hand?

Last I checked, Philip said 300ML$ are out there, even given the amount of time that has gone by, I would say no more then 400ML$. Really the loss would be only 300KUSD.

That number probably includes the nominal L$ value of land.

There is no nominal value of land. Someone has to purchase your land in order for you recoup. You no longer are automaticly refunded $L1 per meter for releasing land to public.

Public land now costs $L2 a meter on the preview, perhaps that will be carried over to the main grid with 1.7. A minor additional money sink.

Moved to Land and the Economy Forum.

I'm not sure if the USD value of L$ dropping necessarily means that the USD value of land has dropped.

All public land is now auctioned off, so there is no more 1L$ land, at least as far as I know.

Land still goes public if you release it on purpose.

In the past when you purposely released land you were refunded $L1 per meter, the nominal price of the land. That refund is no longer in effect. Claiming that land currently costs $L1 per meter, even if it was an accident and you are claiming it back. This is also the cost for programs like Land for the Landless

If public land is $L2 a meter that means things like Land for the Landless will increase to $L2 a meter.

The idea here is that the base cost of land has doubled.

There is a value of land for the same reason there is a value for $L. People are willing to spend money, which means the land is worth the money peole will pay. With unlimited auctions, the land should fluctuate around an average price of US$1000 per sim as long as the amount of land demanded continues to increase as it has been. That works out to around 4.36$L/meter2. Right now I count 1184 sims on the region list of the map. Alot of this land was also bought for much more than 4.36$L/meter2. There is also the problem that if you tried to sell all these sims at once, you would have to take a much smaller price. Govenor Linden also owns alot of this land, so the numbers aren't completely accurate for the value of land.

For fun though, 1184 sims * 4.36$L/meter2 is 338,312,560 $L. More importantly it is $US1,184,000. These values are very innacurate for the reasons I've mentioned, but the magnitude of the numbers gives you an idea of what type of money is at stake with SL on the land side. Land has a very real value, even if it is hard to calculate presicely.

Dark Korvin:



This means that value of land can not be used to boost the numbers as far as the total amount of currency in the system. Its not additional money.

I agree that the value of land does not change the amount of currency in circulation. It is a part of the measure of wealth however. If land can get you $L which can get you $US, it is just as much a part of your wealth as $L is. If I own a sim of land right now, and $L1000, I could make much more than US$3.50 in even a days time.

And by the way, if you put a sim up for sale that is not first land for $L1/meter2, you will most likely see it sold in a matter of minutes. If land sellers aren't online, it might take an hour at most. Land does have a liquidation value.

I say again, if we are talking about loss, but not in the sense of profit and loss, I would say you have experienced a US$ loss over a time period if those things you can sell for us$X at the start of the time period, you can only sell for less than X at the end.

In this sense people have suffered a loss both on their cash holdings and their land holdings through the exchange rate slide.

If we consider one individual, and his comparison of his return from selling at the beginning of such a slide, and that from selling at the end, assuming everybody else does nothing, or behaves randomly, then things are this simple.

If on the other hand, we compare the before and after US$ return from selling, as before, but on the assumption that everyone else does the same, and sells too, no calculation is possible because all prices collapse so totally that the selling price of everything is just about zero.

In the first comparison, the loss can be calculated in the simple manner, directly from the exchange rate fall, and does indeed apply to all your land at its actual sellable price, as well as your all cash holdings.

Of course, in fact, neither of my two scenarios apply, because the L$ rate drop induces selling, which induces L$ price drops, which induce more L$ rate drop etc etc, round and round the twin rate and price loops, until we cannot say quite what caused what. Prices may startt rising while rate keeps falling, as vendors adjust them upward to limit the loss. We cannot know at what point it will stop. Presumably when people reevaluate the underlying factors, and conclude that the "confidence and expectation factor" is unduly pessimistic, and believe it sufficiently to start to buy more currency.

Not everyone will join in the selling, so reality will be in between the two scenarios.

But the loss to an individual is real if he is forced to sell at the wrong point, or if the underlying factors have indeed changed (been changed?), and the rate never comes back up.

Moral - try hard to time the start of your investing, and its duration, to avoid catching such a slide. Problem - that statement is darned obvious, and we can't do it because we have no crystal ball.