"money given to new Residents will be steadily reduced"

full quote:



http://secondlife.com/newsletter/2006_03_22/#EDIT

I can live with that. But wouldn't it be fantastic if SL's economy did become the largest in the world in a couple of years? That would really say something good about SL. Ah well... if wishes were horses... they aren't going to just do away with stipends all at once. It will at least give us all time to adjust and hopefully be earning enough Ls to keep on doing our thing.

I truely believe that stipends will need to be adjustable depending on the current rate on the Lindex and how many are available per resident. Linden Labs will still need to print Lindens otherwise money sinks will drain them all out of the system in a matter of time. I hope that Linden Labs does figure out the correct balance between printing money and draining money so that we can have a good idea of what to expect the value to be say a month from now. GL Linden Labs.

Woot! They said something!
Sounds fine to me.

I just hope that if the stipends are adjusted that it is done carefully so it is not quite the shock it could be.

Sounds like what we have to shovel up in the yard from the dogs leaving it to me. They need to get a clue. The older residents do not buy goods in SL. most of them make thier own. Merchants are dependent on the newer folks and thier stipends buying merchandise. When the stipend goes the market in SL goes. There are too many who either don't buy L's at all or are not even really aware they can. Second Life is already the most expensive chat around, along with being about the most unstable. Once again if LL wants to remove stipend as a source of income for basics then they need to require an in world minimum wage..enforce it with stiff penalties, limit the offworld selling of L's. Do something about the rigged gaming. and put a stop to certain individuals grabbing freebies and preying on new folks who do not know any better with them. stipend is not what's killing the SL economy. It's market fixing and unchecked corruption within SL.Until they fix those issues then removing stipend is just going to be like every upgrade since we have registerred...just adding more problems without fixing the old ones and turning a blind eye and a deaf ear to the real issues. Something they are already notorious for.

Well this is what it says about any changes:
"This will happen carefully, and over time, all in an effort to preserve the value of the Linden Dollar".
I'll take that at face value for now.

My experience as a seller contradicts this sentence. A lot of my customers are old residents.


Yup, that's how it sadly is. It seems the economy in SL just doesn't grow fast enough


My country tried this back in the 80s. You know what happened then ? Even African countries wouldn't accept our currency anymore.

Jes I think you need to read that article again..




If it continues at the rate it is now it would be the largest in the world. That means that the current economy is growing at a very rapid rate. Way faster than LL expected.

The moment the premium stipends go below an 'acceptable' level, I'll go down to basic account, and rent land (tier) instead.

Oh, no! I just remember I cannot go to basic: I have a yearly premium account that's paid till next january.

I'm fsck'd
Thanks Lindens.

I know it isn't much consolation but you can always go back to basic next January.

Remember, releasing new land is the counter to those sinks. When a new sim is made, the owner gives LL $1000 USD minimum. Then the owner parcels off and sells, effectively trading the USD for Linden at a lower rate than the exchange rate. The owner then may need to sell Linden and won't care if that sale is at a rate lower than the exchange rate, because s/he will still make money. This lowers the value of the $L which is tied to the value of and availability of land.

Yes, but since the population of SL is apparently growing even faster, everyone's stipends is still bringing in more L$ than the economy can absorb by growing...

"money given to new Residents will be steadily reduced"
NEW RESIDENTS, not you. The ones who will join after a time.

As i sent to the place that was at the top of this forum. Why do we complain i feel rather then lowering what is there control it in retrospect. IE a buffer area selling at a max value of 125L - 1 USD and a Minimum of 300L - 1 USD this controls linden value from falling to low or going to high. It also allows leway for users to actually dictate what Linden Value is worth to a degree without greedy people pushing value to low!!

Since I started Sl, the linden has fallen about 20% in value. My one year subcription (technically, my alt's one year sub) is now buying less linden buying power than it did.

Another way of putting this is that inflation and currency depreciation will effectively reduce the real value of stipends without LL having to cut nominal levels.

Historically, the best thing a citizen can do under such circumstances is to go into debt (the real value of the debt declines over time) to buy real assets (property, shares etc have been favourite havens). Still waiting for an SL bank to offer that service...

Price fluctuation doesn't seem to indicate that you can actually buy less with your $L on average. This is purely and exchange issue at the moment. That should change, but since pricing hasn't been that sophisticated yet, we shall see how quickly the market adapts.

There are no real assets worth investing in to make this RL strategy viable.

That's a good point, Dani.

Told same thing a week ago:
....At current rate, L$500 stipend worths US$1.66, At 250L$/usd L$430 worths same)..
/130/87/94891/1.html#post945368

I've said as much; make the stipend adjustable according to the current Lindex rate and SL really becomes the world's first "social credit" economy.

Lewis Nerd...is that you?

Historically the taxes on real estate have not been higher than the value of the real estate every year.

Here the tax on a sim (the lowest rate) matches the value of the sim every six months or less. It kind of kills real estate as an investment.

There aren't any other real assets, actually. I suppose you might see games and such as investments, but they are more of a drain than an income source for most folks.

interesting, thanks !

Granted, the circumstances of SL don't make it act like it would in reality, but it seems to be a logical extension. Only LL can actually create L$ in SL, so scaling the number of L$ to the number of people in the economy seems logical, and (if I recall correctly) is actually something LL had been trying - a sort of target "median balance" so there were enough L$ in circulation so (for example) every avatar could have 3k or whatever if it was divided perfectly evenly.

The missing component is scaling the main L$ producer, stipends. Which, I note, is also smarter than the idea of "cut the stipends entirely" - under this scheme, it's possible for stipends to be greater than L$50/500 a week, if there's a need for a lot of L$ to be "printed".

Stop me if I re-state something incorrectly, I'm trying to encapsulize everything.

Aliasi pointed out that Linden may stand fit to make the most $ through scaling the L$, while Dani states the best way to sit through this period would be by grabbing up things that accrue value faster than the L$ drops -- in other words, selling content and as Persephone stated, turning land.

Jesrad stated his belief that that the economy can't withstand much less sustain this kind of growth, which apparently a speaker for Linden Lab has also mentioned previously.

Kazanture pointed out the somewhat overlooked that the only direct change made is to the bonus L$ given to new users, due to the higher-than-expected population growth.

Barbara's point was that if you pull $$ globally, you're not just pulling from sellers, but from investors as well. (this has been stated before in many different ways, and will be stated again, and again, and again ...


And not exactly in the same words that Gabe stated above, you've got to work hard if you _really_ expect a significant profit from this. (By significant I mean a lot more than the measily $120-200 USD/month - you _can_ work hard for that, but it's not worth the price.)

If I've got it all wrong, don't hesitate to flame-on.

So, when compiling everything stated, I think the hope may have been that land traffic incentives would allow Linden Lab to grow even more ideas through the community by rewarding higher traffic and through the vote system, which imho is a success, and then reap the best ideas by integrating them and/or their creators into the company or game, but they weren't expecting the consumer base to increase so drastically, so they have to expand their own operations, but unless they change their methods, it would be unrealistic to expand. That's my _guess_.

It could be that the users will make a comeback and rally the L$ into something comparable to the USD itself ( I wish) But the L$ is simply a dynamic placeholder for USD ... it's not the same. But even then, (unless Linden starts flooding the economy with sinkholes, or worse, flood the market till it bottoms out, and then close down Second Life) remember, the L$ technically has no value and is property of Linden. Linden directly states that in their terms of use.

_IF_ the best method of profit _IS_ through handling L$/USD exchange fees and selling land/re-selling land, _THEN_ a depression _IS_ a must for Linden: they draw people in with yearly account prices of $6.00/month (about L$1806 as of March 06) but give out stipends of $2000/month (now about $6.62 USD as of March 06)

Other massively multi-user systems just put out a flat fee of $10 a month.

Linden gives you a way to profit from it -- and even if the L$ does devalue past that point, yearly accounts are still almost free with that stipend -- even if you were to use that money directly in-game, the only way it'd help Linden is if the majority of it got tapped by an in-game sinkhole such as uploading content or posting classified ads, which I imagine is highly profitable by Linden Lab. -- Since it's an exchange market, "creating" more L$ rather than "selling" it for them is like throwing boomerangs - if they flood the market, they're going to be hurting when the community sends a tidal flood in response by selling all the L$ created, so they create ways to keep the boomerang from turning around: upload fees, classified ads, land auctions, land rentals, abandoned land resells, SIM tier systems, exchange handling fees, and other sinkholes. That's probably how they make most of their money, and in my best guess, the sheer growth of the economy coupled with the cost of company expansion to sustain such growth was a scenario no one expected.

When the L$ breaks past the L$333/USD mark or when some other financial strategy is pushed towards more significant profits, Linden Lab makes much more US$
It's in the company's best interest for the exchange rate to diminish even further if they can keep users in-game even with good content and high rates. They can profit from investing their own L$, then re-raising the official rate at something that still allows them to make USD off of ALL account types. Furthermore, this stifles the proliferation of casinos and dwell chairs and lagged sims --- even though overall we're all paying more. But then, most people are barely paying anything to play this game if they know what they're doing -- heck, as it is, a basic account can easily rake in L$28k/month.

But hopefully, things aren't anywhere near that bad, and the above is just an extreme worst-case scenario that you should never pause to consider ... well, maybe for a moment.

But it's always worth preparing for all cases (best, avg, worst) when you can. Everyone wants to make money. Some people want to do so via this game.
(I sure do!)
But Linden Lab created it, and this was their livelihood first; it'd be a dangerous gamble to pool everything into the whim of Linden Lab - every individual working at that company needs to make a living, too, and that's what they're doing. So be prepared, whatever the case may be.

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And besides, (Finally, MY statement) if you have a business in cell phones and Linden Lab still offers cell-phone account validation, who knows how many free accounts can be made to sell the bonus profit and then deleted afterwards? It's probably for the best that the start-up bonus is decreased