Hoarding, stipends, and the nature of L$

Imagine, for a moment, that way back when Da Boom first went boom, when even Eggy hadn't done anything yet, right when SL first went up, that Governer Linden was issued with L$1,000,000,000,000,000,000,000,000.

Further imagine, that every stipend since then has been paid from that sum.

That would mean there was no new L$ "being printed" - so there wouldn't be any devaluation, right?

Well, no. The experience would be identical to what it is now (in fact for all we know, that's how they do stipends). But what this shows is that if money is hoarded, and then money is taken out from the hoard and put on the market, it's identical to extra money being added to the market.

And unfortunately Governer Linden isn't the only person hoarding money. The nature of the SL economy is that those people who do well at selling things can wind up with huge amounts of money and nothing to do with it but cash out (or pay tier, which requires cashing out). Even an only-moderately-sized business creator I spoke to had a hoard of L$500,000. If they cashed that out all at once, it'd be identical in effect to an entire week's stipend being added to the economy, if every basic user still logged in and sold their L$ - ouch! And when money that's been sitting in those account balances for long periods of time suddenly gets spent or cashed out, it's identical to new L$ being created, just like it was in the Governer example above.

So if you're arguing that stipends need to be abolished - would you argue for freezing L$ accounts, too, to stop them having the same effect?

This is a very good point.

For some of us, we have *no choice* but to convert $L to USD.

Note that I didn't say: cut myself a check from the Company. I've never done that.




Especially with the land business. To convert people's $L into tier requires selling $L, and in a timely fashion. Tier payments won't wait.

I've had to convert about $L 350,000 recently; a few minutes ago I ordered a sim with it. (the people on the waiting list for Caledon II wanted action, advanced funding to get it going, and now the land is on the way)

Freeze land auctions for a while they are what's flooding the market.

Of course, you can only cash out US$2000 a month, or so the rules say. I wonder if there are exceptions.

The numbers you are using assume that there are only 10,000 basic members. (I think you forgot a 0 )




I think that most people that want the stipends removed are arguing for the basic user's stipends to be removed, not premium. The big difference is that the basic user is not contributing directly to LL's financial well being. I have heard some valid arguments to keep the $50L basic stipend, and given that we don't have all the financial data that LL has, I am fine leaving it to LL's best judgement.

Freezing everyone's balance of $L, would alienate everyone who's money was stolen. Anyone who gets ripped off like that, and doesn't tier down is an idiot.

It would also not stop the supply of newly created money to users who do not pay for it. So if it is determined that the constantly increasing money supply, is indeed a problem, stealing everyone's $L balance would only delay the inevitable.

Yes there are.
Just email Lawrence Linden. He will increase the $2000 cap.

Actually, I would argue that LL needs to create in-game
investment.. That would keep the L$ from being sold.

Thanks for that info.

Well, the problem is that the majority of "successful" users on SL aren't contributing directly to LL's financial well-being. In fact, pretty much the definition of success on SL is to contribute as little of your own money as possible to LL That in itself could be a serious problem - yes, of course, content creators benefit LL by offering greater variety and experiences on the game and attracting other users in, but when they are building the 200th casino when SL was doing fine with only 199 you start to worry about diminishing returns



Well, bear in mind I wasn't seriously suggesting it should be done - just saying that if you're going to take away stipends, you'd have to freeze hoards as well, because they have the same effect.

In-game investment would be a fantastic thing, but it can't easily be done. To do investment, you'd need to have a way to do loans and contracts in SL. And that really can't be done on a virtual world: the worst you can do is to ban someone from SL, and that doesn't bring back any money to investors. Unless you're going to allow investors to pierce the RL veil, but that would be a huge issue, and to be honest who'd really want to go there? ("You can get money to start an SL business, but if it fails, you have to cash in your RL money to pay back the backers, even if that bankrupts you IRL?" No thanks! )

If they are paying their tier in USD, then I would argue that they are indeed contributing directly to LL's financial well being.

This is how SL is designed to work. The content creators create compelling content that user's are willing to buy with $L. ($L that are supposed to have RL value)
The content creator sells his excess $L to users who purchase it with USD (this is what gives the $L RL value)
Finally, the content creators pay LL in USD for resources they are using.

In game investment would be great. But I'd require a whole lot of faith in the institution and enforceable contracts, but if those conditions were met, for sure.

Sounds like LL needs to upgrade the code to allow for
Loans and Contracts.. Instead of wasting time trying to
adjust sinks and monopolize the land business.

Exactly - but the issue is, the creators aren't the ones putting in the USD. It's the customers who do that, when they buy the L$ for the USD that wind up going into tier. The creators are putting in their work instead, and that's great. But it's a mutual thing: it takes the customers to bring the USD down in the first place, and it takes the creators to provide the stuff that makes them want to part with it for L$.

But that could easily show diminishing returns. SL could be reaching - or could have reached, or could reach at some point - the point where it has enough content that anyone who could be persuaded to put in USD will be. That does not mean there is no market for anything new, it just means that the "efficiency" of content at converting non-L$-buyers into L$-buyers is basically remaining the same, and instead the L$ are being spread thinner. If suddenly there were prim dresses to buy, and there weren't before, then I might have been persuaded to buy some L$ to get them with; but if there's 10 varieties of prim dresses when before there were only 9, I'm not going to buy more L$ to buy them all with, I'm just going to have more options to select the 1 or 2 or however many I do buy from (it won't be many if I'm paying real money for virtual, though!)

Furthermore, the culture of SL (such that "success" means that someone else pays for you), may be working against it. Once, I was talking to a new player about what they enjoyed, and they said, "I'm hope that one day I will be a big success in SL and own a lot of land." I replied that they could own a lot of land tomorrow if they wanted - upgrade to premium, buy some L$, tier up and buy a few parcels, done! But of course, they didn't want to do it that way. I've had other newbies tell me I was a "sucker" for buying Premium membership, and that there "must be something wrong with me if I couldn't just earn the L$". And it's worrying that there's this culture developing, which can only work against LL's profitability in the long run.

But how can they put this into the code? You give me a loan, I cash out all the L$ and never pay you back, and then I never log into SL again. Oh, and I'm a basic account, so LL don't have my CC# - or if they do, they don't have permission to charge it. What can the code do?

Only temporarily. The more you shift the perception from "SL==game" to "SL==business", the greater the temptation to takes ones [winnings|profits] off the table becomes.

I might note we're doing just this in Neualtenburg; we give the option of "incorporating" in the sim and depositing an amount to be held in escrow as security for investors. Essentially, creating the "better business bureau" idea that's been thrown about by trading on Neualtenburg's own trustworthiness. (We've been around for nearly 2 years in SL, so you can be fairly confident we aren't heading anywhere.)

And basic members loaded with 200 prim hair, playing Ken and Barbie, whipping each other with cat-o-nine-tails are?

Sorry Eeyore, I just do not agree with you.

Did they pay USD for the L$ to buy those things? Did those USD then get used, by those creators, to pay tier? Then yes, they've supported SL.

They are if they're buying the L$ to buy all those things, anyway. Or to pay for their Dreamland rental, or what have you.

Buying Lindens does not support LL, it supports other residents. Somehow thats missed on you, which does not suprise me anyway.

And if no one buys lindens how many people are gonna quit paying tier(which does support LL) something you should know.

I know that, you know that.

The OP does not, this thread is just another case of thumbing his nose at successful residents.

But people spending those L$ on things like, say, your radios gives YOU money, which you may very well use to pay tier, not to mention give you an incentive to hang around and continue to make things.

As I say.... I know that, you know that. Yes, sales go towards tier. It's an apples and oranges discussion.

The big picture is this, first the OP has nothing better to do than snub successful residents. His plethora of previous posts allude to that.

For what reason? I have no idea. What is in the written word makes no sense whatsover to me other than obssessive behavior.

Secondly, 1.9 has caused me a great deal of grief, having LL co-opt a resident run business which was the bread and butter that paid tier. The Governor now wants my job, which leaves me no choice but to tier down, because it's no longer needed.

Tell me, how does the Governor hold land in unpaid tier, whilst competing with it's residents do to help the bottom line of SL?

I suggest the answer to that would be.....It does more harm than good.