SL is too unstable to invest in

Linden Labs need to deal with the falling Linden now. No one is going to invest in a currency which could conceivably become worthless in a virtual world.

It's worthless anyway. It's a game. If you're here to make a profit, chances are you'll be sadly disappointed. If you're trying to cover your costs, you might get lucky once in a while. Why not concentrate on having fun instead?

Lewis

On the other hand, some small percentage of users actually does make real RL money in SL. It is these people, in no small part, that drive the SL economy. If the value of the Linden as currency isn't stable, all those people vanish, and the viability of SL as a whole is brought into question.

Yes, we're here to have fun, but we also need to make sure that everything works the way it's supposed to if we want it to keep going.

Lewis, you are starting to bring me around to your point of view. In light of the highly unstable economic environment, you may be the smartest of us all.

SL and the $L have always been high risk places to put your RL cash if nothing else because Linden Lab could cease operation at any time and everything virtual is gone.

If like Anshe Chung, you accept the risk and feel like you have the know how and hard work to turn a profit regardless, then the possible returns are large.

Whether you think SL is a business platform or a game doesn't matter. If you invest RL cash here, then accept it is a gamble and don't invest more than you're willing to lose.

It's just as worthless as a Picasso painting.

The matter of "worth" is in the eye of the beholder.

How can something (linden), that you can trade for real USD, be worthless?



You assume the OP is not having fun?

Fun is relative.

Your idea of fun is not everybody else's idea of fun.

Back in August 2005, I bought 4096m in a PG sim, with the goal of paying off my 25 USD/mo tier within one year.

If I could do that, I decided that I'd feel justified in keeping the land.

I met my goal, and have simply been having fun ever since.

Even in the real world, any investment opportunity will warn you in the small print that "the value of investments may go down as well as up, and you may not recover your initial investment".

It's part of the way any market works. Some win, some lose.

Why should people expect it to be different in SL? Remember that for every person making money, someone (or lots) of people have had to buy game money to pay them for whatever it is they do/sell.

SL is like a slot machine. Sometimes you get three bells, but most of the time you get one cherry.

Lewis

Any fledgling economy is going to be bumpy, but hell out in the big bad real world, companies operate in all sorts of unstable economies and people invest in some very volatile markets. They operate in countries in the midst of civil unrest/war, bombs are still going off in Iraq but people are doing business there. What if the country you're doing business in goes belly-up? Some are dealing with multiple currencies, and are subject to their fluctuations. It's not always pretty in the currency markets of those we consider stable, established economies.

Risk is inherent in doing business.

Sometimes in the new and risky however, winners emerge. This is a new frontier of sorts, new territory. Some people are looking beyond what SL is now, at what it could become, if not in this incarnation, but wherever that potential is finally realised. Technology, and communication alongside it, are developing at an exponantial rate. What some see as merely a game, could become the metaverse. Imagine the payoff for pioneers then?

Back in the shorter term, I don't see the current state of the Lindex as that big a deal. Some businesses, will possibly see increased volumes as Lindens become cheaper to buy. You can adjust your prices too you know. If you increase them by the same amount as the Linden has devalued, you have in effect merely kept your price stable. A lot of rent gets paid in US$, it doesn't matter much to those landlords what the Lindex does. There's all sorts of business models out there.

For the moment, we're dealing with an emotional reaction to uncertainty. Who knows what's around the corner though? What if the Linden is in fact approaching it's true value? What if it settles at some price other than what we currently percieve as a good price? If it settles around 351 for example , then we'll all adjust, and life will go on.

Me too. Now if could just have fun the next tier up....

I'm having a blast!

Well this is probably the first thing you've said that I can agree with.

But you make it sound like it's all left to chance. There's risk, there are elements of chance, just like in any business, but in the end, how you run the business usually matters most.

If some flood destroys your store, or LL goes out of business, you get to keep all the rubble, but those are risks one has to accept and weigh against potential rewards.

Frankly the centralized Grid, yeah yeah all hail and stuff, is far less stable than the currency market. It's the primary reason one doesn't want to invest any more than disposable entertainment income into Second Life at this point in time.

Lucky for Anshe she didn't take your "Play it Safe" advice...
Only the Risk Takers reap the reward. Everybody else oogles
from the side lines wishing...

She might be reaping the reward now... but if SL closes tomorrow, she's lost everything just like the rest of us. In fact, by basing her entire existance around SL, she's probably actually lost a lot more than most of us.

There are 'acceptable risks' and 'big risks'. If I had $10,000 to spare, and it was just small change, then sure I'd buy a few sims and see if I could make money - but only because I could afford to lose it if it all went wrong. That's exactly what most people do - albeit on a much smaller scale.

The reason? It's a game, not a stable investment opportunity. My guess is that if you went to a financial adviser and asked about the viability of investing your fortune in a computer game, they'd probably fall on the floor laughing. Oh yes, I know SL is propped up by a few 'venture capitalists' - but they don't matter... they're just taking a gamble like everyone else, only they have more money to throw away.

Lewis

I agree with Shaun.

As well as Surreal Farber
"Whether you think SL is a business platform or a game doesn't matter. If you invest RL cash here, then accept it is a gamble and don't invest more than you're willing to lose"

All the money I have in SL is expendilble, it is for entertainment value, win lose or draw. I don't build anything I just play and that includes the Lindex, maybe someday I will actually make some money. It is the chase that draws me to the Lindex not the possibility of actually earning a living. I don't need to earn a dime as a retiree who has more money comming in every month than he spends in RL. I hope I'm the future of SL as I see more 50 plus people in here than I imagined. A couple of weeks ago I met another retiree who was just here to gamble and told me he had over 1 million Linden for just that purpose. I don't gamble in the casino sense and in the RW invest in Blue Chip stocks long term which now pay ever increasing dividends. It is the endlless posibilities of SL that will keep me here and I'm just getting started.

SL is one of the best places to invest. No where else you can setup nice businesses with only a few tousand usd. Yes it is hard to deal with an unstable economy. But even at this unstable economy, it is possible to make nice profit.
And risks, you have risks everywhere, businessmen took risks while investing Russia after soviet union, and they made big money. It is also possible to lose money at unstable economies. Some people can take risks, some people cant. Some people make profit, some people cant. Some people are only talking while the others are working.

If only SL would advertise some of these possibilities other than "Build and make money in SL." Isn't there a lot of babie boomers that will be retiring soon. What a great market to tap.

Millions will in the next ten years.

Personally I believe that children are the future. We should teach them well, and let them lead the way.

If we can only show them all the beauty they possess inside it will give them a sense of pride and make it easier, because learning to love yourself, is the greatest love of all.

These people don't drive the economy, the consumers do. The economy is driven by those paying for premium and those buying on the Lindex. Only a small amount of money spend comes from wages paid by those making RL money out of SL. If these people vanish they'll be replaced. A few are indeed running businesses that can disrupt SL as a whole (if for example Anshe leaves there'll be some collateral damage) but you are overestimating their influence.

In the age of teh interweb, there are plenty of places to invest money! I think there are bigger obstacles and risks involved with investing in SL than the health of the economy.

Hmm, back in 1994 I started to use the net when (at that time) it was still very much a hobby type thing perhaps akin to being a radio ham.

When it dawned on me financial information readily ported onto the net I knew it had a future, big time. Indeed that was part of the reason why we had both the dot COM boom and later bust in and around 1999/2000. Nowadays with 8 Meg broadband and fairly robust connection and software, those dreams are reality.

Here in Second Life (and if we bypass "local politic issues" via Linden management) what we now have is a type of 3d web interface. Virtual reality if you like. There is absolutely no telling where this may lead but the possibilities are endless, even if it is not necessarily with Linden.

As a financial advisor you learn that what moves the markets is not always front page news but the snippets buried on page 59......

So I would conclude by saying (for me) £40/£50 sterling per month is not an issue especially as I can write it off against tax (I call it a type of web hosting and design business) As a marginal investment in both knowledge and design I am certainly not falling around laughing Lewis

Now if people left SL as a hobby, a pastime, entertainment... wouldn't that be so much better?



The dot com boom... now, aren't we suddenly seeing that in SL where the value of the L$ is dropping as people realise that they have overinvested in an insecure and volatile opportunity, and we see panic cashing out as everyone scrambles over each other to cut their losses?



I don't get all this '3D web interface' stuff... it's a 3D computer game. If you want to go from SL to the web you click on a button and up pops your browser with the website it tells you. It's not integrated, and I don't see how it can be.



What moves the SL market is people being greedy.



£40 a month isn't a 'big' investment when compared to other forms of entertainment/pleasure - such as a cable TV package, smoking or whatever. To call a computer game a 'tax writeoff' is somewhat laughable, to be honest.

Lewis