Virtual Banking and Economics

FYI---This thread was just plopped here in this forum...from the general forum

REASON?

Not only is this forum more relevant, but it's got about a quarter as many viewers. LL is scared out of their wits because of the truths exposed in this thread. I encourage all “Land and the Economy” forum goers to read this thread, top to bottom, and scream at LL, “THE PEOPLE NEED TO KNOW!!”

Yeah. I just noticed this. Put in a request in Feature Suggestions about a forum moderation police blotter.
/13/9d/51591/1.html


It's not "LL being scared out of their wits" so much as it is the current forum moderation policies. I think we could use some reform, because these policies seem to suffer severe myopia between "how most forums function" and "how these forums function."

But this is a different issue, and I doubt this is based on any form of anti-economic sentiment. Yes "the people" do need to know, but one does not imply the other.

Continue discussion.

Absolutely, though there are many, many differences.



I'm not sure, but I'm guessing you missed a word here. May I remind you that in the eyes of the Federal Reserve banks, US$ are worthless IOUs? At least since the end of the gold standard. But more to the point:



But they do exist. Are you proposing outlawing Ginko Financial?



You are wrong. There are three reasons people put their money in a savings account. They either want the interest, want the professional security provided by the bank to their money, or they want to create a psychological wall separating the money they want to spend from the money they want to save. The stipend is irrelevant to the discussion, since it is simply the equivalent of a welfare check. We fulfill at least two of these wants.



I have no idea what you mean here.

HEY. YOU'RE THE GINKO GUY!!!!!!!
Very detailed analysis of that one post.
Wish you’d analyze mine

HEY. YOU'RE THE GINKO GUY!!!!!!!

Everyone, please join me in a warm round of applause for the founder, CEO, and Corporate Chair of Ginko Financial, the one, the only, Nicholas Portocarrero!

Very detailed analysis of that one post.
Wish you’d analyze mine heh heh

I'm not an expert on the subject, but I would imagine anyone serious enough to get this near a court would go straight to the point, fraud. The same way all conmen are prosecuted. Of course, such things are very difficult when multiple jurisdictions are involved.




I call and urge all to accept responsibility for their own investment decisions and to stay out of the way of other people's decisions.







I don't need to be altruistic to be honest. I believe I can make a lot more money by being honest and managing this seriously for the long term than I can by simply running with the money. That being said, my personal morality would not allow such a thing even if that changed.



Why?



Obviously not. If we all did, nobody would have ever deposited a single cent in the bank. The fact they did show that, while they might like something like that, they do not feel a need for it. Apparently, even you don't -really- agree.

I'm curious as to where all the anomosity came from towards Ginko? I think SL residents should be able to make any business they want, so long as it doesn't conflict with the TOS and such. If someone wants to open a bank then so be it. I don't see how you can differentiate one business model from another when it comes to this. I personally support Ginko as a business owner. I have one of their ATM's at the entrance to my casino. I know a lot of business men and women in SL that also invest their money with Ginko. But that is our choices. You have the choice to not invest, so you don't, and you also come to the forums and whine about how it should be illegal simply because you don't like it. Well, get over it. This is a somewhat free second life.

BankS??



The reason we don't have some sort of insurance is:

1) it would just add another layer of risk. Who watches the insurers?? What would keep them from cashing the money out and dissapearing? I can control the money I keep, but not the money some third party keeps. I am more interested in the actual safety of the bank than the perception safety.

2) it would lower our returns.

Nothing stops anyone from insuring deposits. Anyone can go around saying "for half your daily interest I will pay back your full principal in case Ginko Financial fails" and under such an arrangement it would make no difference why the bank failed. You don't even need us to agree to it. An insurer might want to do heavier due diligence but you don't need us to set this up.



What difference does it make? How would you know my books would be truthful? You woudn't. You would need more information for that, information which we are just not willing to make public at this time because yes, we, or rather I, am hiding something. I value privacy, the day that becomes a crime sue me.

Allow me, Trevor.


This is partly true. However, continuing the analogy, Linden Labs does not go out to pay for their groceries in Linden Dollars. By contrast, it's fair to say that Fed employees do.

Still, your post here has some credence, so I will let it stand.



A classic attempt to devalue my argument. My interest is not to "outlaw" your business, but rather to state that, like Nexcom, it is not a niche serving a "need" in my opinion.

I would only propose such drastic measures if Ginko financial achieved "scam" status. Right now I am very wary of such a practice given the inherent lack of credibility, but I'm willing to give this practice the benefit of the doubt at this time.



As for perceived utility, let's cut to the chase here:


Perhaps you have read my earlier post in the linked discussion? If not, I suggest you do so first.

The "interest" is only a simple return on investment, so please don't attempt to confuse the facts with different terms. I have noted this as "Stable ROI (return on investment)" in my prior response, and noted that I would prefer making such investments myself than giving my money to someone to do it.

I also note "space" utility. I keep a bank account in the real world because it's unrealistic to store all of my money under my couch. I feel that this utility is provided for us in Second Life already, due to its inherent lack of hard currency. I also perceive real-world investment practices as a "safe risk," because banks fall under several laws and restrictions.

"Professional security?" Excuse me, but I would like to see your credentials if you wish to invoke such a defense.

A "psychological wall" is a good defense, but I somewhat disagree. With the rise of the debit account and credit card, bank accounts are less and less of a psychological wall than they used to be. Regardless, this is a good argument to make.



And stipend is not comparable to welfare checks, for several reasons. First, because it is not need-based - everyone receives stipend. Second, because it is increased or decreased not by LL, but by the actions of other residents in a commerce setting - it is a return on your investment of time. Finally, stipend, and moreover, developer incentives, are positively correlated to how well a business is doing, not the other way around.

A better analogy might be one of Bush's proposed Social Security reforms. Historically, I tend to be opposed to progressive indexing of this sort.




Imagine, if you will, LL playing a controlling interest in exchange rates on the GOM or IGE. Imagine a "transfer tax," or similar manner of influencing exchange rates. While this scenario is fairly unlikely, it is an amusing "what if."


And no, this is not just about Ginko Financial. It is about the utility, both perceived and holistic, that you and similar banks wish to convey. I do not see this as beneficial beyond the psychological "hey, it's a bank - let me invest," much like the rise of Nexcom. But you are entitled to your opinion.

Somewhat crude analysis, Nich, but I asked for it.

HEY, I think what I’ll do is START MY OWN BANK, set interest rates at close to RL, and use my Ginko savings account interest to pay for any mature withdrawals my members make. Sound like a plan?

I agree. The purpose of this discussion is the practice, not Ginko financial. However, it has been drawn out of a discussion on Ginko.

I have no animosity toward the business practices of others unless they are proven to be exploitative. At this point, mine is a fairly reserved opinion toward Ginko and this practice. I would not invest, and I'm curious as to why I should other than "they look like a bank."

Such is my interest and my argument.

Curiously, Hank Ramos did something similar a few months back, as I recall. The only difference is his is a unique grade of credibility. I am still curious as to how this will "sell" to people other than to catter to some niche I am not aware of, or to ignorance.

Somewhat crude analysis, Nich, but I asked for it.

HEY, I think what I’ll do is START MY OWN BANK, set interest rates at close to RL, and use my Ginko savings account interest to pay for any mature withdrawals my members make. Sound like a plan?

It was only what I perceived you meant, nothing else.




Okay, but what do you say to the hundreds of people who obviously disagree with you? There are no real needs in the world, only desires. People desire a cool virtual cell phone, therefore Nexcom is serving a "need" regardless of how useful you feel their product is. I personaly cannot comprehend why people spend money on virtual cell phones when they can just use IMs, but it's their decision, not mine. The fact they made such a decision means they have a reason to. I rather let market success/failure show which businesses are serving a need than debate the matter.




I did.



I don't see how that is confusing, but okay.



Aha! But some people prefer giving their money to someone else to do it rather making such investments themselves. In fact, that is what you most likely do. When you buy a share in say, Coca-Cola, you are essentialy doing the exact same thing. Leting the managers of Coca-Cola invest your money instead of going out and doing it yourself. A very small proportion of people invest their wealth themselves, most prefer to let others do it.



You must have a lot of money if the phisical space your money occupies is a concern at all here. Unless you live in a super-inflationary country where you need a garbage bag filled with cash to buy bread, which I doubt is the case.



That is a relatively new development. Were banks one, two hundred years ago useless?



I don't think you understand what I meant. Specificaly, if someone were to break into your account, they would not be able to simply pay the money out somewhere, they would need to withdraw from Ginko Financial. Now it is true that this is a very thin layer of security we provide at the moment, but it is a layer nonetheless.




Welfare checks are not need based, they are based on what the bureaucrat handing them out wants to base them on.



You would be suprised to know how many people get welfare payments in the netherlands.



In the same way welfare checks are increased or decreased by lobbying.



That would depend on your definition of doing well, but seriously, this is not something I want to argue about. If you preffer, stipends are equivalent to... receiving a check from the IRS for paying too much tax.

I was going to answer point by point the whole scam theory, but I thought it was unnecessary.



Good luck.

OK Everybody! I’m making plans right away to start my OWN bank!

.035% interest compounded daily! Competitive with RL rates!

Making small loans to verified newbies at competitive rates!

Join the madness!!!

Opening this Fall, New SL Bank and Trust!!!

Bring them to this debate and let them speak for themselves.

For my piece, we will have to agree to disagree here. Wants and needs are drivers of behavior, but in the same way perceptions can be myopic. Nexcom is a brilliant example because cellphones show many people wish to emulate real life.

This strikes me more as the "barbie doll" defense than a real service.

But is this reasonable, especially where money is concerned? And, moreover, is it necessary? Or is it just another example of art immitating life?



I would do so only if I trusted the company. In general, I do not invest, and I honestly would not trust you with my money unless you brought something more to the table. This is, of course, my opinion.



Huh? There's a little matter of not wanting my money to be stolen. Banks in the United States provide this. Counterpoint, I trust LL's system far more with my money than another resident.



You tell me.



Hold it! It's not a matter of trusting others. It's a matter of trust for you and your "services." This still strikes me as very illuminati. I'm waiting for a more concrete argument.

Analogy debate point dropped, because you asked.

Wow.

Yes, Ginko should either be outlawed or highly regulated!

Banks, in many ways, are the 'commons' of the economy. Just like SL protects the banks of processing time (the grid) they must protect the banks of the l$ currency.

If there were a massive rip off of l$ it would severly undermine trust in the SL economy.

Many economies have learned the hard way about the need to regulate the financial institutions of their countries. It looks like LL is going to have to learn the hard way as well!

Does ginko provide 0.2% per day?

That's 1% every 5 days, 10% every fifty days, or 70% per annum.

This totally sounds like a ponzi scheme!

Basically, he probably *is* paying out 0.2% for now in order to line up the suckers. Once he has a huge following he can cash out and leave everyone.

Does everyone who is involved with Ginko have all the personal details (real life name, phone #, address) and has verified them of the person involved in the bank?

One comment to make, I personally invested over 500,000 L$ into ginko and the numbers approach 550,000. I feel completely safe with Ginko.

Firstly, no one forced me to invest in Ginko, I agreed to do it from my own judgement, and I know the risks by giving almost 2k USD worth of virtual currency to someone to manage. However, I acknowledged the risks.

Why should we ban or outlaw Ginko? They have not done anything illegal or against the TOS, it is just an issue of trust and security that, they had been working on daily for the last few months. If having so many regulations will bring the bank down, heck, as an investor, I wouldn't vote for it if that would result in lower profit margins for Ginko.

Anyways, i shall repeat this, but as an investor who is solely responsible for 20% of Ginko's accounts, I strongly back this bank and I don't see why people should bash it just because they don't have faith in it.

Thats my 2 cents.

Oh, in a nutshell:

Some regulations? Yes.

Down right outlaw? NEVER!

Kavai-

Do you have all the real life personal information of the person responsible for the Ginko bank,

including

Name
Phone #
Real Life Address?

Anyone investing significant sums in the Ginko bank should also have a registered company that you should be able to find out about. They should also states some real life (outside of the game world of SL) guarantees about what they are doing somewhere.

If they don't have these, and are posting positively about Ginko then

- I am completely flabbergasted at their extreme naivety

or

- thinking they are mostly like a shill for the ginko bank and in on scam

I know this seems like I'm pinpointing an individual. I'm trying not to. It's just that this is the most exceedingly bewildering thing I have ever seen in SL so far.. and I've seen some pretty crazy things around here.

It was a topic me and Nich had to discuss on several meetings. Nich has proposed that our real life info to be traded and also to have some legal bindings in such a deal once the investment increase to a level. (more lawyers, etc)

However at the moment I do not know whether Ginko has a RL company that I can turn to. I only got info of the Chairman of the bank, and that is Nicholas Portocarrero.

ATM, you might think I am naive from the facts, but I guess my previous dealings with allowed me to have faith in them. However, this topic of increasing security, I do agree is essential and should be upgraded as soon as possible, cause I do want to know where my money is flowing towards and who I can contact in RL if things do go wrong.

A note to Nich:

We do agree that Ginko needs more clarity in the financial info of the bank, instead of me having to go after the various executives to find out info on the bank.

Kavai, you have handed over control of 2000 USD and you do not have the verified real life information of this individual (or information about the business)?

I have some, and the Chairman of the bank is in Brazil, while I am in China, it won't be easy for me to get all the RL info about him.