Virtual Banking and Economics

Good lord, this is so surreal.

Dude if he's making this kind of cash there is absolutely no reason in heck he'd need your money to do it.

He's just giving out those returns to sucker in more people.. this is so classic ponzi it's almost funny.

[Baleted because I'm not endorsing *that* message]

How hard is it to make 25k per day?

Not hard at all. In fact, thats the reason why I trust Ginko. Its not hard to make money on SL especially with so many operations they have.

Also blaze, before you make more comments that I am Nich's alt, I would like you to go ask any land barons or business owner and see how much an alt I am. I might be hardheaded to invest so much money in Ginko, but, it does not make me someone's alt as I actually do have something called FAITH.

You don't make money by sitting around hoping it'll come to you out of nowhere, you make money by investing huge sums of your own money. If you run a casino, assuming the odds are in your favor, you will make MUCH more money by allowing people to bet $100's than you would if you only let them bet $1 at a time. And you need a lot of money to be able to back up those bets. If you trade curency, you will make MUCH more money by trading a few $100,000l at a time, buying low and selling high, than you would by trading only about $20,000l at a time. That's why I assume Ginko, as well as every single other bank in the entire world, needs all our money, and doesn't just make the money itself from scratch.

P.S. Sorry you weren't the first one to realize that if you buy $1,000,000l at $3.93US per share ($3,930US), and then sell that $1,000,000l at $3.96US per share ($3,960), you can make $30US every time, which comes out ideally ($4 average per share) to $7,500l. I imagine this is something one could do on an almost daily basis. First, though, one would have to have the $1,000,000 to start with.

Eh? This is the basic rule of making a fortune in a free market system; buy low, sell high.

While you're speaking to blaze here, I guess the crux of my message is "why give your money to someone else to do it when you can yourself?" In the real world, heavy regulation and accountability clauses make this feasible. In a virtual world as fickle as Second Life, I doubt the business model.

I believe what is necessary to appease much of this skepticism is a bona fide prospectus from Ginko that shows current accounting numbers and exactly how the funds are used. This is what RL financial companies do and it is one of the major tools investors use to decide which companies or funds to invest in.

I think the business model is basically the same, all based on rade, suply, demand, and what one can get away with. Main difference between "the real world" and Ginko exploiting the same concepts of the real world in SL is the real world has a lot of laws, rules, and regulations that it has to follow, which means it provides more accountability, and possibly more security (although even FDIC insured bnks sometimes fail, and BADLY), versus Ginko, which CAN run off with your money if they wanted to. Heck, $12,000US worth of Linden $ can be converted into A LOT of pesos down in Mexico.


As for why give it to someone else when I can do it myself? Well, personally I'd rather spend my time doing something else, and giving someone else my money to have it make a bit of interest a day for me, than spending that time working myself, even if it pays more if I DO do it myself. Doing it myself would also involve sitting around doing research on business ventures, doing a lot of paper work and accounting, and all the other things I would much rather have someone else do. Also, as I mentioned, you generally need a lot of money to make a lot of money, and I don't have a lot of money, however, a bunch of people coming together and putting their money into one pot DOES provide a lot of money. Come to think of it, this is EXACTLY the type of service mutual funds provide, down to the fact that Ginko most likely diversifies in a lot of different investments to balance their losses with profits, instead of being a like a single stock.

The "I'd rather be fishing" defense is a valid one. I can agree there.

But...


Mutual funds typically provide their information to the SEC. Here's a fun page on that:
http://www.secbd.org/mutual.html

Once again, the lack of sources of information, regulation, or accountability really makes me nervous.


Curiously, mutual funds have had their own share of scandals. Here's another interesting read:
http://en.wikipedia.org/wiki/Mutual_fund_scandal_%282003%29


As for "needing a lot of money to make a lot of money," in Second Life (and the emerging internet culture), that is becoming less and less the case.

The only difference being: I'm not here to make money.

Yea, we already have storage so,

This is just a guy who wants a casino and he's doesn't want to risk his own money. It's not a bank.

My prediction is the guy will get tired of giving away his personal money to cover interest and a staged "massive casino exploit" will leave everyone empty handed. Damn scripters always exploiting stuff.

Remind me to turn you into a newt.

Yep, you are right, Ginko does not provide specifics as to where they invest. Due to that there is NO WAY that I would invest anything like $1,000US or above with them. My curent $250 or so I'm more or less ok with

And, for the time being, I kinda AM in there to make money. At least that's curently one of the many reasons I spent time in SL.

Simply put guys, you pay $10 for THIS GAME. You get about 2.50 or so BACK in linden (750) when you register.

If you get a job or win a couple tringo pots and get up to about 3000L, you've made your reg back, then just start collecting linden and throw it, AND THE 3000, into the Ginko system.

You've GOT your $10.00 in merchandise, and you're MAKING interst off of that $10, and you have 0 risk.

WHY THE HECK ARE YOU PEOPLE COMPLAINING ITS REDUNDANT? You have a chance of making money, for basically NOTHING.

Now I had about 3000 L in there, And if the interst rate had sayed up at .02% in about 53 or so weeks, I'd have well over 25.00 USD in there according to Excel, at a $3.95 GOM rate. Now if Ginko drops to .01, it will only make abut a dollar. Do you guys realize that if it stays at .02, and you have 1 mil L in there, you are MAKING about $8 a DAY SIMPLE interest. This things APR is phonemenal for real small amounts of money, and if you don't invest your real cash in there, you are making a profit of NOTHING, and so is Ginko, so is GOM, so are the feds, Almost NO BODY loses as long as linden is traded. ANd if you are investing your real money, even just a little, you're preserving the sytem for everyone.

The US's economy( and Europes to a lesser extent) NEEDs a boost like this, so I say stop whining, this kinda stuff may save our butts economy wise, and its about time.

Yes Ginko can take your Linden and run, but remember, if they are lending your money to real businesses in the real world, they are a REGISTERED BUSINESS in real life, you could probably sue them, plus I don't know how it works by Federal law, but you might even really have FDIC, if you pressed the feds on it.

in short, leave a good thing be already.

I don't think the owner of the fund should have to reveal how it's being invested. Hedge funds don't do this sort of thing, mostly because these secrets are how the business makes money.

However, not giving up his RL information means that he wants to hide if things go south which means that there is a distinct possibility of it happening.

actaully....if Ginko is a registered US business IRL, you should be able to get it from the BBB.

Zeta, Ginko Financial is not a registered United States business.

There is no insurance on money put into Ginko Financial, nor there will ever be.

if it were a registered US business, iit might have gotoen cuaght in that, but if not, then yeah, there won't be.

I was just IMd by the GF Ambassador, who has been spying on me. He inquired about the way I do business. I believe he asked, since I can’t post chat logs, something like 'just wondering, what’s with the 20,000 withdraws and deposits?'

I don’t know about you, but my RL bank doesn't question my withdraws, deposits, or transfers, no matter how frequent or infrequent. Kinda scary, how they treat their accountholders. Anybody else think this is a bit odd?

Partially.

In Real-World banking, many institutions (including the one I do business with) set a limit at how many transfers you can have from a Savings Account in a month.

The logic for this is simple. Since it's possible to "game" the percentage system by shovelling all of your funds in on payday, it's simply more managable to have an upper bound for tracking an "average" amount of funds in the account for that period and for discarding those kinds of attempts.

I've actually had a savings account liquidated because of not reading this exact fine print before. Thankfully, they just sent all my funds to checking and let me open a savings account again.

------

The bottom line is yes, there is a good reason for this. However, not a good excuse for spying. These things should both be figured out beforehand and agreed on by both parties prior to opening an account.

"Spying" is specifically against the TOS. If you feel someone is "spying" on you (i.e., evesdropping, monitoring conversations, collecting chat via scripts, following you around), then AR them. Don't complain about them in the forums.

And it is very common for financial institutions to make an inquiry when they see "unusual activity". "Unusual activity" means activity that is different from what most people do, or a sudden change in the pattern of activity in an account. The reason is to detect possible fraud, and to protect systems from being crashed or exploited.

You wouldn't be provoking them so that you can complain about their reaction, would you?

Buster

Not that it would have to be fixed like a gold standard but a floating Linden that tied computing grid capacity to inworld currency would provide some of the automatic protections that Blaze advocates. Can we have a real currency without some linkage to the computing power we need to enjoy SL?

Another nice advantage would be from better Linden $ supply measurements or even greater transparency, such as:

total float, or cash exchanged per period
total money supply, % growth per period
velocity of cash
amount of deposits in savings or investment pools inworld
total US$ put into Lindens via LL auctions
total amount of L$ stipend per period
total amount of reputation-based stipend premiums

And some other stats would be nice for comparison purposes, for instance:

US$ cost (fully-absorbed) per prim for all of SL
% prims for infrastructure/LL/land/etc per sim

If I had to guess I would suppose that the total stock of L$ has grown quite high because most residents don't always spend at the same rate as their stipends. Also, many new players invest hard currency up front to buy Lindens that they use to create similar lifestyles as they enjoy in RL as quickly as possible.

Other thoughts?

Uh... I was logged into the holding account and noticed the flow. I would hardly call that spying.



No, I inquired about the way you do business with us. If I may explain the concept of the bank again, we can't make any money at all if people keep their money with us for five minutes at a time.



Yes, I did. I added an "I'm curious" before, but yes.



Yes they do. They are required by law to do so. If they don't question your movement is because your movement is not unusual, but even then, be certain that they are monitoring it.



Funny how you find scary when I ask you in private what is going on, but have no problem publicly disclosing that you were doing this.

I withdrew most of my account yesterday because I wanted to see if I could make a quick catch in the brand new Cyberland market—only for a few hours was it withdrawn, and seeing how I wasn’t going to land anything, I put it all back.

And then, every few days, I like to withdraw all my money for a second to count it and make sure it’s still all there. That takes about a minute.

So it’s just completely false and somewhat malicious of you, Nich, to imply that I only have my money with you for 5 minutes at a time. I wouldn't mind, Nich, if you posted exactly what percentage of the time my money was “in” my Ginko account, spanning my entire account history (14 days). Of course, you may not want to go through the trouble, being that I’m sure it’s greater than 99%.





My RL bank doesn’t contact me directly to inquire about suspicious activity. They rely on an external agency that does nothing but that, and as an external entity, they don't know me and I don't know them. Anonymity is achieved. And plus, how could it be fraudulent if the same amount of money that was withdrawn was redeposited?

Does anyone not think there’s a definite conflict of interest when the main accountholder of a bank is the same person who is monitoring all bank activity who is the same person that authorizes large withdrawals who is the same person that really RUNS the bank and sets all policies and regulations? Hmm…

That doesn't explain why you withdrew it multiple times. In fact, at the first time I was at the Cyberland ATM with you, so I already knew that is what you were likely doing. I wondered why you would change your mind for a second, but I only contacted you much later, directly after another round of withdraw/deposit.



I'm fine with that. In fact, I wouldn't even notice that. I DIDN'T even notice that.



Oh come on. If there is anything malicious here it's your posts. Like this:

"Some unknown person, residing in Timbuktu, decides to pull a scam in SL, as far as banking goes…"

I get the feeling you are just looking for something to attack me on.



Huh??? I do not know what you are reffering to at all. Perhaps your bank is special, but even swiss numbered accounts are not anonimous. The ones responsible for monitoring your activity are the bank, precisely because they do know you and can make a better judgment regarding what constitutes suspecious and what does not based on your disclosed economic activities and whatever else they know about you. I find this claim of yours very strange.



Off the top of my head, I can think about it being an attempt to crack our system. In RL it could be an attempt to launder money, though I doubt this could be the case here. Someone might have also broken into your account and withdrawn the money, at which point you logged back in and deposited the money again. But it's exactly because I DON'T KNOW, that I had to ask.



It's called ownership. Would you mind pointing out the conflict of interest in this?