Back of the envelope calculations for our economy...
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Enabran Templar
Capitalist Pig
Join date: 26 Aug 2004
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08-21-2005 15:39
From: Gabrielle Assia Well, except for the fact that most people owning land are doing something
that makes them $L (selling content, renting land, etc), and then they move
that $L out of SL via GOM or IGE to pay their tier... in effect reducing the
amount of $L in-world. No, not in effect reducing the amount of L$ in world. As Hiro said, they're only transferring the money to another person, who then sells it back into the world. The money doesn't go anywhere.
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From: Hiro Pendragon Furthermore, as Second Life goes to the Metaverse, and this becomes an open platform, Linden Lab risks lawsuit in court and [attachment culling] will, I repeat WILL be reverse in court.
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Hiro Queso
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08-21-2005 15:40
I think of things like GOM as a reservoir. Once filled up, it has little affect on the economy unless flow in is not equal to the flow out.
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Hiro Queso
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08-21-2005 15:43
Even when that balance is disturbed, I am sure its not a major affect on the economy. I am guessing that amount of L$ in GOM is a very small percentage of L$ in circulation. It has a big affect on how we see it of course, as we use the likes of GOM to sell and buy our L$.
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Gabrielle Assia
Mostly Ignorant
Join date: 22 Jun 2005
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08-21-2005 16:01
From: Bret Hornet
As I mentioned in another thread, there needs to be consumption of them to prevent their price from dropping. I would suggest something along the lines of a cost to create a transferable object (something you could sell). As it is now, it costs content sellers nothing to sell as many copies of somehting they make as they want. If they had to pay L$ to create salable objects (to Linden Labs) I think the problem would fix itself.
You could flood the market with Linden but they become an expendable resource necessary to create saleable objects. Maybe there could be a new flag on something that allows it to be sold for money vs. only given away for free. I wouldn't suggest hurting people who just like to build for fun or give stuff away. Call it a sales tax if you will.
Yes, I suggested something much like this a few weeks ago. My solution was to induce some kind of "labor cost" associated with creating items. Specifically, it was to add something like "liquid prim" which had to be harvested. The time it takes to harvest is something that could be charged for. The harvesters would sell their liquid prim to content creators who would use that to construct their items for sale. By taking away everyone's ability to create infinite numbers of copies for free (without labor charges), means more people will need to "play" in this SL economy and circulate money.. whether using stipends, GOM, or finding a job. Of course, the content creators all hate the idea because it means they would have to raise prices to cover extra expense... and some "virtual purists" hate the idea because they don't want to add something like "required work" to a virtual environment where they say it's not needed. I'm sure LL iteself is not for the idea (at least at the moment).. because right now they need as many new content creators as possible, and those people who now create for free would be penalized. I'm with you on needing a "cost" to create items to help the economy, but it's certainly not a popular idea  Gabrielle |
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Hiro Queso
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08-21-2005 16:10
One thing we are guilty of, myself included, is using GOM as an indicator of the market. Can we really do that? I mean the total number of orders open, both buy and sell, do not even match the amount of L$ one resident has been seen holding via the leaderboard not too long ago. If a Climatologist put forward an argument for global warming based on an observed average temperature rise for ONE particular month against the previous year in ONE location only, he/she would get laughed at.
With comparitively little L$ in GOM, it WILL be susceptible to huge fluctuations when someone with more L$ than the average Joe deicides to use the service.
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Gabrielle Assia
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Join date: 22 Jun 2005
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08-21-2005 16:21
From: Alondria LeFay - More dramatic ideas include removing the stipend from users past a certain age (give newbs money for a while to help establish themselves). Take some of the excess saved and use it to pay for "Linden Jobs". Linden Jobs could be things like running their video stream for an hours. Write a review of an object. Report on an event. Take newbs around on tours. Building/scripting contracts. End result: don't pay people for existing... make them do something productive.
Now this is one of the best I've heard Is there anything like this on the voting proposals? |
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Gabrielle Assia
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08-21-2005 16:36
From: Hiro Queso The difference is that when you pay an upload fee, the money is burned, its gone for good. Paying into GOM or Ginko is no different to passing your money to another resident, in fact that IS all you're doing. The money is still there, just under different ownership. Why do you say my $L is "burned" when I do an upload? It just goes to LL and comes back out as stipends... no difference I see. |
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Hiro Queso
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08-21-2005 16:38
From: Gabrielle Assia Why do you say my $L is "burned" when I do an upload? It just goes to LL
and comes back out as stipends... no difference I see. No. The money would come out as stipends whether or not you upload something, you can't tie the two together, one is not a result of the other. |
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Gabrielle Assia
Mostly Ignorant
Join date: 22 Jun 2005
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08-21-2005 16:47
From: Enabran Templar No, not in effect reducing the amount of L$ in world. As Hiro said, they're only transferring the money to another person, who then sells it back into the world. The money doesn't go anywhere. When I sell L$10000 on GOM, I understand that money is no longer available to circulate INSIDE the SecondLife world until someone else converts $USD -> $L... right? The $L is indeed transfered to another SL resident, but is also out of circulation (to some extent) until someone buys $L to get it back in. My comment was to point out that having to pay $USD for tier probably does take out $L from the (circulating) economy in this way, when the land owners sell $L for $US to pay their tier. I understand part of the thread is also about needing more sinks which supposedly remove $L from the economy in a more permanent fasion, but I know of NO sink that does that. Even supposed sinks like uploads and ratings are not really taking $L out permanently since those $L are getting put right back in as stipends. Gabrielle |
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Hiro Queso
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08-21-2005 16:54
From: Gabrielle Assia
I understand part of the thread is also about needing more sinks
which supposedly remove $L from the economy in a more permanent
fasion, but I know of NO sink that does that. Even supposed sinks
like uploads and ratings are not really taking $L out permanently
since those $L are getting put right back in as stipends.
Gabrielle
You have to think of them as two different unrelated things. The stipends are coming whether you upoad or not. If we upload textures, that money IS permanently removed from circulation. If we dont upload, that money is not removed, but we still get get teh same stipend. Example - someone receiving 500L stipend per week. A. The person uploads L$100 of textures in a week. Net change of L$ in circulation is +400L B. The person uploads no texture in the week. Net change of L$ in circulation is +500L |
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Hiro Queso
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08-21-2005 16:55
From: Gabrielle Assia When I sell L$10000 on GOM, I understand that money is no longer
available to circulate INSIDE the SecondLife world until someone
else converts $USD -> $L... right? The $L is indeed transfered
to another SL resident, but is also out of circulation (to some extent)
until someone buys $L to get it back in.
My comment was to point out that having to pay $USD for tier
probably does take out $L from the (circulating) economy in this
way, when the land owners sell $L for $US to pay their tier.
When you sell money to GOM, its no different to you buying an object, or giving it to someone, it's still in circulation. You could consider GOM a kind of reservoir, but it's not a sink. |
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Gabrielle Assia
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Join date: 22 Jun 2005
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08-21-2005 17:04
From: Hiro Queso No. The money would come out as stipends whether or not you upload something, you can't tie the two together, one is not a result of the other. I see what you're saying, but I wonder if LL would still be giving out just as much in stipends if they were bringing in less $$.... and I mean both $L and $US.. since money is money in any form. As a biz, LL wants to make SL attractive to people, so they sign up, and enjoy their service (game, biz opportunity, etc).. so, as a "grand opening" marketing scheme they set aside an amount of advertising dollars each month that they currently give out as stipends. If LL is losing money on this, I'm sure they will adjust over time. If the giving of stipends is a temporary thing to get people hooked on the metaverse while it's still new (and little content, and not much big time biz), that is a valid move on their part. I'm sure the US$10/mo ( L$2659/mo) paid for premium membership covers your L$500/wk stipends and allows LL to keep a bit to cover costs..... of course, US$10/mo allowed for more stipends when the exchange rate was higher. People who own more land help cover the extra LL biz costs even more. Personally I think we CAN tie stipends to upload/rating income for LL along with $US tier income.... again.. money is money... whether it's $US or $L.... and if those "sinks" bring in extra $L to help cover stipends, then that means less monthly tier costs have to go toward stipends, but in the end... all incoming $L just get circulated back in. Gabrielle |
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Hiro Queso
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08-21-2005 17:17
From: Gabrielle Assia I see what you're saying, but I wonder if LL would still be giving out just as
much in stipends if they were bringing in less $$.... and I mean both $L
and $US.. since money is money in any form.
As a biz, LL wants to make SL attractive to people, so they sign up, and
enjoy their service (game, biz opportunity, etc).. so, as a "grand opening"
marketing scheme they set aside an amount of advertising dollars each
month that they currently give out as stipends.
If LL is losing money on this, I'm sure they will adjust over time. If the giving
of stipends is a temporary thing to get people hooked on the metaverse
while it's still new (and little content, and not much big time biz), that is
a valid move on their part. The stipends cost them nothing, they create them from thin air, they need to set no money aside there. As LL officially places no RL value to them, any decisions on how L$ are created or destroyed are motivated by maintaining a stable market, not by RL profit for LL. From: Gabrielle Assia
I'm sure the US$10/mo ( L$2659/mo) paid for premium membership
covers your L$500/wk stipends and allows LL to keep a bit to cover
costs..... of course, US$10/mo allowed for more stipends when the
exchange rate was higher. People who own more land help cover
the extra LL biz costs even more.
Personally I think we CAN tie stipends to upload/rating income for
LL along with $US tier income.... again.. money is money... whether
it's $US or $L.... and if those "sinks" bring in extra $L to help cover
stipends, then that means less monthly tier costs have to go toward
stipends...
The problem is, officially L$ has no value to LL. They do not sell L$ themselves, and they do not trade on GOM. From: Gabrielle Assia
but in the end... all incoming $L just get circulated back in.
No they don't. Sinks are permanent removal of L$ from circulation. |
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Enabran Templar
Capitalist Pig
Join date: 26 Aug 2004
Posts: 4,506
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08-21-2005 18:12
Cue the economic misunderstanding infinite loop:
But it is...
Well, actually, no it's not...
But it can...
Really, no, it can't...
It will...
Er, well, no it won't...
I think that...
Ah, yes, well, that's not quite accurate...
But I want...
Well, okay, but that's not really feasible...
It is...
No, it's not...
...ad infinitum.
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From: Hiro Pendragon Furthermore, as Second Life goes to the Metaverse, and this becomes an open platform, Linden Lab risks lawsuit in court and [attachment culling] will, I repeat WILL be reverse in court.
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Nolan Nash
Frischer Frosch
Join date: 15 May 2003
Posts: 7,141
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08-22-2005 02:36
From: Enabran Templar Cue the economic misunderstanding infinite loop:
But it is...
Well, actually, no it's not...
But it can...
Really, no, it can't...
It will...
Er, well, no it won't...
I think that...
Ah, yes, well, that's not quite accurate...
But I want...
Well, okay, but that's not really feasible...
It is...
No, it's not...
...ad infinitum. As well as the point-blank, "You're wrong." An all too common reply from many of the self-styled "experts" that inhabit these forums... The audacity is astounding, especially considering the fact that SL basically places us in uncharted waters. Never the less, some folks believe they have all the answers, and speak in "absolutes". Groan.
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Hiro Pendragon
bye bye f0rums!
Join date: 22 Jan 2004
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08-22-2005 02:44
From: Roberta Dalek Basics only get a stipend if they've logged in during the previous week. Most of the 36,000 will not have done so. Love this idea. "You want your welfare check? Show up and get it!"
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Hiro Pendragon
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Hiro Queso
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08-22-2005 03:28
From: Nolan Nash As well as the point-blank, "You're wrong."
An all too common reply from many of the self-styled "experts" that inhabit these forums...
The audacity is astounding, especially considering the fact that SL basically places us in uncharted waters. Never the less, some folks believe they have all the answers, and speak in "absolutes".
Groan. There are some things we can speak in "absolutes". Some things are quite simply black or white. Example - a money sink is permanent removal of L$. |
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Hiro Queso
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08-22-2005 03:37
From: Hiro Queso There are some things we can speak in "absolutes". Some things are quite simply black or white. Example - a money sink is permanent removal of L$. Sorry, I am 'absoluting' again  |
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Nolan Nash
Frischer Frosch
Join date: 15 May 2003
Posts: 7,141
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08-22-2005 03:43
From: Hiro Queso There are some things we can speak in "absolutes". Some things are quite simply black or white. Example - a money sink is permanent removal of L$. Would that it ended there...
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Hiro Queso
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08-22-2005 03:48
From: Nolan Nash Would that it ended there... True enough. I think it happens everywhere, people get carried away with what they believe or think and the post can come across the wrong way. Most of us are guilty of that from time to time. |
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Stephane Zugzwang
Brat
Join date: 26 Jun 2004
Posts: 192
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08-22-2005 03:48
The first post is blatantly ignoring what money is, and as such is completely and utterly wrong. Money recognizes VALUE. Inflation happens when the the money supply grows faster than the creation of value, ie. economic growth.
SL is a frictionless econnomy, where it costs next to nothing to produce original value, and exactly nothing to duplicate and sell a good. Hence a huge economic growth. As long as residents find it wothwhile to buy Chip's, Nephilaine's, Shiryu's creations, SL can sustain that growth of the world.
You're not seeing Neph increase the price of her clothes? Prices are stable. That proves that the money supply is measured carefully against the value available in world for residents.
SL's economy is sustained by its organic growth, steady money supply, and strong immigration rate. Why talk about inflation when you can't measure any? Some people should go back to "Basic economic concepts 101".
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Stephane Zugzwang
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Hold infinity in the palms of your hand and eternity in an hour
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Nolan Nash
Frischer Frosch
Join date: 15 May 2003
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08-22-2005 04:03
From: Hiro Queso True enough. I think it happens everywhere, people get carried away with what they believe or think and the post can come across the wrong way. Most of us are guilty of that from time to time. You're right, I have been guilty of it myself, although I do try to conciously avoid it. I suppose it's because I do not find RL very applicable to SL. Especially when we talk about the economy. This is one big reason I rarely get involved in this section of the forums. While I am definately no economics expert, I took micro and macro (I pretty much had to) in college, and I just don't find much of it to be very applicable here. Supply (as the poster above me alludes to), is simply not analogous in any way to that of it's RL counterpart. Logistics for physically delivering content to consumers (for the most part) does not apply, production costs after initial development are all but non-existent, etc. It's a whole different animal. It's going to be an interesting road.
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Hiro Pendragon
bye bye f0rums!
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08-23-2005 00:09
A hotline post: /invalid_link.htmlFrom: Hiro Pendragon
Economy - More L$ Sinks
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Given a slow, steady decline in the price of the L$ against the USD, it's becoming clear that we need more L$ sinks
The main issue was that LL is no longer selling land for L$ in auction. The bottom line there is that LL is no longer accepting money that is useless to it - since LL can't sell L$ for USD.
Here are 3 very doable L$ sink suggestions that will work, because they aren't based on some arbitrary tax-that-goes-nowhere. Taxes - whether land, income, gifting, or teleporting, is essentially raising the fee to be in SL. If it's LL's goal to keep a 1-time fee available to users for full access, taxes are simply unacceptable as a solution.
Ideas:
1. Chage's idea:
Linden Lottery. Lindens could have a lottery, and skim a % of the winnings and just trash it. My idea - make that % variable so that it can be adjusted as per the need of the economy.
2. Robert Dalek's idea:
Stipend? You only get it if you have logged in during the current week. Not only will it skim away a lot of less-than-active-accounts just sitting around for stipends, but it will also decrease the gaming of the stipend system through alts.
3. My idea:
Kill dwell. Period. No more dwell. Dwell is basically a subsidy for social events, and since clubs are giving away money to get people to their events:
1. Small events are crushed because they can't compete with money.
2. The clubs clearly aren't using the money to develop. Bottom line, people are bored, they're looking for a fun place to hang out. They only are picking places that dole out money over other places that don't. They'll come without dwell.
Take the dwell, put it into stipends for all accounts. Now newbies can afford to pay admission to events, and the whole reverse-backwards "pay to come to my event" is appropriately re-reversed. Or kill half of the payments altogether. Give half to stipends, and the rest just trash.
From: Robin Linden
Some good ideas here Hiro. We're looking at this issue now, and should have more information for you and the rest of SL soon.
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Hiro Pendragon
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Kyrah Abattoir
cruelty delight
Join date: 4 Jun 2004
Posts: 2,786
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08-23-2005 00:58
does nobody listen to me or what? why not tieing the stipend to the sinks?
this way no risks of money recycling problems, eachw eak stipend is recalculated based on the week's sinks
seems logic to me
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Stephane Zugzwang
Brat
Join date: 26 Jun 2004
Posts: 192
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08-23-2005 02:19
It's certainly already the case Kyrah. World prices are stable, so you can be quite sure LL is handing out stipend carefully every week based on things like immigration, sinks (upload is very similar to importation in the RW), number of transactions conducted (=speed of money), value creation. This thread is all about second-guessing them, which is about as useful as trying to second-guess Alan Greenspan . LL has MUCH more infomation than we have, and money supply is clearly not managed half-hazardly. Best,
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Stephane Zugzwang
--
To see a world in a grain of sand and heaven in a wild flower
Hold infinity in the palms of your hand and eternity in an hour
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