Linden Lab thinking about printing money and selling it...

heh.

This announcement comes as a huge disappointment to me. I don't see this as just a bad economic move (which it clearly is), but rather, a sea change in the philosophy and vision of Linden Lab. Perhaps recent capital infusions have come with strings attached.

After listening to last month's town hall podcast, I was clearly under the impression that Philip was looking for ways to reduce the amount of new money being added to the economy (i.e. the reduction or elimination of stipends and traffic payments). The ablity for LL to print and sell money as it sees fit, while a power that may only be used for good purposes, deals a huge blow to the way that many of us see this economy. Perception is reality if content creators become nervous about SL as a place to make a living.

If such a change was necessary to the TOS, if only to allow some additional controls for LL, then perhaps they should have established some reasonable limits for the circumstances under which this power might be used, and the extent to which it might be used. As it stands now, it's a ball game without adequate rules.

That is exactly how I see this as well.

The timing for this announcement is rather odd, to say the least.

I could understand an announcement of this nature if the exchange rate was $L200/$1, but with the devaluation of the linden being what it has been since the inception of the LindeX, for the life of me, I can not understand this announcement.

Admittedly, I am one of the biggest LL cheerleaders on these forums, but I am having a very hard time concealing my dissapointment with this announcement.

How can an entitity that can create funny money out of the blue, be also allowed to sell it for real USD, and not be held accountable whenever the LindeX takes a dive?

SMDH

And so, without regard to the true intentions of LL, whatever they may be, very real damage to SL has been done here. I do hope they are listening.

Well said.

I asked awhile back if Linden Labs was badly managed or if we simply had no clue what their goals were. This change brings that question up for me again.

This makes me glad that we invested no USD to purchase our island sim. That way I won't have lost $$ if SL goes belly up over this.

If LL devaluates the $L sufficiently with this move, we will however stop paying them the $195/mo to support that sim as it all comes out of our business $L. I'm not going to support that out of my RL resources, even though I could.

I agree. I hope they clarify their plans very soon, until they do, it's going to create a lot of uncertainty and concern. It's hard not to worry that we're all about to get GOM'ed.

I have read most of the posts here .. and I am interested to see what the exchange rate that Linden will be creating for the "fresh crisp hot off the presses" play money.

There is something else i didnt see mentioned as a counter point to the entirely USD micropayment system. Aside from breakin everysingle llMoney script in existence. Is that if we could ONLY pay in USD then all US laws would apply including gambling and sales tax(in some states). There is a law in congress now gettin ready to put an end to online gambling for RL dollars so in essence for those of us who play these types of games in hopes of hitting the jackpot or run them in hopes to pull a lil bit of rake would no longer be able to do so w/o fear of the Gambling commision coming down on us. leaving L$ intact leaves a shelter for a number of things to continue in SL that the USD would not allow.


Just my thoughts
O

I don't know if LL is going belly up over this. But I do know that this is going to do is sap a lot of the energy and passion that so many of us feel about SL. And when you alienate the residents who are most heavily invested here (intellectually, creatively, socially, emotionally and yes, economically) you certainly do change the momentum. Let's just say there is a little less wind in my sails today.

As much as I dislike the capitalist nature that permeates through much of SL, I am not convinced that this is a smart move on LL's part.

Lewis

I don't think that LL will go belly up either. I'm sure the sale of L$ will be a great new revenue stream for them, until nobody wants to buy it anymore. It is resident business that will go belly up, trying to compete with LL on the L$ market so we can sell enough L$ to give all the proceeds to LL to cover our tier.

Today the wind is totally gone from my sails, though. It never ceases to amaze me how LL can totally revive my faith in them, and subsequently wreck it again, within a span of 2-3 weeks. I do hold out some hope, though, that enough people will email [email]philip@lindenlab.com[/email] and JUST SAY NO to competing with Linden Lab for currency sales any more than we already do. Perhaps if enough of us are willing to say no, he will hear us.

I wouldn't go that far - just that I've been here since she started and would trust her as far as I would spit a dead rat.

Which isn't very far seeing how it wouldn't go near my mouth in the first place.

To be frank - I've seen crack addicts on the Las Vegas strip I'd trust with my wallet first, and the line they walk is probably straighter too.

This allows LL a tighter control over the money supply. They keep the $L, both for philosophic soveriegnty reasons ("it's a country" and the pragmatic reasons of not having to deal with RL regulatory issues. Think of it as a closed FDIC run by a benevolent dictator.

They will probably manipulate the market to adjust the L$ to 250$L/USD. Will they manipulate it to maximize LL profit? Yes, of course. Remember though that LL is not pubilcally traded and so there are no shareholders to please.

They will manipulate it to maximize LL profit. They have an economist on staff. They understand that if they do anything short-sighted in this regard, the long term effect is bad for the SL economy which is bad for LL's revenue stream. I think we all agree that a vibrant SL economy benefits LL.

Do you think the sky will fall? If it starts to fall, I'm sure they'll roll back to "the good old days". I think this is Vadnusha's solution to the fall $L problem. And I think it's a good one.

This move by LL would also explain why development of new features for the Lindex had come screeching to a halt. Buy orders? Partial fills? And the list goes on. Methinks the programmers from the Lindex have been shifted to the new L$ printing machine.

Pham is right, this is no different than the FED controlling the USD money supply, a bank intervening to suport their currency, etc..

I'm entertained by the mass freak-out, because nobody seems to realize that this is done, on a larger basis, with the USD and other currencies every day.

I don't get how its perceived as 'competing' with people to sell L$. It isn't the same thing - its an adjustment to the overall pool of L$ being circulated, not bids and offers on the Lindex order book.

First everyone was crying about the L$ losing value, now the mechanism to govern that is bad too?

I give up on you people, honestly.

Maxx, I guess the following scenario worries some people. LL decide that they need to allow currency purchases to add more currency to the market, so they let people buy them direct. Those people then don't buy from the LindeX for the period that they can buy direct. Badda-bing. Content creators suffer because people are buying L$ from LL and not from them. Unless LL sell that at a ridiculously costly rate, but then that would kind of defeat the object of getting more cash into the system.

At least, that's what I think some people are worried about.

On the subject at hand isn't this something that LL said they would NEVER do when starting the Lindex...

..... then again I also remember the CEO saying words to the effect that they would never get into the money exchange biz either...

...oh and that thing about IP rights to our creations (personal axe grind there)

... I know that at some point they may HAVE to have provision to put money INTO the economy - but I honestly can't blame folks for seeing this as GOMing the entire population and shoving 3 more fingers into the honey pot.

I am sorry to hear that ... and this is exactly what concerns me. You see, I am sitting here at work and on my desk is a recent issue of Business Week open to page 74 where you are featured so prominently. I bought three copies of this magazine to show friends and family just what is so exciting about SL. Perhaps I will just slide it back into the drawer of my desk.

Well I be blowed Lewis.

Never thought I would wind up agreeing with you on economic theory here -

Maxx, you don't see a problem with Linden Labs creating their own money and selling it to users and the LindeX existing at the same time?

Who makes the decision where a new user's currency purchase comes from? The user? A digital flip of the coin? No, Linden Lab will decide. The user will click on that little L$ in the client and be asked how much they want to buy and the purchase will be completed.

The two CANNOT exist together. You cannot have a company-run currency exchange if the same company also is running a pay-to-print L$ stamping machine with all proceeds going to the company.

People quit comparing this to the US economy and other countries. Yes, those countries print their own money. But they do not sell $50 for $60 and pocket the $10.

I support Linden Lab reserving the right to do this, but I would like them to provide a concrete set of rules regarding when they would do this, that would be presented to the community before any such change to their policy occurs.

I can see how LL, removing dwell bonuses, may want to reserve this right so that they can act in an emergency, however, I think we deserve to know specifics on what LL considers an emergency.

I'm willing to listen Pham. (and Maxx).

Please explain to me how it is a good thing to have the only entity who can print the worlds money out of thin air, be able to sell it at will, whenever they feel like it?

At this point, I could understand it if they had stated they were intending to BUY linden, but to make an announcement that they were now considering selling linden is rather odd.

At this point in time we need more buyers of linden, not sellers of linden.

I think this is a dangerous precedent.



If we are running low on $L in circulation, or their value is too high, why not get rid of the $L sinks first?

Or increase the stipend?

Or make a statement that all of these things will be done first?



My biggest difficulty with all of this, is that just a few (or only one?) person will be directly tinkering with the air that all of our in-world companies breathe.

It takes being wrong in a serious way only once to wipe us all out.


And who has ever been right about every single decision for years on end?

I don't see any one person or even a committee being smart enough to always forsee a run on the bank, or a market collapse. Not in first life, not here.

Yes, touching the economy indirectly is clumsy and slow. But it allows market forces to do what they need to do.

Maxx, I am interested in your thoughts on this. How does printing money help govern the dropping value of the L$? I understand the potential value to a control like this. What concerns me is the open-ended way it has been thrust upon the community without adequate limits.

Ok, so if I understand what you posted there - the concern is with players who run intermediate L$ operations then? (And somehow getting fees in the process, but don't they already charge commissions on Lindex trades?)

Not too sure what you mean by content creators suffering, either they buy L$ from Lindex or don't. If the exchange rate stabilizes, that is a good thing as well, eh?

Just sounds like the currency exchanges are the ones who will have to compete, not every content creator in Secondlife.

Please clarify if I haven't captured the essence of your post.