Money Sinks

Hello,

I am new to SL, a few days old. I was reading a bit about the economy in the forum here and i was curious to where the money sinks are in this game? so far i have not seen anything that I can spend a Linden dollar on.

To clarify, if i purchase something from another player, in terms of the conomy, i am not "spending" a linden dollar, i am transferring it.

The total SUM(Linden Dollars) in the economy continues to grow in this case, and inflation continues to rise.

Is this really the case?

-Navicerts

The money sinks are things like upload fees paid for snapshots and other files, as well as ratings. Those lindens go back to Linden Labs and not othe rplayers.

Ahh, i have not uploaded any new textures or anything yet, i see now. Thank You.

no problem

the cost is actually negligable, its the sheer number of uploads that make it a good money sink

10L to take a snapshot and upload it as a texture (free to save it to your pc)

Ratings, Uploads, Snapshots, Listing in Find, Listing in Classifieds..

forgot the listings! I need to use those soon..

And we all forgot land? First Land and some auctions are money sinks.

Yup.. And..

Dear, if you buy a tattoo from someone, you have _spent_ the Lindens you "transferred" to the guy who sold it to you.

I don't know where you people are coming up with these idiotic terms: WTF is a "sink"?
DEFINE IT!!!

Is a money tree a sink? Is a tattoo parlor a sink? Is a clothing store a sink? Is the guy next door who's selling his First Land a sink?

What makes a sink a "sink"? As opposed to a "source"?

Money sink - A fee paid to no one or a fee that is collected by no one making the Lindens spent on it no longer available for trading.

Or Money sink - Lindens dumped into a sink and washed away with soap and water

Err ok... a sink...
Any payment made to LL in $L acts as a sink. Texture, sound and anim uploading, find listings, classifieds, first land purchases, the charge for forming a group etc...
The $L leave the economy, unlike a payment to another resident.
So no money trees etc aren't a sink... a sink kinda is opposite to a source, it's money you (the resident) are paying out, not money coming in.
Did you not read the posts above where it was defined?

You need to read your signature again:


Anyway, people may be cavalier with the use of the term because it's a pretty common term used in reference to MMO style games.

Money 'flowing into' the SL economy (thereby increasing the overall L$'s in the game, that is, the total of L$'s all users own) is coming from a 'source'.

Money 'flowing out' of the SL economy is leaving it through a sink (and it's decreasing the overall L$'s in the game).

If I give you some L$'s (gift or buy something from you), the overall L$'s in the game don't change, just the distribution of it.

Think of a bathtub: you have a source of water (faucet), and a sink. If you open the sink, but make sure the same amount of water comes in from the source, the water level will stay the same. If more water comes in from the source, the water level will rise. If less water comes in than goes out through the sink, the water level will go down.

By your definition, there is no such thing as a money sink.

Money paid to somewhere/someone/something has to be collected...

Money paid to the Lindens goes into the game/world or to LL costs. That's not a sink.

Money that is paid to someone who takes it out of SL, such as those tourist morons who have Premium accounts and cash in their $500L every month at Lindex for USD -- that's a sink, because those Lindens are _NOT_ being used in-world.

Anything that keeps Lindens IN CIRCULATION IN-WORLD is, by definition, NOT a "money sink".

You have this exactly backwards. When someone sells L$500, it goes to a buyer. It's still in circulation. This is not a sink, but a seller -> buyer transaction. When someone uses one of the services that spend money into nowhere (upload fees, classified ads etc) that money is destroyed rather than being resold to a buyer. This is what's known as a "sink". When LL prints up new stipends, this is what's known as a "source", where new money is created out of nowhere.

The basic ideal of the current LL ecnomic strategy seems to be that sinks + economic growth = sources. This has clearly been failing, however.

Sometimes I wonder if this is because LL over-predicts economic growth. Maybe they wear some rather rosey-coloured glasses when they do their sums. I wonder how honest they are to themselves about member-retention. Maybe they're scaling the economy for what they wish it was, not what it is.

By definition...but only because you used the word "to". Some money, however isn't paid to anyone. The L$10 spent to pay for a texture upload, for example, simply vanishes. It doesn't go to anyone else's account, not even to one of the Linden characters or to the Lab itself.

Thus, it's a sink. Money is destroyed.


Actually (and someone please check me on this), the Lindex keeps a depository of $L cashed out. And when someone else buys $L for $US, it comes from that pool. In theory, the way things currently stand, if players stopped selling back $L for real money, the pool would eventually run dry and players would no longer be able to buy $L.

Thus, it's not a sink. The $L are not destroyed, but kept around in the one big pool that the Lindex has to work with.

The odds of the Lindex actually running dry, however, are virtually zero, and as long as more $L go into it, overall, than come out, mathematically there is no difference between treating the Lindex as both a source and a sink and treating it as neither.