Enabling a larger volume of Currency Exchange

I'm glad to see that responses are being made. Sometimes I forget we on the east coast get up a little bit earlier:

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In addition to a discussion about enabling a large volume of currency exchange, I think a bigger question has been raised. How can the community and LL have better lines of communication open about new innovations and projects on both sides? Does anyone have ideas on how to accomplish enough of an open dialogue, while still allowing people to work on projects that may require some secrecy? It seems that many big projects are "damned if they do, damned if they don't", whether being done by Lindens or residents.

Its the big question I'm going to take away from all this, and do some serious thinking about. The group Anshe has formed is a fine start.

Regards,

-Flip

I have a suspicion that the reason it is desired to be easier to get more money to content creators easier that at present is that there is a hope that a shift in the type of content creator is hoped for. At present, there are many people creating content for sale who do it as a hobby, for fun, in their spare time after working a normal wage earner's job to pay their bills. There may be a desire to have big firms, established successful firms marketing things in other virtual economies already involved here, or to have branded items sold here produced by the brand owning company itself, or in some way to get an influx of new, high volume content creators involved in SL content creation and marketing. To get these large scale content producers interested in being involved might require a volume of purchases that makes going through third party sites, having to wait and having to evaluate the merits of different currency exchanges undesirable.

Actually I think it is the opposite, Suezanne:

If big companies were making and selling high dollar items in SL (and of course they aren't yet, at least that I am aware), I would be far less concerned:

- Big established companies could run sites where they collected payment directly from SL users with the expectation that the users either would already have an account with them or otherwise would be likely to trust them. So for example if Amazon sold books on SL this would be the case.

- If the average sale price of objects in SL were higher, new users would be more likely to be willing to visit and use a third party site to buy currency. For example if Nike was selling tennis shoes is SL for L$40,000/pair, then the 5 minutes it would take to create an account on the currency site would be more tolerable.

BUT, as it stands today, we have:

- thousands of smaller producers who should not be expected to create websites and somehow convince people to give them their credit cards, addresses, and emails.

- An average object selling price of around L$100 (less than 50 cents). So we need a mechanism that makes it likely that a person who is interested in a buying something that costs less than a dollar will actually buy it.

Philip,

So how do you feel about my previous suggestion of creating and opening up some type of merchant API? It would allow third party services to charge a users SL account directly with some type of authorization or initiation by the user. LL could take a percentage of every transaction for fees and/or profit. This would enable sites like GOM, IGE, etc. to not require users to submit their billing and credit card information to them.

1. There are thousands of people that make and sell left-handed back scratchers.
2. There are thousands of people that want to buy left-handed back scratchers.
3. Variety, price differences, location on the map, online status of the participants all vary.

So we end up with two needs:
A) Make it easy for buyers to find and pay for their ideal left-handed back scratchers.
B) Make it easy for sellers to list and collect payment for their left-handed back scratchers.

There exists no interface in-game to list your objects for sale to interested parties. There have been several 3rd party web sites that have taken up this lack and provide not only listing services, but the exchange transaction as well. By sorting like objects together, it promotes a balancing of worth though direct comparison. A web site that only dealt with left-handed back scratchers would have a strong effect on the going price for them and would be the main place people looking to buy left-handed back scratchers would go.

Now what if a new feature was added to the in-game interface that allowed sellers to list items for sale along with their price, AND added a "buy it now" button so buyers could quickly and easily get what they wanted. Impact: sales will increase because this is easier that hunting down mall locations and searching through the merchandise displayed, and mall density would start to drop as they are phased out by the better alternative. The external web sites that did the same thing now face utter abandonment as people use the new feature instead.

This stops the benefits those web site operators were gleaning from the lack in the game's design that has now been improved, but it helps everyone else: Both buyers and sellers would find the in-game system more convenient and easier to operate, and sellers will have a wider market for their goods since they will no longer be limited to just the buyers that go to the off-world site. 39,999 to 1. The needs of the many outweigh the needs of the few.

Well, that's all well and good, but MAN! ...It's CHANGE!!! Quake in your boots people.

BUT... The external sites' main function was to display information. If they could still display their information in-game, and in an improved format over that which the game provides, then their services are not completely extinct. But would the complexities of granting such abilities to the few make it worth the time and effort it would require? Would it impact negatively the end user's experience by adding complexity and noise? Would any advantage the sites get from such a concession soon be whittled away by others taking advantage of the same added-on features?



Hmmm... I could have saved some wordage if instead of typing "left-handed back scratcher" over and over I abbreviated it to, oh "L$" or something. After all, L$ isn't MONEY. That's official Linden Lab policy, that. L$ is just a special class of object that we can buy and sell for US$. Oh well... I'll leave it "left-handed back scratcher" for now.

Hmm, if everyone just searched for and bought stuff with a simple dialog, wouldnt the demand for land probably halve?

Would you be callin' that an exageration now?

Actually, the more I've been thinking about it (since I posted) I don't even think it will make much of a dent in mall proliferation. If such an item catalog was sorted by category, someone that buys a left-handed back scratcher from the left-handed back scratcher section might never know about the super-cool right-footed pole kicker the same person has created. Land, and malls, would still be a place to "see other items by this person: (landmark)".


But while I posted about left-handed back scratchers and (the real concept of) "find item" catalogs in-game, I really was shooting for the topic-at-hand of L$ exchanges... "find L$" instead. It amounts to the same hill of beans, however you count them.


I'm all for making SL better.

I'm not opposed to change. In fact I welcome most of the changes and all of the improvements I've seen in SL over the months.

I'm still unconvinced that there is a huge unsupplied demand for left handed backscratchers or L$ for that matter.

Also the external sites don't just provide information, they all provide a buy L$ for US$ service. If my site simply posted the exchange rates or the list of places to buy left handed back scratchers that would be one thing. Since the sites in question display information and provide a service, and currently there is no similar in-world function we're talking a big set of changes.

Improvement, possibly in viewed in isolation and there is a big enough actual potential market to require it. LL certainly can do this. The question for me and many others is more should they? Why of all the systems they could have chosen - including something far closer to your suggested providing a list and a buy it now in world option - do they appear to be countering their oft stated 'resident created content' and 'no interference unless you break the law' hands off style to apparently directly compete with resident created content.

A possible improvement to the nature of the world conflicting with an increased sense of unease in many of the major providers of content and time and good resident created things, is it really worth it?

But I don't want to pay in real money, I want to pay in L$ that has accumillated with my stipends, land traffic, things I've sold on SL.

Well, I'm still as confused in September 2005 as I was in October 2004

I'm sure that changes are great, and that adapting to change is the key for survival. I'm never against change. Even bad changes are better than no changes at all! (we can always learn from past mistakes)

I don't believe that LL is just doing this to spite GOM, but because they truly wish more people to have better access to money exchanges. But the truth is, in my year in Second Life, I never found a single resident complaining that it was too "difficult" to sell/buy at GOM, IGE or any other exchange. So, I think that the "better access" is simply a weak argument, and I'm not convinced with Philip's statistics.

Statistics are a problem. Take another example: if there are only 9,000 people owning land, but 43,000 residents, does that mean that a) land is too expensive; b) the land-buying tools are too complicated; c) there is not enough land being offered for sale; d) some people simply don't care/don't want to own land? How should these statistics be interpreted? You see what my point is. You can apply that type of reasoning to almost any statistics about Second Life you wish to bring up.

So, "ease of buying/selling L$" is a weak argument.

The second possibility is the "GOMgate case". LL wished to own GOM (or at least to control them), things didn't work out so well, and now they wish simply GOM to disappear. Well, while GOM is probably able to "fight back" with creativity and imagination - again, change is not bad, adapting to change is the key to success - there is no way you should endorse the "federal government of SL" to "take over" very successful private enterprises. But despite all the fuss, followed by a certain (very reasonable!) demand of not discussing this publicly, I'm still not convinced that this is the only reason.

I find it hard to believe that Linden Lab would do a 180º turn on its own policy to encourage so much user-created content and 3rd party applications. There simply aren't very strong reasons to change policy radically at this point in time. Even taking into account that 75% of the current population simply didn't exist last year - and over 90% didn't exist 2 years ago - it's hard for me to accept that LL would be willing to discard a significant part of LL's oldest supporters and betting that the "younger residents" would basically accept everything without questioning.

Philip is willing to discuss this important change in SL with us in a few hours. I'm very eager to see if we're going to hear the "real reason" - without backing it up with shaky statistics or any other "excuse". My guess is, we won't hear it today, but slowly learn to accept the "real reason" over the months to come, as LL deploys its new mechanism of buying/selling L$ in-world, testing it out successfully.

While I'm often very wrong on most economic assumptions about SL, all this sounds to me like a progressive maneuver to get rid of the L$. Consider the following scenario: SL simply becoming a 3D content & services marketplace, not unlike Renderosity's web site, where artists and creators offer their virtual designs for sale. With "real money", ie., US$ and not any sort of "fake currency".

If the L$ fluctuates wildly, and LL is unable to control it - from the point of view of a "central bank" - what is the quickest and most efficient way to get the economy back in place? Well, several 3rd world countries simply adopted the US dollar instead - making it the "real" currency for all purposes, since they couldn't reply upon their own state-issued currency. Remember the recent comments on "SL not being a game" any more. If it isn't a game, but a content marketplace, the "funny money" represented by the L$ is not so important to keep and maintain.

In October, Philip also announced that sooner or later the stipends would have to change - adjusted downwards, as it's one of the biggest sources of L$ right now. So, if you add all this together, what comes out as a result? For me, it's the end of the L$-based economy.

If you think a bit about it, the "US$-based economy" in SL never disappeared. New land is now auctioned in US$ (but you always had parcels on auctions for US$). LL has strongly encouraged residents to submit proposals for building amazing things. The announcements (or at least its clarifications) state that the bidders are able to get payments in either L$ or US$ - it's up for them to decide what they prefer. And even among residents, many businesses are transacted in US$ these days (think about land deeds in private islands!).

The L$ is slowly becoming more "cumbersome" every day. LL is proud to say how much "money" is in this virtual economy, and they're often quoted by the (RL) press. But they fail to explain that this would only be "real" money if you'd go through one of the exchanges and be able to exchange it all. So it's just "potential value". Nothing is wrong with that - after all, we all know that Bill Gates is the richest man in the world because of the value of Microsoft stock he owns - but he needs to sell it first to actually become the richest man in the world... so, even in RL, there is a "virtual economy", and this is what SL has been so far.

The next step, however, sounds much more promising and interesting. Get rid of the L$, make all transactions in US$. The biggest obstacle to overcome right now is anonymity - it's not 100% clear and easy to do that on PayPal (although not impossible). The new measures that LL is going to introduce will be able to deal with anonymity flawlessly. What they are enabling is a way to make anonymous payments in a transparent way - payments in US$, not "funny money".

Now imagine LL's economy linked to eBay and PayPal (we have heard for months how LL has been developing the integration with PayPal for monthly fees). You could have a "Linden account", absolutely anonymous, and log in to any service in the world that accepts either PayPal or a credit card, and make your payments from inside SL - safe and anonymously. The best part of it, for detecting fraud, LL would be able to reveal any real data - but for the rest of the transactions, you would be able to rely upon their discretion. With in-world HTML, you would even be able to browse in eBay and pay from your "Linden account" directly. What a wonderful idea! And at the end of the month, you'd be charged by Linden Lab accordingly, and LL would keep a small comission. All issues of negotiating rates and comissions would be handled between you and LL - no need to have more intermediaries. Imagine being able to get a "merchant account" at PayPal - through your account with Linden Lab!

The legal implications of this are a bit terrifying, but, if well handled, I think it could be done. After all, PayPal managed to do it, some years ago - becoming a "broker" of money-by-email, a new concept that worked amazingly well. Perhaps LL wants to become the virtual world's counterpoint to PayPal. Or even work with them together to implement such a system.

More important than that, the money transactions in SL would become real, and not only "potential". For some interested parties, who nowadays shun LL just because they are dealing with "funny money", they would certainly look at LL with other eyes. Yes, of course, Philip says that replacing GOM and earning just US$ 9K is not such a big incentive. But what about getting a share of all the daily transactions? SL's homepage lists US$40K being transacted today in-world. 5% of that (assuming you'd need to deal with the credit card commission charges) is US$ 2K. Per day. 9K may not be much, but 60K is starting to become an interesting revenue stream for LL - accounting perhaps for the lease of some 300 sims or so. Or paying for a dozen developers' salaries.

Is that LL's future plan? Perhaps, but more realistically, I just think that the first step is to make SL a sort of a "Renderosity clone" - a place where creative people are able to buy and sell services & content using US$ instead of "funny money". So, LL has tried to create and promote its own currency, but falls back to the old, trustworthy US dollar instead.

It's a big change, if that's actually what is going to happen (and it certainly won't happen overnight). As initially stated, I'm still confused about all of this, and I can only hope that Philip sheds some light on this at the Town Hall meeting...

As a Live Helper I see people always asking, "How do I get more money?" Once you tell them about selling things, the response from newer people is, "I have no building skills, I need money now (for land or whatever)". The next obvious thing is to explain about the 3rd party traders.

I am always hesitant about this because of percieved favoritism. Its not really my place to tell people what businesses to work with, especially with my Live Help hat on. Do I say go to GOM because of this or that or dont use IGE because of this or that? What about the vendors I dont mention? It is especially hard for me since I have no first hand experience with any third party trader and my opinions are based from what I have heard from others.

I dont mean to stereotype, but its tough enough to be new in SL. Try to remember back when you were new and how mind blowing it all was. It has to be discouraging to be new and not have any money and not even be sure of what your doing and then be told that you have to go and select a third party money vendor, get signed up, set up paypal accounts, etc. I think that possibly it is enough to just have the SL account go unused.

It would be very cool to be able to say, "Go to HELP at top and choose the "Buy L$" option."

Personally, I have never been real keen on making RL cash from my L$, but I think it is incredibly cool that we are able to do that here if we choose. It seems a logical step for the continued growth of SL to have an easy way to purchase L$ should the need arise.

I missed the meeting, and I’m late to the thread, but I’d like to put in my two Lindens' worth:

1. First, I endorse and commend LL and all the Lindens for being so accessible to the subscribers, holding meetings and listening to everyone, and being almost invariably pleasant and respectful in doing so.

2. I agree this new plan would make it easier for everyone (especially newbies) to buy money, and content creators (like myself) would probably make more money if Lindens were easier to come by, and increase impulse spending.

3. But the answer is not to get into the business yourself, with all the headaches it entails. If you must do something, just make it easier for us to access each and every business that wants to be in the money exchange business while we are in SL. (And even that isn’t fair, if you are using GOM’s uncompensated knowledge and experience to implement it.)

I understand the advantages to the one-click thing, but I would rather make less money as a content creator than see the people who have already worked so hard on this shunted to the side in the face of big guns competition (the Lindens), not to mention the troubling precedent this sets for all content innovators in the future.

4. I believe you are thinking of, and worried about, a slippery slope that doesn’t exist. With vehicles, for instance, new technology for new vehicles means something new for all vehicle makers. That is qualitatively different from you deciding to provide the only existent direct in-world means of buying vehicles.

There is a difference between providing tools for, say, clothing designers, and positioning yourself as the formal conduit for all clothing sales, with you taking a percentage of the earnings.

The money exchange service developed by GOM (and others) IS content, just as vehicles and clothes are. Thus, while giving new tools to everyone, or improving the technology for everyone is fine, doing something that effectively puts vehicle or clothing creators, or money exchangers, out of the business would not be.

6. The way this has been handled – and the implications it has for the future - suggest the motto should be: “Second Life - Our World, Your Labor.”

7. What’s next? I happen to like dealing with SLExchange. I will probably like dealing with SLBoutique as well. Must I deal with Lindens directly through the game for everything? How about all the rental market? Should I have to pay the Lindens for renting my land, rather than paying Adam through Second Server?

I like the variety offered by all these separate programs, and developed by all these enterprising people. Are you going to make it lots easier to do those things, too, by offering to do it directly? Your competition is way too much for anyone else to bear, and they will all die as a result.

8. Moving on to other future implications, I’ve asked questions about the Developers Directory on the Hotline and received no answers.

It looks to me like in the wake of this shocking GOM development, some content creators are now jockeying for position to be among a select group of “approved developers” for getting future jobs and privileges, including the privilege to be in the know about what LL plans to do next. Even to the point of agreeing among themselves that of course LL can, will and should co-opt whatever it likes, as long as they can be official “partners” and official “developers.” (See other threads for indications of this.)

I’d like to take this opportunity to ask that if, in their minds, and perhaps yours, there are only two groups which count in SL - (1) the Lindens and (2) their hand-picked “developers" - then what are the rest of us doing here?

9. In my view, anything and everything should be open to all. This includes Developer Directories; which subscribers you approach to discuss this money exchange matter with (rather than just picking one – GOM – and leaving the others out); who gets featured on the web site and web pages; which subscribers will be blessed with a Linden appearing at their event or on their advertisements; and every other possible advantage or opportunity.

All opportunities should always be open to all, via a bidding process, by application, through a contest or even random drawing, and be proceeded by public announcements of each.

coco

Yeesh. Lots people upset because GOM's market conditions might change. That's life. As a commercial software developer, I've had 4 separate nice-selling products get obsoleted by Microsoft and Apple. Life goes on, find another niche. Ansche's business sense sure seems a lot sharper than GOM's.

Just as a data point--I'm quite willing to buy currency through the client (don't even ask me how many ThereBucks I bought during its heyday). I've never used GOM. Why? If I'm shopping and see something I want to buy (or land, or whatever), I wan instant gratification. I don't want to leave SL, go pull up a website, create an account, give them my credit card info, etc., etc. I want a "buy L$" menu item, or I won't bother.


Arashiko

Well, if you don't want to have some kind of percieved favoritism towards a particular 3rd party or such. I suppose you could just give them the official help link todo with buying/selling L$ on Secondlife:

http://secondlife.com/app/currency/

You're all missing the point.

Philip is spouting a red herring here. He's quoting some reason for screwing GOM which has nothing to do with the what's killing GOM.

Letting users BUY currency isn't what's killing GOM.

In fact, that would probably HELP GOM's business.

It's letting users SELL currency which is killing GOM.

It was necessary to help people buy currency.

It wasn't necessary to help them sell currency!

Unfortunately, Philip has.

This shows an ultimate disrespect for the developers of SecondLife. And therefore a disrespect for all of us.

I was all for this when I thought it was necessary for the community, but facilitating the selling of currency does not help the community and potentially harms the economy.


How does facilitating user selling of L$ harm the economy?

It makes it easy for people to sell L$ and therefore withdraw USD / VALUE from the L$.

By having to go through a middleman like GOM, there would have been more traction and USD would have been left IN the economy longer and it would have propped up the L$.

Quick! Better start another thread about it then!

I agree with this.

I have to say I disagree on this point. If the L$ exchange continues to fall, its not because the system to trade has been made easier, its because of much larger factors like too much L$ in the system or lack of confidence in SL. Granted complex trading system brings traction, but I think such traction should be removed to allow the L$ to float at its nominal level rather then set artificially.

For example GOM's change to Partial Fills did not cause the decline in the L$. It removed traction certainly, but the L$ was already declining long before Partial Fills was put in place.

A free market and an open economy includes everybody, not just a select few who maintain some kind of artificial price because of restrictions in place. Everybody should have the opportunity to sell their L$ because it encourages more competition and fairness.

And its a possibility that increasing the ease at which buyers can buy L$ may even bring about some stability to the exchange rate.

Actually, a possibility that Philip might be hiding close to his chest is volume discounts.

He may give volume discounts to sellers who sell LOTS of L$. Therefore, GOM could compete by aggregating other sellers and leveraging their 'tier'.

Hmmmm! Hadn't thought of that one.

In the end though, the volume discounts would have to be great enough to convince people to go elsewhere to sell their L$.

You know, if you're thinking of these things, I think you could come out and tell us rather than forcing us to run around like rats in a maze.

Another bone, he might be able to throw, is no paypal payment ability. That would entice people to go to GOM. After all, who wants to wait for a cheque!

I think SL being successful is important to all residents, not just LL. I think this currency exchange being integrated will improve growth and stimulate trading. Both things being important to make SL successful as a virtual world. The type of businesses that will be hurt by LL changes of any kind are the businesses that rely on a lack of functionality to profit. Would you rather have SL never gain functionality just so some companies can make money until SL becomes obsolete and worthless leaving everyone with a bunch of worthless currency? Wouldn't it be better if SL continues to improve for years to come allowing a better virtual world to evolve that keeps its value? $L only has value if the game is worth anything. Without adaptation, SL some day will be left in the dust. Things like this aren't just about whether Linden should make money or GOM should make money. They are about whether SL will grow and be around next year, or stagnate and be outclassed by someone else next year. If SL fails and dissappears, everything you have in SL just dissappears.

That said, the real question is do you think LL integrating currency exchange will help SL succeed or fail. In my opinion it will help SL as a whole succeed, so I back it.

Yeah, but SL will become a pretty empty place if no wants to make anything significant for it because they know that Philip doesn't intend on working with them if they do.

I dont think a dozen people in the forums throwing tantrums is going to leave SL empty and devoid of content. Not least because 95% of SL are blissfully unaware of any of this. And probably wouldn't care one way or the other anyway.

Not that I believe for a moment that said tantrum throwers will stop producing content or shovelling money at LL by way of protest.

Basic economics guys. You can't control inflation and the currency supply in an open system. Until you stop the trading on GOM and other sites, you can't regulate inflation or the money supply. All you're doing is making the game more playable for the people with real world $ and screwing everyone else.

If you want to regulate the economy, then start doing some price controls. Otherwise, shut up about it, and stop lowering bonuses and stipends.

Chrystin

OFFER GOM a FAIR SETTLEMENT. That's basiclly all I have to say. I dont even use them (hi IGE) but it seems you are ripping off their model. So no justifying will make it right. Go back to the table and make them a fair offer. Then close the books and get back to fixing problems in SL.....LIKE mass object returns, where over 50% of the objects vanish from your inventory/world.

-Tony H.

Hi,

I'd just like to make a point from the perspective of a new user (I joined a few days ago and this is my first post so please be gentle hehe). I was pretty shocked to discover there was no way of getting money into the game except dealing with third parties.

With respect, I have no idea who these people are, except for the ones who seem to have been involved in undermining the economies of other games I play.

Ok, I realise that the SL economy is a different proposition and what I just said doesn't apply to all the services that exist but I have no wish to give money a.) to people I don't know b.) to people who are making WoW less fun to play and c.) another bunch of people outside the reach of EU privacy, banking and data protection laws.

So please, put this simple currency exchange in place as soon as possible as I believe there's currently a significant early barrier to new people getting involved in the game.

Ame