LL contradiction

Anyone notice this glaring contridiction between Linden Lab's Terms of Service and Linden Lab's practice?:

Second Life ToS: 1.4 Second Life "currency" is a limited license right available for purchase or free distribution at Linden Lab's discretion, and is not redeemable for monetary value from Linden Lab.

You acknowledge that the Service presently includes a component of in-world fictional currency ("Currency" or "Linden Dollars" or "L$", which constitutes a limited license right to use a feature of our product when, as, and if allowed by Linden Lab. Linden Lab may charge fees for the right to use Linden Dollars, or may distribute Linden Dollars without charge, in its sole discretion. Regardless of terminology used, Linden Dollars represent a limited license right governed solely under the terms of this Agreement, and are not redeemable for any sum of money or monetary value from Linden Lab at any time. You agree that Linden Lab has the absolute right to manage, regulate, control, modify and/or eliminate such Currency as it sees fit in its sole discretion, in any general or specific case, and that Linden Lab will have no liability to you based on its exercise of such right.

Yet LL does redeem their linden dollars for real money.

It seems Linden Labs needs to ether rewrite their ToS, or stop exchanging linden dollars into real currancy and depositing that real currency into users bank accounts.

Yup it's all confusing, maybe they need to allow us to pay our membership and tier fees by Lindens instead of US Dollars.

Acutally, apart from what "Supply Linden" sells, everything else is resident to resident, with LL taking their cut for providing the facility.

Broccoli

Well until last year they only facilitated the transactions. They implemented a currency exchange, the Lindex, which linked buyers up with sellers. So I guess the ToS was sound until then. Things changed when Supply Linden came on the scene though.

That's about 10 miles beside the point. The point is that LL's terms of service state that linden dollars are not redeemable for any monitary value and yet Linden Labs does in fact redeem their linden dollars for real money.



(Thought I made that point the first time around.)

"From Linden Lab" is key in that sentence.

If tomorrow LL announces that it's going bankrupt, you can have L$1 million but there won't be anyone who's willing to buy them from you, nor can you go to LL and claim that they owe you any money for the amount you have.

Supply Linden sells L$ to residents, that doesn't contradict the TOS because they're not selling L$ to themselves, nor does LL ever accept any kind of payment in L$.

now if they would just fix the paypal issue wich has been going of for waht, 4 months? as a friend wants to pay his tier to me and subscription he has and had to borrow money from me to do so while waiting for an unannounced 24h notice with the SLE till after making a deposit?

thnk they want to get rid of paypal and have land owners do that pain in the ass accounting with their residents instead...

they do let you do that.....

Paypal is an interesting one though, they banned a lot of sex site operators from using paypal.

??? How? I have to sell my Lindens for US dollars. Then my account has US dollars sitting in there which LL take out when my tier is due.

No, they don't.

For Linden Labs to redeem linden dollars, it would mean you go to them with your lindens, and they take money out of one of their own accounts to pay you with US dollars. That's not what they do.

What they do is to run an exchange, similar but not identical to the way stock exchanges work. People who want to sell lindens submit bids. People who want to buy lindens submit bids. Linden matches them up and processes the transaction. They do the bookkeeping, they calculate a current market rate for those wishing to buy or sell at market rates, and they take a cut. They take the US dollars from cash accounts owned by the appropriate resident and maintained by Linden to give to those selling the linden dollars. Keep in mind that although they have custody of your US cash account balance, they don't own it free and clear.

I'm not talking about buying and selling linden dollars, I'm talking about taking the linden dollars out of your SL account and exchanging them into real money that can be deposited into your bank account.

That's still placing a monitary value on linden dollars.

No, it's not. It's us who place a monetary value on Linden dollars. LL just fascilitates the buying and selling of L$ between residents. We place a monetary value on it, not them.

If that were true then surely gambling wouldn't be being banned.

LL do accept L$ as payment for uploads

I agree that it's a sketchy argument and at this point we don't know if it would hold up to serious legal challege. My guess is that the gambling ban is partly a preemptive measure to eliminate some possibility of that premise being tested in court. if the L$ is ever declared to have a genuine monetary value beyond what residents place on it then we can kiss SL goodbye. I don't think LL could survive the liability that would create.

So what's your point? They don't say that there is no monetary value on lindens, nor that they won't caluclate one, only that they won't redeem them for any such value.

This is what concerns me now. The tax man is hovering over money that stays in world (it's different if you process your credit, then you do have real money).

this is like claiming amex dont actually trade aud for usd at the airport; they just facilitate the transaction between customers...
its disingenuous at best.

Yep, I completely agree. Personally I think the same argument should hold up in the real world and that only currency transactions should be taxable, not barter. I don't think the government has any right to take a piece of barter. The chances of the government ever agreeing with me on that is exactly nil.

Upload fees, classified fees, group creation fees, in-world land sales, etc all act as a black hole sink. When you pay L$10 to upload a texture those L$ simply cease to exist so it's not exactly a payment.

Then what is the point of taking it?

As long as there is growth, sinks aren't strictly necessary since LL prints more new L$ than it destroys every month.

If growth leveled out, or even declined, you'd get the same or less demand for L$ but stipends would still introduce a large amount of L$ into the economy, further reducing the need for L$ and possibly devaluating the L$ a few points at a time. In this case sinks would help balance things out since LL can't buy L$ back (that would be redeeming) to reduce the supply and keep the exchange rate stable.

Or that's how I understand the whole thing anyway .

In practice sinks are more of a deterrent than anything else, the economic benefit is probably just a nice side-effect. Charging L$10/upload keeps people from uploading thousands of textures.

(You can see the sink/sources table at the bottom of http://secondlife.com/whatis/economy_stats.php)