The Download On Second Life's Meltdown

Initial adoptors extreme gullibility or greed,

Later adoptors generally on the apherent good reputation of the "Bank"

Additionally Many go on recomendations of other "Investors"



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Person A - Hey I have 20k Lindens sitting around I dont really want to cash out for USD, since Ill use them sometime. But they are just sitting here burning a hole in my pocket.

Person B - I know this great bank named Binko. They pay awesome interest , and since you dont cash out there are no taxes.

Person A- well if it works for you person B, it must be good.

Well I don't have a Bra to stuff it. Being in for a long time. GINKO was in since 2004. Everyone had them. They were the largest, Until Linden decided Casinos had to go. So Casinos stared pulling their money out and that started a run. With that said..Ginko in order to save their donkey decided to get WSE to hold about 149,000,000 in Bonds and list them at, let's say .18 on a dollar.

Now WSE has their own problems. Many of the companies they listed may have have cut and run. Their doing a complete exam of their operation now. They're telling everyone to be patient and trust.. hahah..those words were used by GINKO.. I presume that guy on Forbes had a few bucks tide up and now he's calling for a dooms day.

Could that of been the Bank I was talking about. If anyone doesn't think Casinos and Sex along with those stupid camping systems didn't have an effect on Second Life's economy is living in a cloud.

Regardless, the word of month whether it's based on facts or hear say will impact Second Life's future

I don't think anybody's denied the loss of gambling had an effect. I think most of us don't think it was an especially severe effect. The economy will adjust.

Ginko likewise ... a few people lost a lot of money, but most SL users lost little or nothing. I understand the anger of those who did lose, but that too is not going to cause any longterm damage.

Hmmm...that would be why no one I know used them.

Saying everyone uses a SL Bank is like saying everyone has cybersex, or gambles.

Head. Sand. Try pulling harder, not pushing.

Did the cashing out of the casinos hurt this bank? Oh yes.
Did this bank have a LOT of problems even before this event? Oh yes.



I do think the wagering ban will have an impact on SL life. And I agree, fact and runour will both play a part. However, what I think will happen is completley different from the doomsday sayers.

The most negative impact is that SL Banks will never again be trusted. *shrugs* The ease at which this last fall happened has shown (to me at least) that this venue is far too fragile within the SL economy. The felxible, ever-changing nature of the platform makes investments of such monetary nature instable by default. That's based on fact of history, as mentioned in the post above.

The other aspect (negative or positive depends on your point of view) is that cansinos are gone. They have left a niche to be filled. Both in land and in the economy. I personally do not feel this is that big an impact on the social dynamics of SL and is why I called the "reporter" from Forbes nothing but a "yellow journalist". He's simply making up his own facts, without proof, to make a sensationalist report.

I think this "reporter", and a lot of others, are wrong in saying the "majority" of SL did nothing but gamble (and of course cybersex). I actually feel the number of people gambling was a very minor percentage. Why? Because those who gamble professionally in RL will tell you flat out that the non-regulatory anture of gambling in SL is just a means to throw your money away. Casinos operated on the "honor system". A person had to trust them to play fair.

I may be cynical, but I don't trust human nature that much. Greed takes over too easily, or we'd not have the regs on gambling that we have in RL.

So, in my own persnal point of view, the only effect I see from the gambling ban is making SL better by reducing the number of camping spots and rediculously laggy builds that came with the average casino. That's blunt, and is not fair to those that ran casinos in a respectable mannor, but is my view overall.

As for the banks. For those that want to use such institutions, my best of luck. I will not. Not for what has happened recently with this "crash" but because I have always felt that investment was not stable enough. I warrent a good majority of SL share my views, but as I haven't asked, I can only guess. Though of the 200+ or so on my Friend's List, not a one is part of any SL Banking institution. Use that data as you will.

~Jessy

I don't disagree with you completely, but you seem to fail to notice afew very important things.

Let me first use USA's economy as an example:

Why was usa's GDP growth so massive over past couple of decades, because the main factor that drives GDP is FDI (Foreign Direct Investment, a high FDI adds capital to the nation, creates jobs and improves purchasing power) and that one was massive in USA. If a nation has a good economal atmosphere for investements then the FDI grows, and the economy as a whole benefits. Thats very roughly about that in RL...

In SL, why do people sign up for an account ? Mainly either because they wanna be entertained or entertain others. To entertain others requires a skill to fill a need in best possible way so the investment is profitable, otherwise it loses it's financial purpose. What gambling did to sl is what credit cards and banking did to USA, it functioned as a economical boost. We can agree or disagree if such boosts benefit the most, but overall they do create jobs and keep economy at a artificialy higher level. This natualy attracts new investors, because if you fail in sl's fashion biz, and fail in building biz you could always run a casino and either get back your initial investment or simply do that instead. This created a very nice rate-of-success-ratio and attracted many ppl from RL to try sl, something SL benefited from, i still remember RL articles back in November where opinion was "Virtual Real Estate Boom, or Booble?", it was infact both, because the growth outperformed failure. So without the "easy" business sector it's harder for noobs or those that consider trying investing in sl, this creates a economical recession. SL is nolonger as attractive investment as it used to be, i came over an sl news article where they claimed "the impact is not so bad" only about 10% of active accounts havent logged in, and directly thats a very good observation, but what they failed to look into is potential growth. We're used to a avg. growth of 10-15% a month (thats 120-180% a year, while economicaly it's 400%), when you have a negative growth of 10% that means a step back by 200% (and you can imagine the economical impact out of this and what it will do with mainland prices over the coming months), thats very roughly about SL economy. Another factor is Linden Lab's ability to manipulate land-auctions and L$ supply, they failed bigtime on this. They knew before July 28th they were gonna ban gambling and they do have the data who occupies alot of the land and as i mentioned above how much this impacts overall economy, still they didn't prepare land-auctions for the new economy, they pushed 16 sims a day as usual, currently they declined that to 10, but thats AFTER the fact and still way too much at most they should do 4 sims a day this is something they should have prepared for, it is absolutely no excuse they didnt know this, they did and they failed.

Something worth to keep in mind, the 1mill USD daily spendings that is gone with gambling
was NOT because of mainland unprofitable camp casinos, they had almost no revenues compared to private sims casinos that did not have camping at all.

The question remains, will the Linden Lab manage to create a new economy wich will again attract such investment rate as we were once used to, or will they fail ?

Personaly i would like to see games that are more creative than gambling, but with a physics engine that is anything else than realistic and with linden lab considering Sudoku a gambling device (yes iknow accourding to the blog sudoku is perfectly legal, but linden lab employees view it differently), it's hard to be optimistic.

Time frame as quote above "decades". The oldest SL bank has been around for what, 4 years? 5? From an economic standpoint that timeframe is inconcequential. The 5 year mark is about the absolute minimum and this is the point in SL at which it failed.



The "loss" if the 1 million USD spendings due to the wagering ban is mis-contrued data. People are seeing that and using that data incorrectly.

LL has not lost 1 million USD a day. The only loss has been of those running wagering buisnesses, and of those using such buisnesses. Granted, it seems a large part, but really is not.

LL remains stable. They are making a profit, and advancing.

If the economy was failing, as so many claim, the value of the L$ would drop like a rock. From what I see, it's holding stead at the small fluctuation of 265-270L$ per USD. Since I can remember the days of 800-1 ratio, the economy has a long way to go before it scares me.

The loss of the private sims over the ban will hardly be felt by SL. Why? Because the waiting period on getting a private island is serveral weeks long. LL can't keep up with all requests as they have to get the server hardware in place first. This will actually HELP LL as they can simply provide the now available island sims to those already on the list, and thereby lower the wait time.



Agreed. I'd lvoe to see an advance on the physics engine for such purposes. However, I'm content to wait for improvements. I'd personally like LL to stop ALL improvents that add content and simply do a massive bug/glitch fix. They'll never fix them all, but I'd like to see 90% of the JIRA go away before they add something new again. Knowing LL as I do, however, I won't hold my breath.

Blue isn't my color.

~Jessy