The Second Life Economy

The question often comes up, just who is the Alan Greenspan of Second Life? Who pulls the levers and otherwise steers the fate of the Second Life economy? Incorporating a dynamic mixture of Linden Dollars (L$), land sales, commercial transactions and intellectual property, the economy is in fact managed by a number of people at Linden Lab. Despite being one of the central features of the virtual world, I still think there is a general haziness around conceptually what these tools represent. Today I’ll try to answer some of the more common questions:

Just what is the Linden Dollar (L$)?Linden Lab implemented the L$ to facilitate the exchange of digital property. In July there were approximately 12.5 million transactions, averaging less than a few dollars each. Simply put, the L$ represents a limited license right to use certain features of the Second Life service – to participate in the virtual economy. It is a virtual medium of exchange that has real-world value associated with its ability to be traded with others, for real-world currency. While Linden Lab does not guarantee a demand for the L$ or that residents will be able to trade at a consistent rate, a healthy Linden Dollar economy is critical to the health of our service and as such Linden Lab has a strong business interest in maintaining the stability of the L$.

Given real world economies have seen currency collapses and hyperinflation, what’s to stop that happening in a virtual one? The Second Life virtual economy is much more akin to a completely paper- currency (cash) based economy where the total value of all currency can be ascertained simply by adding up the sum of L$ in all active accounts. Linden Lab increases the supply of L$ in-world in two ways: (1) as a part of the premium subscription stipends that it…

distributes each week, and (2) by selling L$ directly on the exchange. Linden Lab reduces the supply of Linden dollars in-world by accepting L$ for certain in-world system events such as uploading an image or posting a classified advertisement. These are known as sinks. The various Sinks and Sources and their amounts can be seen here. Given the expanding population and popularity of Second Life, expanding the money supply has to date been the most frequently used tool in our toolkit. As population growth stabilizes, the use and development of Linden Dollar sinks will become more prominent.

Would these sinks be sufficient to adequately re-adjust the money supply? Currently there is approximately L$2.6 billion in world held by 1.7 million accounts. The average held in each account is L$1,687 and the median is L$161. In an average month, more than 75% of the in-world money supply moves through the LindeX. Each month our sinks represent about 3% of the money supply, stipends represent 7% of the supply, and our L$ sales on the LindeX represent from 0 to 5% of the supply.Although we currently do not accept L$ in lieu of land sale and maintenance fee payments, we could. Acceptance by Linden Lab of just one month of land sale and maintenance fees in L$ denominated payments could cut the in-world money supply by more than 50%. In general, its our goal to maintain large enough sinks such that the only day to day and minute to minute mechanism that we need to manage the exchange rate within a narrow band is to sell L$ on the exchange. Since August of 2006 this has kept the exchange rate quite stable as you can see here.

Why haven’t you put in place any regulations for “virtual” banking institutions in-world? Are there plans to regulate? It is important here to distinguish between real-world banks and the “virtual banking” services that some people are trying to develop in Second Life. From a simple perspective, banks exist in the real world so you have a place more convenient than your mattress in which to store your cash. Banks in the real world attract capital by offering to pay an interest rate. They then turn around and try to lend that capital to worthy borrowers earning money on the spread between the interest they pay and the interest they earn. Because Linden Lab holds everyone’s L$ as a database entry in each account, virtual banks don’t offer a superior “storage” alternative.

Probably the most important point is that real-world banks are regulated by real-world laws. Linden Lab does not intend to recreate or subvert real-world laws in any way.We are not aware of any institutions in Second Life that are insured by the Federal Deposit Insurance Corporation or similar governmental agencies in other countries. We caution our residents to be wary of anyone offering extremely high interest rates at no risk, either in the real world or in Second Life — if it sounds too good to be true, it probably is.

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134 Responses to The Second Life Economy

  1. Lister Ng says:

    “if it sounds too good to be true, it probably is.”

    very well said

  2. Misfit March says:

    so what Linden is saying that L$ is a currency Equall to RL currency but electronically and as Such is a Commodity?
    So if somebody Commits Fraud say and rips off alot of good people that is equiverlent to RL Fraud?

  3. notagambler says:

    Linden Lab does not intend to recreate or subvert real-world laws in any way.

    No, they only steal ur money from ur account without telling u why.

    they dont proof from what they doing it, so LL are thiefs

    they should play alone in their garage until land is that cheap, they cannot pay their servers.

    when childs play company…..

  4. Scott Deharo says:

    Thanks for lettings us know

  5. DaQueenB Houston says:

    If you are prohibiting the use of Games of Chance due to Real Life required gaming license etc, why not prohibit the use of InWorld Banking?..After all these banks are not FDIC insured and i’m sure they have the capability to up and leave game with Numerous Residents accts/linden funds?
    Seems that we residents are investing into the game at a very COSTLY price and being left to the wolves now to fend for ourselves. After all it is the RESIDENTS that keep the game up and running outside of the technical expertises of LL employees.
    If your gonna be fair in this, you should do so by aquiring the necessary license to keep inworld gaming flowing. OR comply with the IRS rules needed as well to keep this. There are many of us that wouldnt mind the cost of these thing being implemented and passed down to ourselves if it means keeping Games of Chance allowable in game. There are enough residents to where this wouldnt or “Shouldnt” affect each of us greatly on our monthly tier fees.

    Jack…I luv ya dude but seriously?…..I see some of the changes that are now coming into play a grave and dismall future for SL. Huggggs!

  6. Aodhan McDunnough says:


    Mind stating what kind of theft they did? I keep very tight record of all my SL transactions and every cent (real and virtual) is accounted for.

  7. Pingback: La economía de Second Life - Blog de Pablo Mancini

  8. Phil Deakins says:


    And then there is the vast majority of us who *would* mind the license costs being passed down to us.

  9. Tony says:

    Just ban the banks inworld, make it against the TOS. You can do it. Personally I think it’s crazy to invest in a bank here but as many people have been taken in and lost a hell of a lot of income (which ironically would have greatly aided the economy) then simply outlaw banking.

  10. “Probably the most important point is that real-world banks are regulated by real-world laws. Linden Lab does not intend to recreate or subvert real-world laws in any way.”

    This is key, but it misses. These *are* “real world banks” and Linden Lab is right, they *are* governed by “real world laws.” So when those laws are apparently being broken (e.g. “if it sounds too good to be true, it probably is”) why wouldn’t Linden Lab step in and preserve remaining assets for depositors, etc. rather than let it perpetuate? Linden Lab does with land scams, theft of Lindens via password abuse, etc. This is just a little more complex. It’s just as wrong, and just as — apparently — illegal. (For those unfamiliar, this is discussed at length, re: Ginko Financial’s collapse, here:

  11. Broccoli Curry says:

    Is it coincidental that this post, referencing “in world banks” comes right after the Ginko collapse? I think not.


  12. Madelena Rossini says:

    Basically this is a very creative way of conforming to legal counsel’s requirements that you disassociate yourselves from any virtual financial institutions within the SL grid. I appreciate the economic outline but I do think that outside forces have compromised the LL vision of freedom of creativity and innovation. As soon as you limit creativity in any way, and that applies to gambling, you seek to legislate morality. This stumps growth. LL is basically caught between a rock and a hard place as countries and government agencies continue to increase the pressure to conform to their standards. I rather think that the dream in the long run will die, the experiment will fail, and us ‘lab rats’ will be transported to an alternative facility.

  13. Apollo Case says:

    There is a question then, “What is a virtual bank?”

    Traditional banks will usually accept deposits and then lend that money to borrowers they screen, with some kind of security. i.e. if a borrower defaults on a car loan, the car can be repossessed.

    Now, virtual “banks” in SL accept “deposits” for which they promise to pay interest on those deposits. However, do they lend this money to borrowers, and can they get some kind of security on that loan? (I can’t see how this would be possible at this time.)

    OR, have they been taking “deposits”, and investing this money in different businesses, companies, schemes etc in order to promise a fantastically high rate of return?

    IMHO, if an avatar takes people’s money for investment, they should not be calling themselves banks, but rather something else such as an investment houses etc.

    Careful scrutiny of people using the word “bank” might go some way to helping sorting the honest from the stupid and dishonest.

  14. Digital Digital says:

    I am happy that all the casinos are gone, hopefully the next thing to go is camping. And also it’s nice that land prices are coming back down, I think this si all good stuff even though a lot of people think it is negative because second life has gotten to the point for where people are replacing it with their first lives, It’s time that it turned back in to a game 🙂 I would also like to see all the banks go as well!

  15. Fenleab Barrett says:

    I’d prefer a market without a currency….why should SL have a currency anyway? It’s just like all those asian games that suddenly popped up outa nowhere, they’re “free forever” but you can use cash to buy items that’ll boost your gameplay, same with SL, you can use cash to buy items that’ll boost your fun.

    I think it’d be an intersting test on a test server or something, to start an SL, that has no currency that everyone drools or fights over.

  16. Siryn Rosse says:

    I am disappointed that the linden is a “real dollar” when it comes to taxes and not being allowed to gamble with it, but when I lose inventory due to a server failure (which has happened) then it’s “play money” and LL isn’t accountable for that loss.

    You can’t have it both ways, LL.

    And yes, good point that folks who are ripping other people off in-world… if the linden is a “real dollar”, this means they need to be PROSECUTED, not just suspended for a day or the victim told ‘sorry, but you should know better’.

  17. AldoManutio Abruzzo says:

    Well-said/well-asked, Broccoli … I thought exactly the same thing when I read this … hmmm. … are we too cynical?


  18. Thank you for posting this. I like it when Linden Lab talks more openly on issues that concern us, and hope they continue to do so.


  19. Vint Falken says:

    Euhm. Just one thing: Alan Greenspan ‘retired’ and was replaced with Ben Bernanke.

  20. Felix Lubezki says:

    I must say even after watching it all that banks are useful for me as i can hold my cash the interest i could care about though i do hold l elsewhere so i still have backup incase of a thing like this though i have bought into stocks among variuos companies and yes the bank did grant me a loan for payment on my tier which i returned in 4 days though i had been given much much more time before any real charge so i think the banks are working fine in fact the sl banks have absorbed the shock of the ginko deal and have easily replaced any issues with solutions

  21. Jazzman Jibilla says:

    After the Ginko fiasco is this not horse and barn door stuff, the warning about too good to be true being just that? Surely anybody who put money into a virtual institution also sends cheques to the the Nigerian spam scam and was one of the “suckers” old PT Barnum used to talk about.
    L$ cost rl$ but who does LL or anyone of the people who take rl$ out of sl think they are kidding that the sl economy is like the rl one?
    If they do IM me and I have a bridge in New York (rl) you might be interested in. I will sell it at a loss since I bought it many years ago and it’s well used.
    Cheers and thanks for the post..I look forward to the comments on this one..should be a doozey as nothing is closer to people’s hearts than their $ sl or rl.

  22. Moveing Out says:

    I don’t know about anybody else,but the reason I started useing a “Bank” in S/L was because I got tired of logging on every Wed. to find all my cash gone.Good luck getting a Linden to get it back to you.

  23. Bobo Decosta says:

    Second life also sounded to good to be true.

    And what’s up with the no rl laws excuse? You just banned casino’s based on US laws?

  24. Wow – you guys are killing my site. It’ll be back up shortly — they’re moving me to a bigger pipe as I type this. Check back in a bit. Sorry about that.

  25. Anderson Philbin says:

    I find it interesting that LL feels it is necessary to prop up the exchange rate by “sinking” excess L$ funds. Sure, the stipend artificially inflates the available funds, but excess funds would normally just be exchanged US$. All I can see this does is cause land owners to pay more US$ for land and gives LL another income source on top of sales and tier.

    But I am puzzled as to how LL does regulate sinks. They are fixed charges in the main. And if someone wants to pay L$100k for a weekly classified, LL neither encourages nor prevents them.

  26. Hewitt Huet says:

    Well thats the problem here, you see. What’s ‘real’ and whats ‘the game’?

    Whats real is the fact that the Linden is money, pure and simple. And in RL there are consumers wanting to borrow those funds, not so much so in SL. The only way for a ‘bank’ to make money in SL is to speculate in land, or cash out and deposit funds in a RL bank.

    I myself, as a newb, dealt with ‘Citizen’s Bank’ to purchase property. They were fair, friendly and charged a great deal of interest – all told up front and great communication right through, even allowed me to pay in RL Dollars and avoid exchange fees ^^

    But the collapse of Ginko and other reports from the grid indicate that LL BETTER pay attention to this. The one thing that stands out here in SL is the economy in RL dollars. Thats a sensitive thing too, and as the collapse of the USD recently shows, it CAN happen to you!


  27. Ann Otoole says:

    i do hope LL is not going to increase the cost for sending high quality textures through the jpeg destruction system. it is bad enough that lL continues to erode the resolution of already damages textures by limiting what can be resolved and what resolutions can be used instead of finding out what causes the client crashes and fixing the software. Secondlife is supposed to be an immersive graphical environment and the efforts to destroy the quality of this graphical environment are perhaps the very worst thing LL can be doing.

    i do agree that free accounts should incur a cost for exceeding certain inventory limits and perhaps exceeding certain transaction counts. perhaps there should be a flat limit on how much money can be transferred off sl by free accounts? perhaps free accounts should not be allowed to cash out more than $20 a month period. this includes selling lindens on external systems such as After all, if the free accounts are making that much money then they can afford to drop the cash into their sl account in dollars and become a paid subscriber. this would require a new status of course since they would not have payment info on file. no payment info on file but paying their fair share status?

    anyway… i’m not a fan of being charged more for services that degrade the quality of the experience. fix those now.

  28. I run an in-world bank, and it’s saddening to me to hear people wanting to ban inworld banks.
    Guess what that would mean?
    In RL Banks quite much dictate the economic health, like it or not, look deep enough and you see it.

    Also, Banks makes people without the cash upfront possible to make their dreams come true etc etc.

    Well, atlest, in the end of the day, i know that atleast i am trying to run as stabile, transparent and honest operation as possible.

    And at the moment, running an in-world bank is also Legal.
    Asked 2 lawyers already 🙂

  29. Zimmy Ginsberg says:

    @13 – Spot on. Real enough two way cashable for gambling, should be real enough for banking too. Or do you think the 700k real USD swallowed in Ginko was all stipends deposited?

    Not to mention cross invsting, cross ownership, and swapping of board roles between Ginko and the WSE… Since in the end, like for gambling, it is real money being lost here, I think the RL financial authorities will be taking a keen interest in this. Or is Linden Lab happy for SL to be known as a haven for dodgy wheeler dealing that would be illegal in RL? Come to Second Life, the only place where you can lose your shirt twice: once to dodgy banks, and the other through inv loss.

    Or is that a LL bright idea to stimulate the economy? Only seems to be expensive no copy items that get eaten by the asset servers, never freebies. Is there a load of code in there? If llObjectValue > x, llSetRandomInvLossChance…

    And the real question is what economy? Most of it was land deals. Now land prices are plummetting like a stone. Concurrency goes up in small jumps, but doesn’t compete or keep up with the 800 plus new sims added every month. That just spreads people and customers out, increases the number of malls and clubs, so all are increasingly more than half empty.

    It might be nice if the Key Metrics had a total of Lindens for “Business Owners” to compare with land, and come to that, why are those numbers in USD at different bands, when everything else is in L$. Are you trying to hide something?

    And printing money normally leads to sorrow in RL, virtual worlds are no different.

  30. Suzi Phlox says:

    There is a sucker born every minute and this way to the egress! LOL. PT Barnum was right as the gullible bumpkins who gambled in SL or handed their money over to the “Bank” have discovered. Please, send me your Lindens instead…I will even give you a receipt!

    And all this whining about costs and tiers and LL taking your money! You are paying next to nothing for hours of fun so suck it up and go somewhere else if you dont like it here. No one has a gun to your head to force you to stay.

  31. ari blackthorne says:

    Wow – THANKS ZEE!

    Your post is very instructive and an interesting read. It all makes killer sense and now I understand why you won’t take tier payments in Lindens LOL

    Thank you for an educational and interesting look into the inner workings of thinks.

    As for virtual banks… I have to say, I never really understood it for exactly the reasons you mention… storage of my funnymoney isn’t an issue. Only reason to use a virtual bank is to earn that interest they’re promising.


    I’ll keep my cash in my pocket, all. But thanks anayway. ;P

  32. Swythe Armistice says:

    You know what I think?
    Linden Labs has the ability to make lindens and take lindens it’ll be a simple task now that all the records are ont he WSE to just simply give us back our linden dollars from the ginko’s collaspe and make us all happy, while still holding them responsible for paying using their site-based credit system. That’ll save their sims from being sold, their economy from going into a depression and their clients from leaving them. This issue would be solved, and we all could feel at ease.

    But then again. Thats a million dollar dept Ginko’s has, out of the how many millions SL generates?

  33. Swythe Armistice says:

    Oh, and did I mention that’ll also make Ginko’s legally responsible for paying IRL?

  34. sayuri sodwind says:

    i relied on ginko to suplie interest as i do not have weekly strip spend like some people. i also relie on camping. taking these away and pooresr classes of society will be cut out fun.
    i think LL should get all nessary legal licences for banking and gambling. there enough major corperations to shoulder it with corperation tax. second life is equivilent to a virtual state. so if did want out licencing thne have declare selves and servers a new newtral country, albeiet a “virtual one”. part land inamerica is deamed sovern land of other countries in their embasies. why cant linden lab declair itself to be embersay of this virtual land?
    it only have get it self recognised by united nations. we could all declaire ourselves as citizens of sl, as our accounts could act passports?
    just idea. but no more talk please killing banking off n world. besides u can sell bonds which all deposits ginko converted all cash. it was our panic that killed ginko! the assests are still earning intrest. sme what at a slower rate. it just it not bank any more but an investment house. and forced into that position to protect the assets. until emotions cooled.if bothred to read ginkos post on web page. and yes i had lot invested in ginko, so both victuim and surprised it was not insured at very least, that should been a requirmemt. maybe ll could require that of any futre would be investment house or would be bank? at least something to think about.

  35. Svar says:

    If I remember correctly Zee you weren.t here last August so I will correct you statement. “Since August of 2006 this has kept the exchange rate quite stable as you can see here.”

    Last 8/1/2006 the average exchange rate was 305.32/1 and by 9/1/2006 it was 282.62/1. That is a drop of 8% in 1 month, I hardly call that stable. By 10/1/2006 it was 272.53/1 for another 1 month drop of 3.7%. Since then though with the 8/13/2007 rate of 269.32/1 the exchange rate has only dropped 1.1% in 10 months. So you can say, “Since October of 2006 this has kept the exchange rate quite stable as you can see here”.

  36. Jazzman Jibilla says:

    With virtual people, virtual land, virtual objects, virtual money, virtual banks, virtual sex, I think maybe some of us are getting our first and second lives crossed. As control in a virtual world is virtually impossible, I suggest people figure out what they are prepared to pay for the virtual entertainment value of sl and put only that in.
    Sorry that bridge sold really quickly, which wasn’t surprising at all, at all.
    AND…right on Ann Otoole….the texture things is super a virtual kinda way.

  37. Chrysala says:

    @ Ann:

    A PIOF, non-subscription payer can cashout? My word, I need to pay more attention then!

    I rather thought i had a 0L$ cashout limit… another reason to not go premie then!

  38. Melanie Milland says:

    @11 – I concur on the casinos and the camping, too. But low land prices devalue the land held by small and medium land owners, too – right now, if I wanted to up and leave SL, I would take a hit ov 40% on all land I own.

    That is not ok, I think, neither creating too much money nor creating too much land is a good move in the long run, I think.

    SL is NO GAME, it never was. No points, no levels, no quests, it is a simulation, not a game.
    The moment it is turned into a “game”, it will have seen the last of me!

    I don’t know who ever came up with the notion that SL is a game – it never was!

    I thought land priced at around L$10 quite ok, as a matter of fact, having seen L$20 and even L$25!

    Why should land be cheaper than the cost of creating it? If the price achieved at the initial sale of the land can no longer cover the cost of purchasing and deploying the server it runs on, then new regions would have to be financed from tier payments. Then there would be less of that money for improvements!

    I would rather see land at 10 L$ per sq m and more investment in the infrastructure, like datacenter interconnects and asset servers.

  39. Mart Juno says:

    I’ve read all of these posts so far, and I’m surprised that I haven’t seen anyone else mention it before myself.

    Forget the banking crash and economic wobbliness of late, remember that SL has been getting some great press (especially European), for about 6 months – 1 year now. It can, and will turn against you, and ruin SL for everyone if you let it.

    The press love to hype things up, both good and bad, and if they do then you’d better watch out because the 1.7 million citizens of SL who still log in regularly will start dropping, and the L$ they will spend here will fall too.

    LL is a real company, with real employees, who demand real wages. Since the company has expanded massively due to the good publicity, just imagine what bad publicity may do ….

    It’s time to start looking at the horizon, not a few steps in front …

  40. lostshay banshee says:

    ‘Linden Lab does not intend to recreate or subvert real-world laws in any way’ I know LL is referring to finance and banking in the that statement. But what is all this about recreating real world laws on gambling and subverting the laws on slavery

  41. Cat Cotton says:

    1) If LL had not GOMed the GOM there would be no value on the L$ by LL; they could of then left gambling ect alone.

    2) If LL is going to start regulating the L$ as if it were legal tender; again I give you “gambling” then they should do so across the board. Regulate the in world banks.

    3) I cash in my L$ threw LL system called the Lindex; there for you do accept my L$ as tier fees in the end.

    I do not understand this need to make things so murky. I like many other collect our L$ turn them in and pay our RL tier. LL not only condones it they give us the way and the means.

    Who is trying to cover their backside here. If there is no monetary value to the L$ then there is no need for the IRS. I do not for one minute think that LL is looking out for me or anyone else. They are careful in their wording to cover themselves.

    The IRS, GOM’s LL. Now that’s not a headline I would like to see; but let;s not pretend the wording is anything but very careful in it’s presentation.


  42. Swythe Armistice says:


    Control of a virtual world is possible, the lindens trace every dollar you spend with them automatically, and every object you recieve, right down to the second. They own every sim, and can take any object away from you just by knowing the time you got it.
    The social aspects are also controllable, every string of chat passes through a host server, keywords can be blocked, alarms can be raised when a violation occurs and people can be booted for saying things. Software can do anything you program it to, very effectively too.
    I’m sorry, but your wrong, SL can be controlled, but the people who can control it are not willing to do so.

  43. Demeter Lane says:

    When RL money comes into play, it no longer remains a game, simply put.

    I for one applaud getting rid of lag ridden, bot infested casinos, and hope that camping is soon eliminated too. Oh! While you’re at it? Ban brothels/escorting too, if you don’t mind please 🙂

  44. richard says:

    Probably the most important point is that real-world banks are regulated by real-world laws. Linden Lab does not intend to recreate or subvert real-world laws “where are the casino’s”?

  45. Able Whitman says:

    I’m curious about how Linden dollars can be considered merely “a limited license right to use certain features of the Second Life service”, if they can be freely exchanged on an open market for US$. How are Linden dollars anything other than a de facto fiat currency?

    Similarly, the gambling ban, as LL states in their own policy, is intended to keep LL within the law as it pertains to the US ban on online gambling. If the Linden dollar were not an actual currency, if it were only a “limited license,” and not something of value, how would wagering with Linden dollars be in violation of the prohibition of online gambling? Doesn’t LL’s ban on gambling constitute an implicit acknowledgment that the Linden dollar is a currency rather than a license?

    It rather seems like LL is trying to have it both ways, asserting that the Linden dollar is not a currency, but that it also has intrinsic value. I’m not trying to make my point in order to be cheeky; if there is a way for the Linden dollar to both be a thing of monetary value while at the same time being a “limited license” rather than a fiat currency, I think it would be helpful to have some clarification to that end.

  46. Athena Whizenhunt says:

    If you maintain that Linden dollars are not in any way real money then how can you turn around and say gambling with fake money is real gambling? Monopoly has a casino game and it uses fake money in gambling and it is for ages 12 and up.Sometimes I think that Linden is “cleaning up” SL’s “moral” issues to pave the way for election campaigns in here. If that happens to be the case you better make political assassination of avatars against the TOS too, cause if one of those hillbillies tries to set foot on my land I am coming out shooting

  47. richard says:

    it’s hitler dead?

  48. Maybe a mattress is a better place to put my money than within SecondLife. Toss that at LewisPR and see if it sticks. 🙂

  49. Darena Bryant says:

    I’ve been thinking about this problem, and I think I might have an interesting solution.

    The casinos were major sinks in SL, but more, they were places that people were willing to expend their money to allow those places to BE sinks. People enjoyed going there and spending money and such; now that gambling is illegal, the land owners have no reason to maintin ownership, and the people who were once spending their money are now hording it.

    LL needs to work with the few remaining sim owners to replace the casinos with something both equally profitable and equally fun for all involved. The people who own the sims are going to want to earn something for their efforts and land use, and LL seems to need the sinks that casinos were, as well as the investments in their stack exchange.

    There are a bunch of rough ideas, such as amusement parks and simple games of chance that don’t violate the rules against gambling, yet still award some kind of prizes worth trying for, to draw people back to those sims. Income could come from, say, some kinds of charge to enter fee for the sim or per ride/whatever… not all that different from the amount someone had to pay to play slots or other gambling games.

    It’s just an idea, but hopefully, it can be used in some way.

  50. Jamie Meads says:

    “Linden Lab does not intend to recreate or subvert real-world laws in any way.”

    Hmm.. that seems to me to be very contradictory to your ban on gambling. That certainly is an intention to recreate real-world laws.

  51. U M says:

    “It is a virtual medium of exchange that has real-world value associated with its ability to be traded with others, for real-world currency. While Linden Lab does not guarantee a demand for the L$ or that residents will be able to trade at a consistent rate, a healthy Linden Dollar economy is critical to the health of our service and as such Linden Lab has a strong business interest in maintaining the stability of the L$.”

    I love how they using words now, really the world is not healthy needs help fast! If your saying that lies in people placing the money market on sl. Your looking for problems! What well happen when you find people corning the market and making more then you thought? Banned them? or worse ? I don`t trust LL these days because they say SL is a working Eco, but what they don`t tell you is they change the rules anytime they please. No thank you ZEE!

  52. Virtual banks in-world don’t really have a chance. The fact that todays banks make money off of borrowers is the ticket. Virtual Banks have no way to hold borrowers accountable. In addition, people who deposit money into virtual banks have no way to hold virtual banks accountable. The accountablity in SL between residents and companies is nil. Don’t trust in a virtual bank unless you can afford it. It’s really a wager to see if they will flop.

  53. Jazzman Jibilla says:

    #35…you are right of course…but not controllable by you and I..unless we buy a controlling interest in LL of course. Would you buy this company? The point I think I may be trying to make is that the only difference between sending LL a cheque and the Nigerian Spam scam a cheque is that LL gives us something back and has a real address (at least “they” tell me they do). And if you gave LL a BIG cheque you gambled and seem to be losing..but let’s not get into gambling..HA F-ing Ha !
    #37…sheesh your comments got me worried…The very last thing I want is group spam about rl politicals. Can you get me a really good weapon for our assassination squad.
    As a non-USian I think maybe your “silent,moral,right-wing christian mob” has infiltrated LL because I see their agenda poking it’s ugly nose in. Hope I offended somebody with that.

  54. Are SL Banks Safe…Because They are Not Chartered By Government,SL Or Lindens,They Are Only As Safe As The Confidence Of Their Depositors.
    Will They Be Here Next Week?……..Very Likely!
    Will They Be Here Next Month?…….A Good Bet!
    Next Year?……………………………..Will SL Be Here?
    As a Place To Hold Excess L$ In The Short Term,They Are As Safe As Needed Right Now.To Get A Little Interest,Etc.
    As a Long term Investment,Your Risk….Pull It Out and Invest It In Rl..Bring It Back As Needed…Safer
    Currency Traders Use Them For Overnight Interest(Like Real Banks Do). But Personally 100’s Of thousands,Be Willing To Loose It All .
    I Mean,A “Bank” Making Loans In Romania,To Avoid US Laws,You Decide.
    Gambling,Do You Hear A Large Sucking Sound.Other Than Campers…Where Dose The Money Go?

  55. Less Mohr says:

    I think the issue of translating Linden dollars back into real currency is something that shoudl be discontinued. It would permit the re instatement of ‘gambling’ since one way currency exchange from real currency to Linden currency would no longer count as gambling. Allowing the Linden to real currency exchange not only will effect gambling restrictions but it will only be a matter of time when the US Tax department will be asking for their fair share of currency exchanges especially if you make a profit. Gambling was only the start. Any Linden exchanges will start being victims of a 33% tax…because the IRS LOVES taking out the maxmum when they don’t know what the actual tax shoudl be….buh bye profitable businesses in Second Life.

  56. CHristian Gick says:


  57. Bobo Decosta says:

    So with this post LL confirms that we play with really money and that they will refund all our lost items? You cant say here is real money, buy stuff with it and then you make us loose it just so we would spend more money to buy a replacement? If lindens are real money LL’s first concern is to see that they have back ups for our inventories.

  58. Is the money supply of Linden Dollars increasing per active resident? Is there a good way to evaluate if the SL economy is under inflationary pressures?

  59. Aaron Hansup says:

    I would add that unlike the real world, Second Life’s economy can be significantly altered through the actions of the Lindens. I experienced this with the collapse of Ginko, and would say I feel that in part my loss of money was tied directly in with the Linden’s policy decisions, and feel extremely wronged as a result. I won’t deny responsibility I realized there was risk, but the “powers that be” apparently would rather write a it’s not my fault column instead of carefully examing how their policies will effect the economy.

  60. Arnaud Villota says:

    “Once I built a railroad, and made it run, made it run against time. Once I built a railroad, and now it’s gone, ……bother can you spare me a dime…” Since I have lost all my Lindens on bad investments, bad advice, etc., etc…… I will now live as a bum in Wasteland! ( not such a bad place, not such a cheap place either, but I love the people!) Hope to see some of you there! Thank you Linden Labs, you have really helped by inflating the economy and dropping land prices by flooding the market! You have helped me achieve a dream! so to speak!


  61. SL User says:

    My only problem with the LindeX is that my own account and many others that I know don’t even allow us to sell on the LindeX anymore, even though I’ve had an account for over a year. Yet despite my numerous attempts to fill out a request ticket to get my trading limit back at the right account level they (big surprise) never get answered. Ironically, several of us were able to sell and buy on the LindeX just fine until the whole gambling ban had everybody taking their money out of SL…

    That’s one reason that I do like rival currency exchanges like SLX–they are at least reliable. I have a hard time believing that LL has any real clue that they know how to run an economy because their own support when problems arise in game is nonexistent. Perhaps it comes as no surprise, then, that LL still wholly supports Ginko and the WSE; two more organizations to steal and funnel money while taking economic blame off of the Lindens’ shoulders in the process.

    I remember the days when the Lindens would arbitrarily delete items that they saw in world to be culturally offensive, though they didn’t like to “get involved.” I can’t think of anything more culturally offensive than letting a thief like Nicholas or Luke off the hook, citing “if it’s too good to be true, then it is” as warning. Heck, LL (sometimes) ban the avatars that pass around the objects that, if you accept it, take all your in game lindens. The only difference here is that Ginko, WSE, and other banks and exchanges don’t steal their money via prims, but via persuasion and the smoke screen mentality that if what they were doing was wrong, LL wouldn’t let them continue.

  62. Kyder Ling says:

    It’s always a good idea to never draw attention to yourself by telling folks how much money you have guys. Just throwing this out there, but ISL or IRL, do not be so willing to give away this kind of information, to anyone. And always ask questions. Knowing is half the battle.

  63. Nerketur Kamachi says:

    @all: I have looked at most of these comments, and noticed that people think that LL has said that a L$ has no monetary value. This is true, but note that L$ are like coupons. They have no real value, but can be exchanged for goods and services, (one being cash) So, they ARE worth something, but LL doesn’t have the obligation to ever pay you back. It never did. So don’t complain. It’s like a bank. Though the bank says it will pay you back, it can’t always do so. LL has said, in their TOS, that they will never be obligated to pay anyone back, for any reason. Sue them if you want, but they will slam that in your face.

    @31: I agree with you about the land. Selling land for less makes for a decolining economy. Also, I never thought of SL as a game. How is it? Sure, you can CREATE a game using it, but in general, yes, I agree with you there too.

    As for banking…I’m not against it, but I really don’t see a need for it. I probably won’t use one, so, it’s not for me xP

  64. Amara Parmelee says:

    interesting…..the L$ is real money….but once it’s taken, either by fraud or by server issues, it’s suddenly not LL’s problem. Please be fair.

    You cannot just apply real life laws to parts of SL and blindly look the other way. If banks are risky, those ATM’s of theirs technically count as “gambling”. Residents put their money in in the belief they will be getting it back. These people can up and run with people’s money and I bet LL would ultimately scold us, with no refunds given.

    If gambling is banned, the banks will have to be regulated or tossed. Otherwise, invest in the gaming licenses to keep things as they were. Linden Labs cannot have it both ways.

  65. hope antonelli says:

    As population growth stabilizes, the use and development of Linden Dollar sinks will become more prominent.

    Lindenspeak for be prepared for higher costs in world for services, fees and such while we try and recover the money lost to accounts being cancelled and tier lost due to our own stupidity?

  66. chmarr says:

    well for the love of god.

    in december LL took TWO MILLION from my account even tho i only had 302,000 in my account due to someone dropping 1.6 million into my sploder the time it took for the drop down blue info box telling me that the money was dropped into my sploder i was kicked off the server and my account suspended.

    it took them untill mid january to answer my emails.
    after i got back on my account was in the red to the tune of MINUS 1,892,000 i fired off emails to just about everyone of the accounts department asking what the hell is going on.i was basicly told that i was a victim of fraud and since i “took” the money i was to be punished.

    my account WAS MINUS 1,873,000
    its took me from january untill today to get to MINUS 1,513,220

    i have tried phoning LL i have sent off about 4 dozen emails but the last phone call i was told to “f*** off we dont want you in our game”

  67. Pingback: bookmarks for August 14th | Technovia

  68. Customer says:

    chmarr I believe you. That is how LL treats it’s customers. They could care less.

  69. Archo Beck says:

    “SL can be controlled”…. lol

  70. Rudolph Ormsby says:

    The Second Life economy is a VIRTUAL economy. This is really quite a fundamental point to understand. The money system (in its own right) is meant to be virtual (even if it can be traded with USD).

    “Banks” and “stock exchanges” related to SL are ALSO virtual (and in some cases openly declared as FICTIONAL).

    This means that when you “deposit” Linden dollars into a SL “bank” you are engaging in a kind of roleplay, where you are choosing the role of “customer” and playing with someone who set up the group who is playing the role of “banker” (ooops, nearly mis-typed that). It would be OOC (Out Of Context) in this roleplay for the “banker” to tell you that you have little or no chance of getting back your deposit or the “fantasy” levels of interest offered. So, when you lose your Linden dollars by intending to withdraw them at the wrong time (which is kinda like gambling, except there is no random number generation), it is all part of the simulated role play.

    You wouldn’t go to a Wild West sim and not expect to get shot at if you argue with the tough the guy at the bar would you?

    I genuinely feel sorry for all the people that have lost money in Ginko and all the people that are highly likely to lose Linden dollars in the other 30 similarly structured (errrmm…financed?) “banks”, but at some point you do have to take a deep breath, go AFK and realise that SL is not the real world, then come back to SL and go and explore some of the absolutely amazing content that there is out there, meet people and have some fun.

  71. bd_ says:

    For those saying LL should obtain a gambling licence, I doubt this would be possible. Getting a gambling licence requires allowing inspectors to examine everything related to the gambling operation and certify it – first, I doubt that the SL core is simple enough that it could be certified to the level needed, and second, this would require EVERY ingame script to be certified as well. So this isn’t really possible at all.

  72. Stetson rail says:

    Ok ppl, look its as simple as this, they talk the talk, they say what they think what we wanna hear but again lets put it into what it is with 13,000 sims give or take a few hundred… at a 40% decrease in land value it 19.5 million in us we the ppl ( players have lost from the increased in land, but atlas lets look at it from there side, 300 new sims amonth times 195 tier(if a full sim) 58,500 a month x12 months 702,000 us dolars for them x 12 months damn near 8.5 million in tier more u think they give a rats ass about the 19.5 million us dollars the players lost in the last 30 days? heck maybe they should double the tier and make us all wear dunce hats when in world

  73. Jazzman Jibilla says:

    I think #49 has seconded what I said earlier but made it clearer than I did. So moved, and surely carried nearly unanimously although I would expect that #48 may abstain and I couldn’t blame them. That is an ugly story.
    /Jazzman Jibilla thinks in his best Bogey voice, ” One of the million ugly stories out here in Blog city schweetheart. Somebody get me rewrite.”

  74. Crusader Superior says:

    Michael Linden also returned all my games and i only had grid games aswell (no casino games) all he left was a blog link, thats what i get after 8 months of tier,time and tons of money. Its clear they have no idea what games are what or they choose who it is can and cannot have them. Either way its not right. iv tryed despreatly for 3 days to contact, michael,philip or robin linden on the matter. only one response after 3 days from robin and was the total run around again. Its not the rules changing that bothers all of us about it, its the way it was brought about and our SL lifes flipped up side down over night without any form of reinbursment or fair warning.

    For being so called “premium members” the loss of inventory,land sales,currency decline,games banned (owner of a games business) my job loss, my income loss and 8 months of RL time. NOT what i had in mind.

    ~ Puts sack and stick over shoulder and whistles off down the raod ~

  75. SL is a luxury, not a neccessity, unless your primary source of income for living, is generated from SL.

    “While Linden Lab does not guarantee a demand for the L$ or that residents will be able to trade at a consistent rate, a healthy Linden Dollar economy is critical to the health of our service and as such Linden Lab has a strong business interest in maintaining the stability of the L$.”

    Linden Lab cannot gaurantee a demand for the L$, “cannot” is the correct definition, not “does not”, Linden Lab cannot force such demand because “demand” depends on the available customers.

    Linden Labs could give Land and L$ free… it CANNOT gaurantee demand.

    It is certainly “critical to the health” of Linden Lab, as SL is its primary source of income for living, but that is my assumption, since i dont know for sure.

    If you, the customer choose to make the L$ your primary source of income for living, then it is a neccessity for you… for anyone who does not… it is a luxury.

    Do you have all your eggs in one basket? more fool you.

    i can lose all my luxuries and still survive, still live.. i attach no critical demand for the availability of SL to enable my life. SL is a luxury, just like the PC it runs on… i can turn it off.

  76. Gracie says:

    Gee… The SL economy is starting to go down and fail… Who’d have guessed this would happen??? Oh yeah, WE DID! Bring gaming back!

  77. SL Player™ says:

    Who’s going to swarm all those millions of catholic churches that play bingo evey Wednesday night and tell them bingo is illegal. No one cause it’s legal.

  78. U M says:

    46, “We need to get a GAME UNION made & have LL state to us in writing that Slingo Zyngo Tringo Shrooms Quincee & the other games that play like this are LEGAL. It isn’t up to them to decide if a game is a casino game or not their are LAWS for that.”

    As you know Kermitt brought alot of money in to sl and then he products a Game Boy version that gave second life even more PR about playing games on sl. LL owes kermitt for what he did to gaming. That is why tringo style game are not outlawed. Its just another WHO you know and what you done that earned you a place or honor and ranking.

  79. SL Player™ says:

    Blaim it on Bush

  80. I find the average L$ per account very low. But maybe that’s because from the 1.7 million accounts, only 25% is actually in use? I’d like to see an average on -active- accounts. Just for the fun of it 😛

  81. Jazzman Jibilla says:

    I will help swarm a church with you SL Player…because they should be illegal !

  82. hope antonelli says:

    *rolls her eyes* yes my son’s new puppy peed on the floor..why don’t we blame Bush for that too?

  83. @49: Because you say it is so doesn’t make it so. Because Linden Lab says it is so does not make it so. To say that real world copyright is here and is exchanged for anything less than real is silly. It is counterintuitive. The money within the SecondLife economy is as real as the copyright which it is used to purchase. Tossing a wet blanket over that reality is just asking for trouble.

    Virtual. Is the time you spend inworld ‘virtual’? When you log out, is it the same time as when you logged in? Are you changed for the experience?

    And if the stock exchanges are fictional – well, heck, they should be able to cover the GPB losses Ginko Financial customers are taking – it is fictional currency, right? Just write some more!

    @48 – would love to hear more about that.

    @POST: The lack of policy related to fraud (not banks) and the protection of the interests of the community, financial or otherwise, serves to undermine the trust in the Linden dollar. This in turn means that the value of the Linden dollar will decrease, which would mean that instead of worrying about putting Linden dollars into the economy… you’d have to worry about putting US dollars into the economy. When the collective trust in the Linden dollar decreases enough, how much of a run can Linden Lab sustain?

  84. Ok, I missed something.

    Linden doesn’t have GS iw banks because it’s extra data to keep track of.

    Signing in already rewards a high rate of return, more so if you’re a paying customer.

    Bush fought the wrong war in the wrong way, but he did a dang good job at it.

    Blame Bush, not the boys on the ground.
    >>back to our regularly scheduled program.

  85. Harvz Wilber says:

    unlike the real world, The safest place for your money is neatly tucked under your scripted mattress. Really, I only semi trust my real world bank. they make screwy mistakes with my direct deposit from work, deduct twice for the same check, forget to apply checkcard charges, and always hit me with an automatic fee when i have less than $10 in the bank. I only keep them honest by being vigilant. LL has always been square with my account and provides downloadable excel spreadsheets that i can proof against. I never have a problem with LL, and never trusted anyone who claims that i can make money without workng for it. on this vacation from reality, dont take a vacation from your common sense.

    do yourself a favor and download the transaction reports regularly. Any disputes with other residents or even with LL will be suported by your spreadsheets.

  86. Jazzman Jibilla says:

    Come off it #61….let’s not get into discussing time…it is not relevant.
    I am not sure I follow what you mean by copyright. If copyrights had any impact in sl we would be hearing about it from the rl music industry because what goes on is essentially broadcasting….and visual artists who post their work to the web are ripped off thousands of times for textures.
    Yes, let’s hear some more of #48’s story…Chmarr come back !

  87. Babyblues Boffin says:


  88. Although I have watched land prices rise dramatically and fall dramatically, seen the population rise fast then slow down to a point where I still question if the increase in accounts is oustripping the cancelled and unpaid accounts, I have to admit that the L$ only shifts a few points either direction, and has retained mostly the same value as a year ago. Not much of an issue with L$.

    Oh BTW did I miss the JULY METRICS? When will they be released, and will they have population retention statistics on them?

  89. Actually you effectively can pay Linden land tier and membership with L$. You can sell them back to Linden Lab on Lindex and then leave them in yr account as US$ balance. If you owe LL money, the debt and the corresponding dollars will magically disappear. I had to do that once when I had credit card issues on my tier day. (I had plenty of money, but my card had been switched to a different bank.)

    As for the gambling thing, LL most certainly does have the right to ban gambling, even if L$ are technically not a currency. Aside from the fact that they can ban ANY activity which is in their opinion not in their best interests to have on the grid… even LEGAL activity… L$ are an item of value which are easily convertible to RL dollars.

  90. Aloe Stradling says:

    I personally think you whiny brats need to shove it. You Got what you F-ing deserved! Sadly, you also inflicted it on the rest of us. Pointing fingers at the bank makes me sick. I lost quite a lot myself, but, I don’t blame Ginko. Who do I blame? STUPID PEOPLE. Probably like you, in fact.

    The panic bank run with everyone throwing a tantrum and demanding money at once. THAT is what killed Ginko. If people had clamed down and waited a week or so, the problem would have passed without a ripple. But no, people panicked like brainless cattle, and stampeded.

    If you were on SL for gambling only, and you decided to pull your funds, more power to you, tho, you’ll never read this. Yuo don’t give a shit about SL itself. You started the mess, but, you didn’t kill Ginko.

    If you were a Ginko contributer who used Ginko month after month, happily accruing interest and all, only to turn on them, and the rest of us investors by being a part of the panic and bank run? SHUT UP.

    And, if you, like me, had anticipated the ripple to pass, like the previous ones, (Ask any long term
    Ginko person. These shortages happened after /several/ gridwide changes, but ,they always evened out), If you supported, and still support Ginko at all, those few of us who don’t turn on them, Well, I’m so sorry for my loss and yours.

  91. Macro Voss says:

    I am interested to find out what happens to the SL economy after the SL server code becomes freely available and people can run their own servers. How are the L$ managed then? What happens to the value of property when you can just use your own server for land? Does it even make sense to have L$ when people are running their own servers? Is the virtual economy an obstacle in the way of SL becoming a new media standard (next web)? The internet itself seems to be doing fine with PayPal and credit cards.

  92. blackcrow6667 Garmes says:

    “..since the middle of 2006, when Second Life’s population really began to take off, Linden has been running a persistent and growing budget deficit within the virtual world’s economy.”

    “To summarize, it appears very likely that Second Life will experience at least some form of economic recession.”

  93. Bobo Decosta says:

    @53 remember the day when internet was just a luxury? Well take it away and the world economy collapses. So it’s very stupid to say people can miss SL when SL themselves want to be portrayed as the new internet.

    @60 because Bush is not responsible for your dog to pee on the floor. Although that’s my guess. Or does your government also put pressure on pets now?

    SL is going to have to really start with damage control. In europe SL is almost the laughing stock of the internet and believe me when a bank like ginko collapses this proves already what they are saying for months now : SL is a pyramid game.

    BTW pyramid games are illegal in my country

  94. wayne says:

    Linden Lab does not intend to recreate or subvert real-world laws in any way

    BULL you took away Gaming, i can see the casino’s but the spolder, it’s a game of chance, just like the Lottery.. we have that in california LL needs to get back to waht they once were… a game . next they’ll start taxing everyones account because you made 1L dollar.. i’m about to give up on secondlife. it’s becoming not as fun, and that is what your suppose to be doing here right having fun..

  95. Astarte says:

    I thought your TOS covered illegal activity….

    Serious thought should be made of the actions of some financial institutions within SL as to whether their activity is legal or not. There is a big question mark in this respect.

    But yes generally everything was going fine until the blanket no gambling decision. which has now screwed a lot of the stability. Let’s all hope that it settles down again.

  96. hope antonelli says:

    the point is this is not the place to interject political dogma. US bashing and Bush bashing gets real old real quick.

  97. @63 – The case with Eros v John Doe demonstrates that copyright is taken seriously. The DMCA is something Linden Lab acknowledges. The case of Bragg v. Linden has demonstrated that Second Life ToS is not bulletproof, and that at the very least a court case can be made over ‘virtual land’ and Linden dollars. Many people have written about this in the context of virtual worlds. You can’t take a white sheep, paint it orange and sell it as a fictional sheep. ‘Fictional’ implies that something is part of a work of fiction; while you may believe that SecondLife is a work of fiction it is what the community thinks that is important – and with all the media mention, Second Life is connected to the real world in ways that Linden Lab, apparently, didn’t anticipate. Snowcrash was a work of fiction. Second Life is not. Second Life is as real as people believe it is. If you do not believe it is real, that’s ok. I understand that – but the evidence is quite to the contrary.

  98. PC Paderborn says:

    Just an interesting aside, something I think about every time the Lindens talk about the SL Economy and Key Metrics.

    When I joined SL ten months ago or so, there was almost 1.5 million residents and there was close to one million US dollars changing hands every day.

    Now there are 8.5 million residents, an increase of more than 500%.

    One would assume that the US Dollars changing hands would go up by about the same amount.

    But instead of US$5.6 million changing hands each day, it’s only 1.1 million.

    By their numbers, the SL economy has tanked and has fallen 80% in the past ten months.

  99. Darena Bryant says:

    I know at this point most people are just set on making snide remarks and not really putting any thought into it… But now that we’ve established that everyone hates what’s going on, can we at least try to think of if there is any kind of fix or solution that can be put in effect?

  100. KittyCat Rosebud says:

    So I read the thing on land and this.

    What happened to all those Lindens [$L] and objects that got lost in Transaction over the past weeks?

    Have the Lindens caught on that Second Life ate some ammount of Lindens, Object Transactions, and Inventory (well they only admit to the Inventory placed on land,.. not the entire inventories some people lost without rezing a thing).

    Do you think these facts from recent weeks have been put into any of what has been said, noticed, or thought out in this and the Land Blog post?

    Everyone needs to settle down. Second Life needs to be proved stable first ( it is currently still loseing Lindens and items)… atleast to some tolerable point.Then please look at your Current ( as of over a week of stablity) statistics.

    Otherwise all these are as useless as examineing the pockets of pants fresh out of the dryer.

    Now onto the users. I am glad I finally get to post this some where where you panicing posters can read SECOND LIFE WAS FORCED TO REMOVE THE GAMBLEING… by the United States… it’s the law and the law bothered them. Quit being mad at them about that. The Pediophilia was wrong because it is age verification Governments are seeking ( it is offically legal to display a virtual child engaged in a sexual act AS LONG AS that child is either an AI or being controled by an Adult… recent court cases, ruleings, and laws have mad it clear). Not that I would engage in such activities but I like to pay attention to laws. [Also, according to what Japan has gone through, giving predators alternatives like Games and “Dolls” reduces or more often ceases their attacks on real people. But to fully secure that they would need to control age because all the children wandering SL right now are exactly what predators look for on these games. This is a problem because they sweet talk teens, children, and adults who are or just have left home into life threatening situations in Real Life. Which everyone turns a blind eye to and doesn’t seem to believe in– WAKE UP CALL!] They are not going to ban Escorts, Nude Bars/Strip Clubs and online prostitution as these are not illegal by US Laws (that is what they must follow).

    In short– Lindens keep up the work to stablelize THE CLIENT.. not the curency.

    Fellow Users of Second Life — Everything is pointless until things are stablized and balanced out. Keep reminding them if that has caused you any problems/restrictions. It’s feed back.

  101. Pingback: The Cycle » Blog Archive » Virtual banking crisis

  102. Rudolph Ormsby says:

    @61 – Sorry Nobody, I was trying to subtly hint that perhaps people should perhaps reconsider their banking investments…. I am with you, the Ginko losses are entirely real to those that lost out, a symptom of the fact that the Linden Dollar can be converted to USD. As an aside, it appears (from the forums) that Ginko’s owner “as a general rule” does not trust SL banks and that he estimates that 50 per cent of them are probably Ponzi schemes…..

    More on topic, and maybe to spark a little debate – what would SL be like if the Linden Dollar was entirely disassociated from the USD?

    Casinos would (presumably) be legal again of course, but how many would return? How many truly altruistic content creators would stick around? We would certainly get “your world, your imagination” back, but could the SL economy actually work if you could not cash out those USD? Would SL be a better place? Does SL actually need an economy that is linked to RL in order to be a place of entertainment, education and creativity? There would certainly be less stress, well, in the long term anyway….

  103. Rhiann DeCuir says:

    *Hauls out the dusty soapbox and begins the rant*

    I never cared about gaming, I never did it much, The few times i did I Always Lost, lining the casino owners pocket. Could care less if it stays or go on a gaming level. But I do know, lots of *virtual players* pay Real Life Currency to buy Lindens. Alot of ppl cant do that, so they rely on Slingo, Gambling and CLub Sploders to be able to buy an outfit or two or maybe a cheap skybox to have some fun in. I had to remove the sploder from my club, now less than half are coming in. I used it only to try and make enough money to pay my *virtual* tier. The land I live on, costed alot of RL now you add loads of new sims, drop prices on horriblbly lagged mainland property so my *Luxury* land isnt worth jack. Why?…So I will follow the hoardes of ppl to buy cheap laggy mainland, and lose the hundreds of REAL dollars Ive sunk into tier and property fees, to line your pockets more, ….to be controlled by you, who cant even maintain a stable grid, and lose even MORE of the luxury items my RL money was used to purchase?. if you cant get it right..dont make us pay for it,. Lord knows you dont employ enough ppl, has anyone ever tried to contact *Support* for an issue….good luck..How about using some of those millions to employ a few telephone support techs. Think of us , the SL users for ONCE.

    My advice, dont buy land, rent it..and dont try to make any money here, very few will succeed at it. Give yourself a budget of RL money to spend on the *virtual* game, and stick to it..And Have some fun…thats what this place is supposed to be, an escape from stress and boredom.

    Try moving your servers offshore , cant be any less stable than it is now…and thats not saying much.. keep your users happy, or someone else will…just a matter of time…..

    Im not quite sure why you keep adding new features when the old ones dont even work yet? it is lack of knowledgable employees, or the desire to not spend any money to fix problems? probably a bit of both…

    *steps off her soapbox, now finding it dusted off rather nicely…*

  104. concerned says:

    I support the work done by the lindens and the open source community.However in the past year i have seen a swap from a world with laws that were set to land to a world where rip offs are not discouraged in anyway but the citizens that make items,pay tiers and contribute to the economy are just ignored,there are laws all over this planet and no game or online world can ever conform to them all,So you discourage banking institutes i would agree but you ban gambling,I can understand why to cover yourselves,You tell people who lose content to contact creator to replace items but if your service doesn’t deliever you are not responible.My point is if you want people to keep faith with the service you need to have your rules set in stone and rules that cover your citiezen and not just yourselfs,The home page reads “Your world,Your imagination”.
    What is second life reads “Second Life is a 3-D virtual world entirely built and owned by its Residents”I don’t believe this is true anymore.

  105. Arsheba Nasu says:

    Let me set the record straight regarding the so-called Second Life Economy. There isn’t one. Not any longer.

    You only need to look at the Popular Places list to see what the vast majority of active accounts in SL are doing. They’re camping.

    The first and last impression most new sign-ups see is the camping farms. This is what Second Life has become, and Linden does not seem to mind at all.

    These camping farms, largely driven by the too-good-to-be-true idea sold to advertisers that there is some value in advertising to zombies, have completely taken over not only the ebb and flow of the money supply, but also the overall trend that accelerates away from the days when real people spent real money developing real virtual content that real people wanted to find. Now all they can find is camping farms. And those who have invested large sums of time and money creating content, whether social or commercial in nature, are finding it more and more difficult to reach the few genuine customers left.

    Businesses are gasping for air. All the methods of advertising and publicity that once allowed us to thrive, based on our own merits, no longer function. Does it really take the collapse of Ginko to make it obvious that the SL economy is in a death spiral?

    The traffic-point system has been completely corrupted to the point that there is a seemingly endless supply of advertisers who have been duped into thinking it’s a no-brainer to fund these camping farms in exchange for Top-20 advertising. When one realizes the money was wasted, there are hundreds more waiting in line to advertise to the chronically AFK.

    There seems to be no end in sight to the camping farms’ control of Search and Popular Places, and the air’s getting quite thin for the rest of us.

  106. Nulflux Negulesco says:

    Ann, I cannot disagree with you more. I am a free account, I started SL with no money, for the first month I was at 0LS and couldn’t figure out how to make money. I have worked my ass off (literally, I’m really skinny now) creating products for at least 8 hours EVERY DAY.

    I put as much if not more money into the LL sinks in one day than most premium members do in a month. As a matter of fact, my upload charges can EXCEED the cost of a premium account in only a couple hours.

    The loss of casinos were not noticeable at first, however sales have literally dropped through the floor and I’m not sure if they will ever recover. You need to understand that the casinos not only took a lot of people’s money but they also gave it back. I estimate (roughly) that over 50% of the camping stations operated in SL were operated by casino owners…

    Anyone having a hard time finding a camping spot? Anyone notice their sales have plummeted? People do not have the cash flow that they are used to, there is no alternate strategy to compensate for the losses and everyone is going broke fast.

    Don’t get me wrong, I had major issues with the casinos that were in operation. However, by completely banning casinos (and all games of chance) severe negative consequences for the ENTIRE SL economy have arisen.

    I am not happy, with the Lindens specifically. The blog posts are contradictory – one stating all RL laws are to be followed and another saying it is a fantasy land and RL laws shouldn’t apply. Same issue with the Linden Currency – in instances where LL can entice users into becoming members of SL they state that Linden Currency is as good as RL money, in others they state that it has no face value. I urge LL to take a step back and realize how much of a hypocritical situation they have put themselves in.

    Note: I think an easier solution to removing the gambling apparatus would have been to simply restrict llFrand() to scripts which do not access money related commands… sure beats running around SL returning objects. However, I do not believe removal of all these devices is a positive outcome. I think LL needs to make up their minds. If they intend to impose RL laws on SL, then do it completely and accurately (yes that does mean that some gambling and some casinos will be legal in SOME places, it also means imposing the proper taxes… ooh we all hate that); If this is the course of action LL takes, then they must regulate such gambling organizations with CONCRETE and DEFINED rules based on RL law.

    The plain and simple fact is that LL is not imposing RL laws, they have invented blanket rules which in SOME ways support RL laws. In others, these rules completely contradict the very foundation (and freedoms) this nation was built upon.

    So let’s have it Lindens, what will your course of action be. Don’t give us this hypocritical double-speak. Give us a definite and easily understood answer that actually means what you say it does.

  107. concerned says:

    @74 I completely agree,The economy will collapse when the only people left are non profit or traffic hoggers,This isn’t the game it was 6 months ago.

  108. Bobo Decosta says:

    #72 my casino would return if the linden was disassociated from the dollar. I had a small casino, nothing like those huge casino’s, it was build with style to create a real looking casino environment, it was not build to cash out, it was build to have some game in a game that lacks game experience. What happend with the money that came in? It went all back to sl economy. No single USD was cashet out ever!

    The casino ban effects every aspect of my sim still my casino was about 1000 m2. I don’t see no renters no more, not for residential or commercial. Till the casino ban became effective i had 90% rented out all of the time. The only people i see come looking for campers.

    The casino ban has taken down gaming and as well the sl economy.

  109. concerned says:

    @75 although i agree with most of the points you made i use llFrand() and have never made a gambling item i use it for certain items i make that require random effects etc.

  110. Arsheba Nasu says:

    That’s true. Linden likes to have it both ways. They have a serious identity crisis that serves their interests just fine.

    When people have serious concerns about business, it’s just a Game. In other circumstances, it’s a Virtual World. When they suspend your account, it’s a Service.

    And Linden flaunts the exhalted Keys to Unfair Advantage. Look who’s got the new coveted Community Portal status… That’s right, the NBA and Ben & Jerry’s. Newly created accounts are herded to these corporate darlings by default, or to Linden’s manufactured success stories like Anshe Chung’s Dreamland. There is no application form to attain this unfair advantage. No open forum to debate the suitability of the chosen. No published list of requirements for eligibility to apply to become an exhalted Community Portal.

    I find the comparison with the corrupt Federal Reserve System quite enlightening.

  111. KittyCat Rosebud says:

    Nulflux — Gambleing sites were trying to create places similar to Second Life simply to dodge the more detailed laws. As a result, places like Second Life now are given new guidelines and told they have to remove all Gambleing. It’s not by Linden Labs thinking about these things, but because they have been contacted by now. The only way they can get around this is if Lindens (the curency) were no longer allowed to be sold or traded for Real Life curency or objects.

  112. Joseph Woolley says:

    Linden, since you don’t want to publish my blog regarding the land sales. I will repeat it here, if you keep it out again, i will publish it on the world wide web.

    1st – forget about the good old day land price of average 2.5L per sqm. Linden stop ding first land sale of 1L per sqm now.

    2nd – Forget about wanting to have land price below 5L per sqm. The lowest possible start cost for a sim now is 5.84L per sqm. Minimum bid of US$1250 plus Tier cost of US$195 equal to US$1445. Take that multiply by 265 linden, you get 382925 linden. Divide that by 65536 sqm, you get 5.84 Linden per sqm. This is assuming you can sell the linden at 265 linden after deducting all the necessary cost charge by lindex or other exchange. More often than not, you will sell at 275L.

    3rd – Linden is the only one to really profit substantially. They remove the first land sale, then they increase the minimum bid to US$1250. They put out more land auction than now during period when the average land price is more than 10L. Check back few months. They just choose to put land as and when they can profit the most. There is no systematic approach.

    4th – They are just pumping more sims into their pathetic infrastructure to gain more profit in terms of land sale but more importantly the tier charges.
    They will be just happy that you keep buying the auction land. This greed is now starting to come back to bite them. More sims with items vs inadequate infrastructure = more bugs & problems = slower user growth.

    5th – I dare them to be transparent about their infrasructure support. Eg. Sims per Server now compare to 1 year ago. The network bandwidth, database asset, etc, etc compare to 1 year ago. What have linden done to support the EXPLOSIVE growth in the number of regions. All of us premium users are paying to support them. Instead of providing good service to us, Linden is ripping us off by having indiscriminate land sales.

    6th – Linden, if you are so “noble” compare to those land barons, then i dare you to stop charging for land sales, since we don’t own them legally anyway. Charge just the current tier. Can you do that? Nah, i don’t think so, cause you want to profit more & more. You guys are just getting farther & farther from when second life first started, but towards the bad side of it.

    7th – Yes, linden control the SL economy. However the land price tanks, they can simply ignore it. So long as the auction land & islands keep getting bought and they keep getting the tier charges. My dear fellow SLers, this is the real BIG BUCKS. Not their so called SL economy or the Casino guys, the land barons, these are small peanuts.


  113. Jazzman Jibilla says:

    Ah you may well be right #70 Nobody, but it seems to me that law suits can be launched in your country at the drop of hat. A copyable version of the bed somehow got out…lawyers got involved…LL gave out the required info. Wouldn’t a judge I want to know how the copyable version got out?
    Somebody with permissions (Eros?) checked the copyable box…and’s public domain. I know nothing of law, but it would seem to me (with very imperfect knowledge) that copyright was given away on that one, unless the copyrights were hacked. Is that even possible and if it is we all got trouble.
    It ought to keep lawyers occupied for a little while. I await word that Warner Bros wants every sl dj’s name. That will be the end.

    The real/unreal sl debate is carried on in so many ways everyday inworld and of course there are sooo many shades of grey in the debate. Surely media attention doesn’t mean anything other than media attention, and it is fleeting at best. I am sure that most residents know that the people behind avatars are real but sl is a fiction…it can be deleted with a keystroke, and anything created inworld is the same…a digital fiction and mod/copy/transfer boxes are no copyright protection,TOS notwithstanding. If they think it is then I have a copy of that bridge I sold earlier.
    You are bang on that sl has moved in directions that LL couldn’t anticipate and decisions they made back at the beginning they probably wish they hadn’t made now. Me too.
    I can’t help thinking that the judge who hears Eros vs John Doe is gonna laugh his head off. What do you think that case is going to mean inworld?

  114. Kyzaadrao Skall says:

    ThaBiGGDoGG Richez … every announcement on the blogs is not the place to vent about your casino equipment woes. Your life would be much easier if you built couches, but since your choice is not to, your troubles are between yourself and the Lindens.

    I applaud the clarity about the economy personally, and much of it makes sense. I think we’ve learned some very valuable lessons as the Ginko/WSE saga continues (lets hope the WSE gets rid of Nick as a major shareholder, as it ruins any reputable aspect of WSE, as it looks like Ginko Part 2).

    The Lindens should not get involved in disputes and are trying their best not to. If they “do” it means loss of freedom in business, more regulations that would make it harder to operate and probably more cost to go with it.

    Folks complain when Linden Labs jump in, and complain when they stay out of it. You can’t have it both ways.

  115. Samuel Geiger says:


    You may be right if viewed from a Linden mindset. Viewed from those like us with logical reasoning skills, we know the number of users is extremely exaggerated (read as bullshit). When a company has to make up numbers to try to make itself look good, then, in the case you’ve pointed out, gets caught with their pants down (playing with themselves inside the new cars they buy with our money), it just motivates them to once more post made up self-congratulatory posts and other subversions to try to take our eyes off of things. IF there’s any reality to the 8M+ users, I’ll put my house up as the wager that 99% of those are alts, or dead accounts of people that laughed their asses off wondering why we even bother posting in this blog, let alone stay in the game.


  116. Janie Matahari says:

    the lindens removed free play slingo???? @@#$%$%^%$^&%^*%&*^&*^%&*&^%*!!!!!!!!!!!!!!!!!!!

    who the #$#$%#$%$# is making these decisions????


  117. “We caution our residents to be wary of anyone offering extremely high interest rates at no risk, either in the real world or in Second Life — if it sounds too good to be true, it probably is.”

    Ginko had the lowest interest rates of any “institution” at the time I joined and remained fairly low to moderate. This is a straw-man argument. Frankly, I was taken. Shame on me, to the tune of some $60,000L. But it appears to me that the leaders of Ginko have violated the spirt of ToS, if not the letter.

    And LL doesn’t seem to catch the implications this means to their reputation.

  118. concerned says:

    Won’t be able to dance in sl soon once someone on the team watches footloose,lol.Its all getting a bit silly i see to cover themselves they banned gambling but seems to be a whitewash ban wether you pay in or not,But if someone wants to set up an illegal bank the action is blog and say we don’t advise investing

  119. Nulflux Negulesco says:

    #78 – I said to restrict llFrand() to only scripts that do not use money functions and events. That would also mean determining and preventing the communication of random values generated by other scripts to and from scripts that use llFrand(). If those rules were followed it would not effect scripts that use llFrand() for random effects.

  120. i sure wish ‘they’ would realize how much of an oxymoron they are…. banning something because of real life laws and then saying they don’t do ‘that’!! come on!….. i predict a year from now we will all be saying, ‘remember that huge enterprise that had so much going for them’…. it was fun, met some great friends during my 3 years as a citizen…. but to me Second Life has become a complete remake of those Age 1+ Barbie Doll Dress Up games…. except X-rated…. and I’m not into Barbies so bye bye all

  121. concerned says:

    @85 yeah i know and i dont know if that would be possible the reason i raised question is ive seen gum vendors in sl and other vendors that dont relate to gambling but can give a random colored item etc,I understand the idea and in principle agree with it but the out come may break several genuine items or vendors.

  122. Zaldar Rhode says:

    So for all the people who want banks banned. Just don’t use them. The basic law in economy is the larger the risk the larger the reward. So yes SL banks are a larger risk than RL banks and you some will crash and you will lose money, but banning SL banks will ruin the SL economy even more. It has sort of fixed itself after the casino ban, but that really hurt every business overall.

    People who want to ban everything from SL will not fix the problem. It is up to the user to decide what risks they are willing to take with their money, just like in the real world. Don’t put the blame on LL for everything, You took the chance and lost. I’m sorry but its not like LL forced you to invest in Ginko or any other company or bank that failed or was shown to be a fraud. Yes I lost money in Ginko, but I sucked up and moved on. There is nothing you can do and banning banks would just screw everyone else that is still in a bank. So yeah…there is my rant.

  123. concerned says:

    Zaldar i couldn’t careless if banks are allowed in sl or not,like you say its your choice to invest or not i don’t like the double standard that illegal banking is dicouraged while people playing free play games that isnt illegal are banned.

  124. chmarr says:

    the lindens servers are like the ibm server blades with 4 sims per blade and from what i under stand theres about 30 per server cabinet thats like 120 sims per box new whole sale the blades cost just over $1800 to buy they charge a MINIMUM of $1250 per sim meaning there getting $5000 per blade so thats roughly $150,000 per rack there earning. and if theres 10,000 – 13,000 sims

    now $200 a month per sim $800 per blade = $24,000 per month per blade which = $288,000 a year from sim fee’s.
    if theres 10,000 – 13,000 sims thats around between $2,000,000 – $2,600,000 A MONTH from us which in a year is between $24,000,000-$31,200,000 from sim fees toss in all the other fees and the money being exchanged for $L a yearly $ amount of at LEAST $200,000,000 take off the wages , costs of the connections n such LL STILL makes over 100 million USD a year.

    i’ve still not added the HUGE sponsership deals from IBM , Compaq,dell,toyota,GM,nissan the list goes on and these arent any one time sponserships these are yearly


    so LindenLabs get yer house in Order before you make anymore mistakes….reinstate the developers incentive and review the gambling laws …..lottery is not gambling because the entire usa does it and that you cant deny
    start your own SL lottery and let ppl buy tickets

  125. U M says:

    HHAHAHAH IBM yea Right

  126. Nulflux Negulesco says:

    I move for LL to declare themselves a sovereign nation and we the citizens, provide us all with passports and allow us to VOTE and SUBMIT the laws which govern the ‘virtual’ world we live in.

  127. Arsheba Nasu says:

    Who are you kidding? It would be a repressive dictatorship, like it is now, but with harsher penalties for dissent.

  128. U M says:

    Well look at sl these days its getting close to it.

  129. BrightAngel Summers says:

    ok I wanna know who is the ceo of LL in the real world and who are the ones on the board of directors …names and I wanna a breakdown of the profit of secoondlife monies and what is it being spent on in other words open your acctount books as to what is going on , we are all tax payers and i think its time we find out what is going on with our money we invest in secondlife.

  130. concerned says:

    I really hope the lindens read this blog and take on some of the comments,I know every blog is full of positives and negatives but so many people i know in sl are disheartend lately,i really dont want to see sl as corprate and campers,To me it seems we are losing are freedom but at same time less protected than we have ever been.

  131. U M says:

    They don`t care if they did there would be so much bitching people these days.

  132. Arsheba Nasu says:

    We’re more than taxpayers. We’re de-facto share-holders without portfolio or representation. We’re livestock.

  133. U M says:

    Mooooooooooo Lindens money…….cash cow anyone :/


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