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SecondLife Bans Unregistered In-World Banks

timothy posted more than 6 years ago | from the it-all-seems-a-bit-fictional dept.

The Almighty Buck 353

GuruBuckaroo writes "Virtual Ponzi schemes — pardon, "Banks" — have finally been given the boot by the policymakers at Linden Lab's Second Life. According to the company's latest blog post: 'As of January 22, 2008, it will be prohibited to offer interest or any direct return on an investment (whether in L$ or other currency) from any object, such as an ATM, located in Second Life, without proof of an applicable government registration statement or financial institution charter. We're implementing this policy after reviewing Resident complaints, banking activities, and the law, and we're doing it to protect our Residents and the integrity of our economy.'"

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good time to become a loan shark (0)

LiquidCoooled (634315) | more than 6 years ago | (#21973342)

its a good time to become a loan shark.
Big Tony is already making a killing with his interest rates.
I've heard that if you don't keep up with your repayments, they will break your ARM or hit you so hard it fragments your memory.

Re:good time to become a loan shark (0)

yada21 (1042762) | more than 6 years ago | (#21973464)

All bank's should be forced to adhere to the gold standerd, because it has intrinsic value.

Re:good time to become a loan shark (5, Interesting)

eebly (7752) | more than 6 years ago | (#21973710)

First, a minor point, banks don't issue money (they used to but that creates undesireable barriers to trade) and thus making banks adhere to the gold standard is meaningless. Governments make currency standards.

Second, gold doesn't have intrinsic value at all. The value of gold fluctuates all the time. All the gold standard did was fix the price of gold. While the gold standard was tenable for a time it didn't work in the long run because it's not stable. Your money supply is dependent on your gold supply which in turn limits your economy. You can't have more dollars than your fixed ratio to gold. New discoveries of gold can also create deflationary shocks.

There's nothing special about money at all. It's a medium of exchange. It has what value we agree it has, no matter if the medium is a piece of paper or a string of bits or a hunk of metal.

Re:good time to become a loan shark (1)

eebly (7752) | more than 6 years ago | (#21973790)

Err, that should be inflationary shocks. D'oh.

Re:good time to become a loan shark (4, Interesting)

LilGuy (150110) | more than 6 years ago | (#21974372)

The only intrinsic value it has is it's perceived rarity and the fact that you can't just pull it out of thin air. There is no way anyone can go back to the gold standard with the WTO in existence, but that doesn't mean we shouldn't try to find a way to make the currency system actually work.

The way it's set up now every country in the world is gunning for bankruptcy in the end. You can't sustain a system of constant debt growth forever. We need to find something to base money on that isn't a commodity controlled by the few and also isn't debt. Or we can just continue to fight wars and reforming nations and start over every time the debt ceiling is too high.

In regards to the article, I find it hilarious that you can't even run a virtual bank without a real life charter. That just slays me. I think the line between virtual and real just blurred beyond recognition.

Re:good time to become a loan shark (2, Insightful)

encoderer (1060616) | more than 6 years ago | (#21974636)

1. Fiat currency isn't based on debt growth. The US has a debt because we sell treasury bonds (t-bills) to bring more money into the country from foreign sources (largely, lately, China)

2. Adam Smith solved this problem about 300 years ago... Tell me: What is China going to do with that money except buy things from us? Fiat currency is only valuable if you spend it. The doomsday scenarios people here love to espouse where China intentionally devalues the US dollar make absolutely no sense. They simply wouldn't be in Chinas best interest.

3. Fiat currency really works remarkably well. It's based on the potential of an economy, not the potential of the gold supply. Just use right now as an example.

People here lament the weak dollar. But everything pushes and pulls until it's all back in balance... As the dollar weakens, American-produced products are more affordable overseas. So, they purchase more of our products, which puts more Americans to work and increases American GDP. This results in the dollar rising in value. It will continue to rise until American products become too expensive, which depresses demand for American goods, which causes the dollar to stabilize or weaken again, and the cycle continues...

Re:good time to become a loan shark (4, Funny)

XenoPhage (242134) | more than 6 years ago | (#21974600)

Second, gold doesn't have intrinsic value at all. The value of gold fluctuates all the time. All the gold standard did was fix the price of gold. While the gold standard was tenable for a time it didn't work in the long run because it's not stable. Your money supply is dependent on your gold supply which in turn limits your economy. You can't have more dollars than your fixed ratio to gold. New discoveries of gold can also create deflationary shocks.
We could always go on the Golem Standard. As I understand it, there are only 4,000 chem-free golems, all currently buried just outside of Ankh Morpork. It is extremely unlikely that any more will ever be found as the original creators, the Um, mysteriously disappeared.

Re:good time to become a loan shark (0)

Anonymous Coward | more than 6 years ago | (#21973716)

Really?

What is the intrinsic value of gold?

Given that value, is there enough gold in the world to back the value represented by the modern economy? (Hint: No)

Re:good time to become a loan shark (1)

yada21 (1042762) | more than 6 years ago | (#21973732)

Unlike fiat currency's, its shiny and you can't print it.

Re:good time to become a loan shark (2, Insightful)

KublaiKhan (522918) | more than 6 years ago | (#21973976)

The word you want is 'currencies'--and aluminum is just as shiny. 'matter of fact, at one point, aluminum (or 'aluminium' for our foreign friends) was worth -more- than gold.

In the end, currency is only worth what people agree it is worth. It bears repeating: Currency is only worth as much as someone else will give you for it. It's a symbol--it's like a variable, as it were.

I find gold to be more or less worthless in my life, save only as a plating agent for electrical contacts. I don't see any reason why a currency should be based on something that's pretty much useless outside the electronics and jewelery industries. If you want to base a currency on something intrinsically valuable to a large number of people, how about, say, fresh water? Sure, it's not worth that much, but if you don't have it you'll certainly notice it.

Do not mistake the symbol for the thing. Currency of any sort--even gold--is only a symbol for a certain amount of a product or service that you can trade it for with someone else.

Re:good time to become a loan shark (2)

superwiz (655733) | more than 6 years ago | (#21974196)

What is the intrinsic value of gold?
You see you are looking for an axiomatically based discussion here. There is a number of theories. But the test of any theory is practice. Regardless how the intrinsic value of the gold can be philosophically shown, the fact remains that under gold-based currency money does not lose value. Under government-promise based currency (fiat) money ALWAYS loses value. So people are constantly lose their savings under no-gold currency standard. That's just how it's always been. Why would you assume that it is any different now?

Re:good time to become a loan shark (2, Insightful)

KublaiKhan (522918) | more than 6 years ago | (#21974482)

I must disagree. There are any number of ways in which a 'gold-based' currency could be rendered completely valueless, not the least of which (but the one that would make the best movie, in my opinion) would be the forcible removal of said gold from whatever repository it was being held in. In addition, the currency will be a fiat currency de facto in that it will be the world of the government in question (or organization, if it is a non-governmentally issued currency) that:

A) There is enough gold to 'cover' it (because really, how can you be -sure- that there's really a dollar's worth of gold in there?) and

B) Said currency or gold will be accepted as a valid form of payment by anyone within the country. Fiat currencies are at least honest about this: there are various laws on the books that state that the currency is to be considered valid payment for debt. Legally, in the US, I must accept a dollar as valid payment; I need not accept any amount of gold as payment, as there is no legal requirement that I do so--I might choose to deal only in platinum, or iridium, or some schist or other.

Re:good time to become a loan shark (1)

Doc Ruby (173196) | more than 6 years ago | (#21973872)

What is the intrinsic value of gold?

Re:good time to become a loan shark (2, Insightful)

R2.0 (532027) | more than 6 years ago | (#21974614)

"What is the intrinsic value of gold?"

The value is based on the the belief of the millions of idiots that spout the line about "intrinsic value of gold" - it's effectively self sustaining.

Re:good time to become a loan shark (0)

Anonymous Coward | more than 6 years ago | (#21974008)

I couldn't agree more! Inflation will be the end of us!

Re:good time to become a loan shark (1)

Bartab (233395) | more than 6 years ago | (#21974152)

Really? You can eat gold? What intrinsic value does gold have? Oh right, it's rare, and somewhat "pretty" although not really all that rare and pretty is such a personal definition. Lots of things are rare.

Let's instead move to the Uranium-235 standard, or better yet, the joule.

Re:good time to become a loan shark (0)

Anonymous Coward | more than 6 years ago | (#21974568)

I believe the words you are looking for are: "it's rare, and very shiny!"

Re:good time to become a loan shark (0)

Anonymous Coward | more than 6 years ago | (#21973690)

That Bytes! You would think that they would accept payments in a First-In-First-Out fashion, where the older people in the Queue would have to give up their Cache. I was Off-By-One dollar, and my loanshark still created a Breakpoint in my leg. Variable.

Greedy bastards (0, Troll)

Killer Instinct (851436) | more than 6 years ago | (#21973354)

Greedy bastards....guess who makes the $L now, fool.

wait.. what? (0)

Anonymous Coward | more than 6 years ago | (#21973360)

News for nerds, stuff that matters.

Re:wait.. what? (0, Offtopic)

provigilman (1044114) | more than 6 years ago | (#21974174)

See, you're making a common mistake... If you look at the banner at the top, it's actually two separate statements, "NEWS FOR NERDS. STUFF THAT MATTERS.", there's no comma in it like yours.

This means we can have situations that satisfy the first condition (news for nerds), but not the second (stuff that matters). This story is merely just a prime example of that exact phenomenon.

Out of control (0)

Anonymous Coward | more than 6 years ago | (#21973370)

What is the point of having a Second Life if your stupid First Life keeps intruding?

That should've been done day one. (5, Insightful)

Khyber (864651) | more than 6 years ago | (#21973418)

LL should have had exclusive control over their currency and the exchange thereof to begin with. Allowing other parties to do this for them was an open invitation for them and their users to get shafted.

Morons.

Re:That should've been done day one. (5, Interesting)

archen (447353) | more than 6 years ago | (#21973572)

It is however interesting how Second Life started out as this sort of free for all, and more and more it's starting to evolve a government out of necessity. There are many institutions that a person may think are not really needed by society, yet we see that online civilizations seem to reinvent the same things. Also interesting that this "government" has already stomped on people, and people already bitch about it. Seems like second life is getting too much like the first one.

Re:That should've been done day one. (1, Funny)

Anonymous Coward | more than 6 years ago | (#21973758)

I think we need to make a Third Life, the Second Life stuff is becoming too my like a second job...

Re:That should've been done day one. (1)

torkus (1133985) | more than 6 years ago | (#21974012)

Haha. Yes, it's funny how much of what they're doing mirrors what "real" government does.

However there's one big difference. In SL, there's anonimity. There is no recourse. There is no sort of court or penalty available.

In RL (actual society of a mythical better one i dream about) you would be a lot less anonymous in running a bank or "bank". Even without banking laws and WITH a simple "responsibility" law you'd still be stuck paying back the money or working it off.

I don't think comparing SL and RL is apples to apples. It does, however, offer some interesting insight to human behavior in a situation with zero long-term accountability and (more or less) the ability to remain entirely anonymous.

Re:That should've been done day one. (1)

jellomizer (103300) | more than 6 years ago | (#21974426)

While it is not Life or death there the consequence is the Game loosing popularity due to to much chaos to be fun. While Real Life the goal is to survive in second life the goal is entertainment if that is loss it is equlivlant to death in the real world.

Re:That should've been done day one. (2, Insightful)

flanksteak (69032) | more than 6 years ago | (#21974154)

It is however interesting how Second Life started out as this sort of free for all, and more and more it's starting to evolve a government out of necessity.

Yes, the fantasy of the Ayn Rand unregulated perfect market always comes crashing down when human nature gets involved.

As much as people hate to admit it, regulation is a necessary part of society. You just have to hope for the right balance. Too little is chaos, too much a police state.

Re:That should've been done day one. (1)

Threni (635302) | more than 6 years ago | (#21974252)

> As much as people hate to admit it, regulation is a necessary part of society.

That is to say, humans appear to be unique in requiring it. Perhaps you just can't kill enough people or cause enough damage to the environment without it. Gotta love those handy digital watches, though, so it's not all bad news.

Re:That should've been done day one. (1)

wpiman (739077) | more than 6 years ago | (#21974448)

Well, if people get burned- word gets around. This little problem would have resolved itself. Who is going to put money into a bank with a bad reputation.

Re:That should've been done day one. (1)

veganboyjosh (896761) | more than 6 years ago | (#21974650)

I think the point is that with a Ponzi scheme [wikipedia.org] , the bank doesn't get the bad reputation until people have put their money in.

Re:That should've been done day one. (1)

garylian (870843) | more than 6 years ago | (#21974176)

Your observation is quite correct.

It is a combination of "keyboard courage" that comes with being effectively anonymous, and the fact that most humans will treat other humans poorly if they think they can get away with it.

Rules help make a society, even a virtual one. Without those rules, everyone is prey.

It just goes to show you that the old addage is still strong: If something seems too good to be true, it probably is.

Re:That should've been done day one. (2, Interesting)

gnuman99 (746007) | more than 6 years ago | (#21974610)

Not in EVE. Not in EVE.

As long as you don't exploit game bugs to exploit others, you are ok.

Re:That should've been done day one. (2, Insightful)

ergo98 (9391) | more than 6 years ago | (#21973838)

Allowing other parties to do this for them was an open invitation for them and their users to get shafted

No, it's an open invitation for there to be gaming because it's a game.

Re:That should've been done day one. (0)

Anonymous Coward | more than 6 years ago | (#21974046)

This is just how America does it, they give over the control to PRIVATE banks, The Federal Reserve is a PRIVATE bank, nothing FEDERAL about it. Same applies to the IRS.

This just mirrors reality. Everybody that forseen this warned you all about this but nobody listened now you are controlled by a crime syndicate.

Re:That should've been done day one. (0)

Anonymous Coward | more than 6 years ago | (#21974054)

No, the problem is in the use of the term "currency". Linden Labs have been very, very guilty in their schizophrenic approach: on the one hand, their terms of service quite clearly state that the game tokens ("Linden Dollars") have no financial value; on the other hand, they have profited massively from acting as a central banker for these game tokens.

Unfortunately, it would appear that LL's motives here aren't to underline the game token nature of Linden Dollars. Rather they want to appear to be regulating their "virtual economy", and making it appear *more* like an economy and *less* like game tokens.

The most likely outcome is that a new game arrives and there is a sudden population outflow from Second Life, resulting in the exchange rate for Linden Dollars (which has been stable for a while now) suddenly collapsing. Thinking of some dotcom stocks which, between 2000 and 2001 dropped from $100 to 10c per share, there is no reason why Linden game tokens shouldn't drop just as far, and much faster.

Using a small amount of real money to buy Linden game tokens which you spend for your entertainment is entirely reasonable. Transferring a substantial amount of real money into the game in the hopes of making a return, be it as a "property speculator" or some other form of "investment" is utter, utter stupidity.

Re:That should've been done day one. (1)

_KiTA_ (241027) | more than 6 years ago | (#21974362)


LL should have had exclusive control over their currency and the exchange thereof to begin with. Allowing other parties to do this for them was an open invitation for them and their users to get shafted.

Morons.


Much like us Americans and our Visa, Mastercard, and small problem with Banks (Sub-prime mortgage, anyone)? We've let other parties value our money for ages -- after all, if a credit card company can add 30-40% interest (in the name of "fees" and crap like that), how's that different then them changing the value?

Seems like LLs aren't the only morons on the block.

Re:That should've been done day one. (1)

EdelFactor19 (732765) | more than 6 years ago | (#21974498)

no they shouldn't and they still shouldn't. people refuse to take personal responsibility for being stupid that is the problem. What you are suggesting is exactly the kind of complaint everyone makes at mmorpgs that refuse to let people sell their accounts and goods for $. I dont care who it protects all this does is restrict your freedoms. You should be able to do whatever you want with your money; just like with ebay if cooks are dumb enough to pay 100 L$ for a coupon for 1 L$ then that is their problem.

I understand the fraudulent atm thing; but it sounds like the real problem was that there werent any 'REAL' banks. That and the fact that people don't bother to check the things for certificates or anything like that.

you know of course what this also means? the next step will be the us govt taxing people on second life income even if it never leaves the game. I'm really not sure what I think of this one.. and are people going to circumvent it by not promising a return but alluding to one? also this seems to kill off iou's and tips and loans from anyone but banks which again I dont like.

im sure people will circumvent this one way or another; join my club for X dollars and if you leave in a year we will refund you your money and give you some extra for trying us out...

i compare this to real life; do you deposit your money into shady looking atm's that dont operate and appear unlike one from a bank? probably not. but if you're one of those people who cashes their checks at supermarkets and pays out the percentage I guess you wont have to learn better now about what you blindly do with your money.

NNEEEEEEEEERRRRRRDDDD (0)

Anonymous Coward | more than 6 years ago | (#21973420)

need i say more ^

Film at 11 (0)

Anonymous Coward | more than 6 years ago | (#21973440)

clinging to relevance like a life raft

Virtual Trust? (4, Interesting)

blueZhift (652272) | more than 6 years ago | (#21973452)

The thing that I have trouble conceiving of is how people could trust these virtual banks/investment schemes in the first place, especially since there's real money involved. I find Second Life interesting, but like the internet, it's still a bit of the wild west. I barely trust my real world bank to do the right thing with my money, to say nothing of trusting some virtual bank.

Re:Virtual Trust? (4, Funny)

Nimey (114278) | more than 6 years ago | (#21973692)

int counter;
for (counter = 0; counter < 100; counter++) {
  sprintf ("People are stupid.");
}

Re:Virtual Trust? (4, Funny)

Entropius (188861) | more than 6 years ago | (#21974030)

Don't you mean printf rather than sprintf?

Re:Virtual Trust? (0)

Anonymous Coward | more than 6 years ago | (#21974396)

Apparently the comment also applies to the poster.

Re:Virtual Trust? (0)

Anonymous Coward | more than 6 years ago | (#21974654)

No, he's just being recursive

Re:Virtual Trust? (4, Interesting)

DrXym (126579) | more than 6 years ago | (#21973910)

The thing that I have trouble conceiving of is how people could trust these virtual banks/investment schemes in the first place, especially since there's real money involved.

There's a simple answer to that. People are stupid. They think that money grows on trees and all they have to do is give it to some virtual "bank" and they'll enjoy some staggering rate of return. In truth it is the idiots who follow on behind who are paying the interest for the ones in front.

I expect SL has become very popular with con men for this reason. Wouldn't surprise me at all if all sorts of ponzi schemes, pyramid scams, matrix scams, and just plain old fashioned fraud happen every day on SL because there is so little regulation and a lot of gullible people within easy reach.

Re:Virtual Trust? (1)

Conspiracy_Of_Doves (236787) | more than 6 years ago | (#21974518)

In SL, it does grow on trees.. literally.

Or at least it does for new joiners.

Remember kids... (3, Interesting)

Bones3D_mac (324952) | more than 6 years ago | (#21973470)

The "virtual" in virtual worlds means it isn't real. Once you leave the bounds of the physical world here on earth, you're in uncharted waters. After that, you might as well be living in the old west where the only justice you get is the justice you take.

The crooks may still wear black, but they pack all new weapons now.

Re:Remember kids... (0)

Anonymous Coward | more than 6 years ago | (#21974042)

Who run Bartertown?

Re:Remember kids... (4, Funny)

Cro Magnon (467622) | more than 6 years ago | (#21974106)

It's even worse than the Old West. Back then, you could shoot a swindler and he'd stay dead.

free advertising? (2, Insightful)

Anonymous Coward | more than 6 years ago | (#21973580)

I have never, EVER, met a person who 'plays' this game, I am probably the only one in my circle who has even heard of it, and I only hear about it here on slashdot.

Re:free advertising? (5, Funny)

boristdog (133725) | more than 6 years ago | (#21973656)

I have never, EVER, met a person who 'plays' this game, I am probably the only one in my circle who has even heard of it, and I only hear about it here on slashdot.

My sentiments exactly. And I work with hundreds of nerds/engineers/etc.

All of the people I know seem to have first lives.

Re:free advertising? (0)

Anonymous Coward | more than 6 years ago | (#21973938)

I have never, EVER, met a person who 'plays' this game, I am probably the only one in my circle who has even heard of it, and I only hear about it here on slashdot.
You probably do, they just don't admit it. :-)

Re:free advertising? (0)

Anonymous Coward | more than 6 years ago | (#21974186)

http://www.getafirstlife.com/ [getafirstlife.com]

Re:free advertising? (0)

Anonymous Coward | more than 6 years ago | (#21973916)

congratulations, you're out of touch!

Weirder (0)

Anonymous Coward | more than 6 years ago | (#21973962)

I agree with everything you say, and further, it seems to be a place inhabited by people with bizarre and even illegal sexual tastes. Somehow, this is a substitute for the activity (which I suppose is a good thing, ultimately).

But between the way the owner and his wife run the thing, the people who dress up their avatar in animal clothes, and the illegal sexual tastes, it gives me the creeps.

Really. Stay far far away.

Run on the banks? (4, Insightful)

jorghis (1000092) | more than 6 years ago | (#21973606)

Of course what really just happened is that they have triggered a massive run on the banks now. Is it better to wait for all the different banks to fail or ban them causing everyone to withdraw their money at once? You are giong to see every bank going the way of Ginko in the very near future now. (even that tiny minority that wasnt offering ponzi scheme style interest rates)

Re:Run on the banks? (1)

shentino (1139071) | more than 6 years ago | (#21973764)

My guess is the bad news probably makes BORROWERS feel like they can screw the bank.

A big part of any bank's assets are Accounts Receivable, meaning the bank has loaned money out and is to get paid back with interest.

Banks fail when their depositors get impatient, sue, and in the process give borrowers the impression they can screw the bank and not pay up.

Ask yourself this...

If a bank goes bye bye, what happens to all the people who OWE THE BANK?

Re:Run on the banks? (1)

zippthorne (748122) | more than 6 years ago | (#21974256)

Their loans get bought out by other lenders and the proceeds are used to repair the depositors. Since not all of the money is recoverable, the depositors still don't get everything back, but they can expect to get *something*.

Re:Run on the banks? (1)

shentino (1139071) | more than 6 years ago | (#21974376)

That's exactly what I mean.

Loans get bought at bargains because it's a distress sale.

Sorta the reason you drop your prices quickly on perishable goods.

If I know you MUST sell, I really have plenty of incentive to lowball you all I like and there's not a thing you can do about it unless there's competitors.

Re:Run on the banks? (1)

Henry V .009 (518000) | more than 6 years ago | (#21974554)

No, that wasn't exactly what you meant. If your loan gets bought, even at a bargain, you still owe exactly the same amount of money. And stop with the crappy font. If you really need the attention, start a blog.

Second Life ... (0, Troll)

Archangel Michael (180766) | more than 6 years ago | (#21973616)

... for those that failed in the first one.

I must be getting old, I'm sounding like the people I despised when I was younger.

can somebody please explain (0, Flamebait)

gonar (78767) | more than 6 years ago | (#21973640)

what the hell the purpose of second life is, and why the hell I should care?

it's just another MMORPG but without any of the redeeming features of evercrack or WOW (i.e. dressing like a mideval elf and killing trolls)

maybe I'm just dumb, but really, what is the purpose?

Re:can somebody please explain (0)

Anonymous Coward | more than 6 years ago | (#21973742)

Virtual sex with virtual Furries?

Re:can somebody please explain (1)

Dmala (752610) | more than 6 years ago | (#21973972)

There really is no purpose, that's kind of the point. It's a giant virtual sandbox that you can do pretty much anything in. I personally wouldn't spend any kind of money on it, but it's interesting in small doses just to cruise around, chat with people, and see all of the interesting, cool, weird, and stupid things people build.

You're not dumb (0)

Anonymous Coward | more than 6 years ago | (#21974134)

It has kind of an interesting 3D design system, which makes pretty much any 3D art project basically a puzzle: How can you make a good facsimile of a 3D object using as few "basic design units" as possible, combined with texturing, and scripting.

But since that's really the only fun part, and they give that away for free, and you have to do it in a shared space where people can just pop in and annoy you from time to time.. (you can pay extra to avoid the communal area, but you only reduce the annoyance, and it looks like you actually get less modeling capabilities.)

Every 8 months or so, I log in to see if it still sucks (because it's free and after 8 months I forget how awful it is, and there's usually a slashdot article about how great supposedly supposed to be). Last time, it was *filled* with floating, talking phalluses that lock on and follow people.

Why Second Life is the Greatest MMOG Ever (1)

Chris Burke (6130) | more than 6 years ago | (#21974246)

This video [google.com] explains all.

Warning: Prob. NSFW due to flying penis attack (1)

Chris Burke (6130) | more than 6 years ago | (#21974302)

Giving away my own punchline here, but hey, you still gotta admit it's something you can't do in WoW.

Re:can somebody please explain (1)

Ambiguous Puzuma (1134017) | more than 6 years ago | (#21974436)

The world is scriptable by the end user. That sets it apart from other graphical MMORPGs, and should make it of interest to a portion of the Slashdot community, particularly those that may have enjoyed the scripting aspect of text-based MUDs.
https://wiki.secondlife.com/wiki/LSL_Portal [secondlife.com]

Just like the real world.... (2, Insightful)

wpiman (739077) | more than 6 years ago | (#21973652)

In the US, the Federal Reserve has the right to create money out of thin air. They don't want anyone encroaching on that power. In SL, Linden has the power. They should be cracking down. Both worlds need some hard currency in my opinion.

Excessive charge for participation in economic sys (1)

FromTheAir (938543) | more than 6 years ago | (#21973900)

It's time to update the world's financial and monetary systems to reflect the advanced and new capabilities of technology. No longer should a small private group charge excessive fees for the use of their monetary system, subject to being manipulated to artificially extract wealth by those not actually making a value contribution to the other participants. We should also allow competition in providing monetary system services it is currently a monopoly.

Re:Excessive charge for participation in economic (1)

Stentapp (19941) | more than 6 years ago | (#21974160)

Ripple [sourceforge.net]

Money Laundering..... (1)

BigDogDoug (1216184) | more than 6 years ago | (#21973694)

This whole think makes me wonder if criminals are using these places to launder money?

Re:Money Laundering..... (1)

German_Dupree (1099089) | more than 6 years ago | (#21973998)

This whole think makes me wonder if criminals are using these places to launder money?
Ahhh yes, I'm betting that there are hundreds of genius crooks out there who are converting loads of real-world money for digital crap. Seriously, I doubt that anyone intelligent enough to steal and not get caught is too stupid to use other, more effective forms of cash laundering.

Re:Money Laundering..... (1)

qbzzt (11136) | more than 6 years ago | (#21974092)

Probably not. Linden Labs can easily keep track of the sources of money that is used to buy their currency.

Re:Money Laundering..... (1)

jandrese (485) | more than 6 years ago | (#21974212)

Well, free accounts have pretty low limits on the amount of money you can purchase/sell in a month, so unless you're interested in laundering your money $20 at a time I don't think it's going to work very well. Plus, LL keeps records on all of those transactions so it's not a very good laundering service.

Re:Money Laundering..... (0)

Anonymous Coward | more than 6 years ago | (#21974332)

Well I'm sure that he was commenting on that fact that criminals will find anyway they can to launder money. So the potential is there....

pointless (0)

Anonymous Coward | more than 6 years ago | (#21973698)

I'm just as geeky as the next guy, and all for varied forms of entertainment, but SL just strikes me as an incredibly pointless waste of time. Kind of like posting to slashdot as an AC.

Let's see if real banks move in (3, Insightful)

Animats (122034) | more than 6 years ago | (#21973708)

Being a bank in Second Life isn't very attractive to real banks, because they can't create money in Second Life, like they can in the real world.

Re:Let's see if real banks move in (1)

Ed Avis (5917) | more than 6 years ago | (#21973936)

Why not? A bank could take deposits of 100 virtual groats and make interest-paying loans of 90 virtual groats, keeping 10 virtual groats in the vault for cash withdrawals. As long as not all the savers want to withdraw their money at once, the bank can keep running and has created 90 virtual groats of money. If the savers are in a delayed access account (e.g. 60 days notice) then the bank can call in loans if needed and so will always be able to meet its obligations provided not too many of its loans go bad.

However I don't know if there are bailiffs, debtors' prisons and so on in Second Life, so getting repayment of a loan could be tricky.

Re:Let's see if real banks move in (1)

gstoddart (321705) | more than 6 years ago | (#21974148)

Being a bank in Second Life isn't very attractive to real banks, because they can't create money in Second Life, like they can in the real world.

In what way can a bank "create" money in the real world?

They can't issue or print money. All of their assets are actually based on real world assets. They may use the deposit you have registered with them to underwrite other transactions, but I don't get the sense they can just "create money".

Am I missing something here? If banks could just create money, our economies would have collapsed a long time ago.

Cheers

Re:Let's see if real banks move in (0, Flamebait)

EggyToast (858951) | more than 6 years ago | (#21974458)

This is just the Ron Paul crazies out in force that their guy sucked in NH last night.

Re:Let's see if real banks move in (0)

Anonymous Coward | more than 6 years ago | (#21974588)

Yes they can. Look up "Fractional Reserve Banking" and watch a little movie called "Money Masters" (look it up in Google Video)

The point Ron Paul (and his rabid supporters) are trying to make is that the system in real world is broken, but the masses voting in the US are too stupid to figure it out.

As it works today, when a bank loans you money, that paper (saying you pay back X$) is as good as money for the banks - so essentially by offering loans, they are printing money to the tune of the amount they loan to you. They keep the interest, they don't actually have to have the money they loan to you - all thanks to the great Federal Reserve Banking system...

Educate yourself.

Re:Let's see if real banks move in (1)

ericrost (1049312) | more than 6 years ago | (#21974666)

Don't buy into the voodoo bullshit supply side economics that your saint Reagan spoon fed you in your high chair. The reason our system is broken is EXACTLY that belief. The fact is, and always will be, the ONLY thing that creates money is a value added process performed on a raw material or commodity.

PERIOD.

Everything else is a middle man taking a cut and screwing either the seller, the buyer, or both.

So, educate yourself past asking if you'd like fries with that, and don't believe ANYTHING that the only reference you have is GOOGLE VIDEO you fucking moron.

secondlife must be the most hyped concept ever (2, Insightful)

jacquesm (154384) | more than 6 years ago | (#21973712)

Anybody that converts real world assets to virtual ones deserves what they get. Seriously, what's on your mind when you convert your hard earned cold cash into bits in some virtual world ?

Don't you have a better way of spending your money ? Most fads on the internet I can sort of understand what they're about and what their 'pull' is but second life is one step too many for me to follow.

Re:secondlife must be the most hyped concept ever (0)

Anonymous Coward | more than 6 years ago | (#21974076)

"Seriously, what's on your mind when you convert your hard earned cold cash into bits in some virtual world ?"

As a philosophical point, how real is the cold, hard cash you have in your hand now? I mean, its value is totally made up. It's real as long as the social structure that created it is still around and working properly.

Re:secondlife must be the most hyped concept ever (0)

geminidomino (614729) | more than 6 years ago | (#21974140)

Anybody that converts real world assets to virtual ones deserves what they get. Seriously, what's on your mind when you convert your hard earned cold cash into bits in some virtual world ?
Answer: "500 Xbox live points!"

Disclaimer: This is snark. I don't buy XBL points, Wii points, digital magic swords, or e-books.

Re:secondlife must be the most hyped concept ever (2, Insightful)

PrimalChrome (186162) | more than 6 years ago | (#21974510)

Anybody that converts real world assets to virtual ones deserves what they get. Seriously, what's on your mind when you convert your hard earned cold cash into bits in some virtual world ?

Let me take a stab at this....
Ever bought software? Were you paying for the disc or the code?
Ever gone to see a movie?
Ever paid to do something or experience something?
Ever exchanged hard earned cold cash for a service?

Paying for intangibles that result in your enjoyment is something everyone does on one level or another.

Doing the same in the Real World (1, Interesting)

FromTheAir (938543) | more than 6 years ago | (#21973772)

Interest should be replaced with some sort of dividend return. Or nothing, if you pay back something you get to borrow more interest free. So you can only borrow a little bit starting out building up reputation.

When borrowing we are really making a commitment to produce goods or services in the future. Interest can be looked at as a tax on participating in the economic system or what they charge us (at least at the first tier) for the use of the monetary system they maintain.

Banks do several things. Track transactions, create GL entries to produce new money out of nothing, attempt to recover bad debt, asses and evaluate risk.

For doing these few things they collectively generated over, the last 3 years over a trillion dollars in NET profit.

The current cost or charge for contributing to the economic system in the US is about 6% of each dollar. Obviously the real cost is less than half a percent thanks to technology.

It is time for the public to own the monetary system and pay third parties to provide the above services taking advantage of technology.

Obviously we don't really need bank buildings anymore, just some data centers, and home PC's to support the whole system.

Thanks to the Internet and Technology the worlds Monetary and Financial systems are outdated and no longer needed so we don't need to pay 6% of the wealth we generate to the bankers.

More like .5% should be enough to support our Monetary system.

Re:Doing the same in the Real World (1)

meringuoid (568297) | more than 6 years ago | (#21973946)

Thanks to the Internet and Technology the worlds Monetary and Financial systems are outdated and no longer needed so we don't need to pay 6% of the wealth we generate to the bankers. More like .5% should be enough to support our Monetary system.

I find your ideas intriguing, and would like to borrow money from you at the rate of interest you propose. You are offering to lend at that rate, right?

Re:Doing the same in the Real World (1)

Ambiguous Puzuma (1134017) | more than 6 years ago | (#21974608)

Maybe 0.5% will work if you can find a way to drop the inflation rate to zero (and keep it there).
Good luck with that.

Entropia Universe (1)

uigrad_2000 (398500) | more than 6 years ago | (#21973794)

For those of you who want to invest real capital in cyber-world banks, you can still do it at Entropia Universe [projectentropia.com]

Last year, 5 banks opened up in Entropia Universe, each with a minimum of $100,000 capital for making loans. You can check your in-game items into a safety deposit box at such a cyber-bank, and receive a credit line (in real dollars), using the in-game item as collateral.

Each bank is sanctioned by MindArk (the software company that made the game), and is allowed to set any policies that they want regarding interest rates, etc. MindArk auctioned off the 5 licenses for these banks for a total of $404,000 in May of last year. [marketwire.com]

I enjoy mixing my gaming life with my real life, but this has gone a little too far for even me.

First They Came for the Gaming... (3, Insightful)

Nom du Keyboard (633989) | more than 6 years ago | (#21973890)

First it was the gaming.
Now it's the banks.

What good is 2L if you can't virtually explore the things there that aren't possible, safe, legal, or some combination of all of these virtually? I don't need every part of my life to have training wheels.

So how long before virtual sex entirely is gone too?
Followed by avatars who are too sexy, or provacative.

2L was a place were you could learn life lessons by being stupid. Now it seems intending to become one of the more restrictive Middle East countries instead.

Job Opportunity! (2, Funny)

Brett Buck (811747) | more than 6 years ago | (#21973896)

Does this mean I can get a new simulated job as a simulated chartered accountant or simulated banking regulator! Oh goody, where do I sign up?

          Brett

SL Imitates FL (4, Insightful)

Doc Ruby (173196) | more than 6 years ago | (#21973924)

That's more like a law of government than like a law of nature.

We're seeing the exact process by which people create governments to protect our rights. Since SL already had what was equivalent to tribal and voluntary governments, we are seeing something much like the process SL'ers learned about in history.

Why should a virtual bank require government reg? (0)

Anonymous Coward | more than 6 years ago | (#21974024)

While I'm sure it's the most expedient solution, I don't understand why a virtual bank should be required to get government certification or whatever in order to operate. It's not like, say, an American bank is required to be regulated by the Chinese government in order to deal in yuan.

What this really is is a failure by Linden Labs, in general, to regulate their own world. Or perhaps more to the point, in-game regulation systems to be effective. LL is trying to create a virtual world that works a lot like the real world; well, part of the real world is regulation and law enforcement. All they're doing is foisting that job off on the real world, and basically punting on the whole issue.

This makes the Second Life economy less of its own economy, and more some sort of glorified shopping mall/theme park. Which may be the point, but it's certainly less than its billing.

hello, bank of america (1)

fawzma (1099863) | more than 6 years ago | (#21974078)

I'd like to secure a loan for $5000, in exchange I'll put up my Ashbringer as collateral. I "promise" to pay you back.

SL mimics real life (1)

MSTCrow5429 (642744) | more than 6 years ago | (#21974532)

Next thing you know, they'll be asking your place and nature of employment when opening financial accounts, trying to monitor all communications, and placing incompetent Gestapo in the airports.

Virtual Assets (1)

Danathar (267989) | more than 6 years ago | (#21974582)

People tend to laugh at Virtual "Assets" because they keep comparing it to physical items.

OF COURSE Virtual assets are not tangible real items. What they represent is effort/service on the part of somebody. When you "buy" something in Second life you are not buying a Virtual House/dress/etc, you are paying for the service/labor involved in the creation of said digital content. Looking at it in that way does not make it so cooky.

One could say when you "buy" an ebook you are not actually buying a book, but people don't lambast others as nutz for buying electronic print.

Just like real life (0)

Anonymous Coward | more than 6 years ago | (#21974698)

Second Life is becoming more and more like the real world.

Next we'll have inflation destroying the value of the L$, and Rosedale will help out by dropping L$ from helicopters.

As for it being a currency....can I trade it? Needless to say I can't see it on my interbank ECN, but is it traded over the counter somewhere except by game players? Also, I've heard these crazy stories about people putting thousands of dollars into these games to "flip" virtual property, run virtual businesses, etc. Are Linden Labs regulated? What is to stop them changing the USD/LDR rate to suit themselves? Does it float freely? Are there any stipulations in the contract about this?

Serious questions - people seem to be "investing" serious money in Second Life.
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