Computers, Video Games, Virtual Worlds
Virtual Banks Crumbling in 'Second Life'
Whether or not you've ever explored the typically flamboyant vistas of the virtual world 'Second Life' or have any desire to do so, the virtual community with few rules and fewer rule enforcers is still a fascinating social experiment to study from the outside. So, it's with morbid curiosity that we sit back and watch as many major financial institutions in the virtual world begin to fall to pieces.
In August of last year a very popular in-game bank went bust. Those who invested in the establishment lost a combined $750,000 in real money. This has resulted in new regulations going into effect. As of next week, unofficial virtual banks in the online destination will be banned -- any that promise interest on money received, anyhow. That's not to say all banking will be forbidden, but the fly-by-night operations that were promising double-digit returns on investments are a thing of the past. This has predictably resulted in a huge run as players are desperate to get their cash out and, like real banks, virtual ones just don't have all the cash available at any one time.
If you're wondering what the fuss is about gamers losing virtual Linden dollars in the game, it's because players can cash out their virtual currency for real dollars whenever they like, making those unrealistic interest rates look very, very appealing. Linden Lab, the company behind the virtual world, maintains detailed statistics and graphs tracking the in-game economy, and we're inclined to think that it's in for a bit of a recession in the coming weeks and months ... just like a certain other economy we can think of.
From Tom's Hardware
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Reader Comments (Page 1 of 1)
rjs said 3:44AM on 1-18-2008
There is no banking crises. None at all for most educated people that realize that ponzi scheme so called banks are no more than scams. Most understand that you are simply giving your L dollars away to another persons avatar. And as such, whom would give their money to a another avatar?
Answer is simple. The majority of SL users do not. And many like myself believe that not only have we been asking for the fraud to stop in SL, but that Linden is making wise decisions in the best interest of the users.
The fact is, all this crises garbage, especially from a site like Tom's Hardware is just silly.
The only crises is the fraudsters trying to repay
the very small fraction of idiot users in SL that
gave their L dollars to them. No crises whatsoever for 95 percent of those that use Second Life.
Most get their L dollars from Linden. Most know that their Linden is just as safe in their own accounts as it would be in the account of someone else. It's just stupidity.
No need for banks in SL. None. Not an ounce of necessity to need even legitimate banking in SL.
--rjs
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