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
- Second Life Virtual Bank Collapses, Losses at $750K
- Second Life Sexual Genitalia Spawns Lawsuit
- Sell Your Real Home in a Virtual World