Protesters, a number of them not even depositors, descend on the latest SL drama.
The demise of the home-made financial system in Second Life -- outlawed by Linden Lab -- isn't anything I could hope to cover in real-time with any depth of expertise, but I started flying around the banks and exchanges tonight just because I didn't see anybody else reporting. It was sad. The largest Massive Multiplayer Online Roleplay Game of Bank was about to go down, not surprisingly, as only five months ago, the Largest Established Permanent Floating Crap Game in the Metaverse (gambling) went down. Typical was a forlorn avatar with the unfortunate name of "Slim Iwish" asking a CEO, "why is there a limit on the number of times one can try to withdraw?"
At 1:00 am SLT, as the news was spreading, a gaggle of sign-wearers began to mill around with protest posters. Some were just the usual b/tard griefers making trouble. Others were trying to drag down the name of a competitor, although all were in the same boat. Still others blamed Linden Lab. "Give us back our banks!" said one.
I flew around to what I could find in the new Search All list that was called "bank" -- and there were hundreds, even though bankers themselves said they thought there were only about ten (many of these banks were mere money trees or camping stations). Some were shuttered. Some had signs up in front of the ATMs, announcing their closure. Others were letting people take out a certain minimum withdrawal, but only 25 tries -- and they were coming up empty. Depositors arrived, bewildered. Such is the atomized world of SL, that even with a blog entry and a log-on message, many people just hadn't heard the news that Linden Lab has declared banking unlawful and will remove all prims that accept Linden transfers with a claim to generate interest.
Luke at the WSE.
Interestingly, for a field that was supposed to be full of runaway Ponzi schemers and evil pyramid fraudsters, the avatars bearing "CEO" titles over their heads, owners of the bank whose prims took the money you put in, were in fact standing at their place of business -- or former business. In a half dozen of the largest banks, I saw the owners, CEOs, and chief financial officers all standing in the foyers, putting up notices and attempting to reassure their depositors. The bling! The prim hair! One man even wore white gloves. But..For all the world, it felt like a game of "store." A lot of the bankers are just kids -- some are naive adults who were never in business in Real, but hearing them in Voice, checking out their websites, I could see some are inexperienced youths.
At the World Stock Exchange, LukeConnell Vanderverre was holding court, talking in Voice and avoiding any typed statements. He gave one of his lieutenants the order to change the visitor greeter message, that had previously hailed every avatar landing with a hearty explanation that the WSE was undergoing a 30-day "software upgrade" but the new version was going to deliver even more goodies, and a 25 percent interest bonus on accounts. Luke had Jeb wipe that out just in case; he said he was mulling over what the Lindens' message meant about stock exchanges. While the blog speaks only about banks, and real-time interest-bearing accounts, it is vague about how it will view dividends provided by the various stock exchanges that have sprung up in SL especially in the last year to fund the explosion of online virtual business and consumer purchases of land, homes, and other content.
Most people have heavy doubts that Luke is going to reappear after 30 days with anything like their deposits, but he claims he will, although there are numerous allegations against his establishment, including one from Midas, another bank/financial group I visited that said WSE had seized their assets and refused to return them -- which is why they couldn't pay out their depositors. Their ATMs were closed, and their officers began a long and complicated tale of woe -- but seemed determined to try to stay in business.
Banks in SL are truly an amazing thing -- edifices to behold! They are usually made out of steel and glass -- and in the case of Midas -- even gold. Marble of course is everywhere. The spacious foyers are like ice rinks -- it's as if nobody ever has to pay tier on these palaces. There is the finest office furniture and little intricate gadgets -- realistic phones, computers, swivelling desk chairs. The ATMS are very realistic; the graphics prepared by the finest ad agencies.
When you strip it all away, however, it's all just a prim -- a prim hooked up to a usually-anonymous avatar, who says he will give you back that money, and something extra, but you have no way of knowing if he will. These are the prims the Linden enforcers are going to delete...
In describing this chaotic scene, frankly, Linden Lab sounded like they had created a monster out of control. Ken D Linden, who I believe is the lawyer whom LL hired to deal with issues like VAT and the LindEx and banks, who was once described to me to be "like Eliot Spitzer", claimed that Linden didn't know where all the transactions were, that there were too many to determine which were banking and which were not.
This seems incredible to me, as every one of these ATM prims is labelled, with a name, and a sim location often on the object description, and of course has a 3-coordinate location on a sim. Every payment into this prim will show on the transaction record, with the time stamp, object label and sim location. It doesn't take calculus to locate the ATM prims (and they will be confiscating them or following them in some fashion) and then track within resident transactions how much is going into -- and out of them.
Shaun Altman, founder of the first stock exchange in SL, and the first publicly owned company, Cyberlands, with Tyrian of SLIB.
I talked with everyone from Shaun Altman, who had tried to buy up Ginko "perpetual bonds" with about $2000 US some weeks ago, an SLNN reporter, and various CEOs at banks to determine just how much is in these banks.
For example, Ginko was said to be holding some $200 million Lindens. On his profile, Intlibber Brautigan, owner of Brautigan and Tuck (BNT) Holdings, says he has $4.4 million on deposit, and $40 million in assets. Of course, he's done his own valuation of assets, and we know from the past how he over-valued his own building in part of the stock exchange's formation -- this is the case with many of these institutions, that they involve barter, deals among buddies, like the WSE deal, whereby Shaun was given stock in exchange for coding the exchange's web site operation.
I flew over to BCX Bank at a sim called The Rookery, which I visited long ago before banking seemed to be a big part of it -- I can remember when they had just a table and chairs in a lounge, holding a meeting about how to start businesses in SL. The bank was truly an awesome structure, like something in a large American city that had been there for a hundred years, or like something in Zurich that had been there for 500. Marble, brass, steel, gleaming everywhere...
The two proprietors, Travis Ristow, CEO and Goldie2u Vanvleck, COO, were standing nobly in the foyer of their establishment, like their colleague in other banks, trying to reassure patrons. "We have effectively ceased paying interest as of this morning," said Travis. Added Goldie2u Vanvleck, "while trying to keep folks calm and avoiding panic." They told them they weren't sure how they were going to respond, but they figured they would pull through. "Our concern today is to be here for our folks who are confused and scared," said Goldie2u. Travis said they planned to reorganize, so as to remain perfectly legal.
Goldie said they hadn't been involved in gambling, and so the gambling ban hadn't affected them. Travis said that he thought mortgages for land would still be allowed, and possible loans, because payment of a service fee wouldn't be considered related to banking/interest -- but this remains to be seen, and of course LL will have the discretion to rule on this as they may.
I spoke next with Arbitrage Wise, who felt SL CAPEX would weather the storm. Dropping into Capex, I saw that it appeared to be experiencing the largest gathering of avatars trying to get money out -- possibly because Arbitrage has earned something of a reputation as being more honest than the other bankers, having battled with them in various skirmishes, and people may have switched to his bank. I gazed across the expanse of black marble floor and the signs about the crashed ATM servers not working. Arbitrage was reaching the point of exhaustion explaining that they were doing what they could, but it was in the wee hours in his time zone and he had to crash. "Just remain calm and trust us," he said before logging off.
A girl with a tail and long flexihair kept tossing it back and forth and listening to the gossip, and a red-head in slave silks said she was glad she had only put in $50 in this bank, but had thousands in the exchange. It wasn't long before she began to offer her services to anyone who was "tense" from the banking drama.
It was typical SL -- sensing a green-dot cluster, a gaggle of griefing script kiddies showed up to make the usual stupid sound clip annoyances and dumbass movie sayings, and to say LOlZ a lot.
Trust Spin Martin to TP in immediately when I said history was being made, telling me he had registered lulzsphere.com when Twitter was fluttering earlier today. He said it was the Primcopalypse, and the End of SL as We Know It.
Shaun Altman said he had a secret plan. I asked what it was. He said if he told me what it was, why, then it wouldn't be a secret.
Csven Concord (*shudder*) who is truly unhinged, arrived to make a *deposit*.
At SLIB, a young Finn who said he was 23 years old was reassuring patrons that he had put limits on withdrawals but that they could keep trying in the next 24 hours. When one patron expressed bewilderment about the conditions, he returned her the deposit. He was angry that the big company of LL was doing this to his little company. His blog described a hard childhood and struggle to overcome adversities, and his excitement in being able to get a business started online.
The Rock, an insurance company that had backed SLIB and some of the other banks' deposits, announced in an automated message at its terminal that the insurance was "sold out". Some large investors said they had insurance out on their bank deposits and seemed confident that they would get paid by the insurance companies. But...where do these companies keep their funds? In...banks.
The banks and the stock exchanges and the insurance and financial companies are obviously all intertwined. I asked one investor at WSE how the banks and the stock exchanges were related. "It's like first cousin, once removed," he explained. "But how close?" I persisted. "Well, once removed..." he trailed off. Not really, as every CEO in a bank has groups showing his stock exchange affiliations as well. It's a very complex story -- LL is right about that -- although they, of course, know more than any of us with their server logs of chat and transactions. They said in the FAQs that they'll cooperate with law enforcement.
But...how many people will this affect? Is this going to be an enormous blow to the economy? Estimates range from $250,000 US to $750,000 worth of Lindens in these banks, eyeballing what some of the "transparent" banks say they have as deposits (I'm not going to count their assets, which are subjectively evaluated). That's actually not much of the till in Second Life, taken as a whole.
Each day, LL says $1.5 million US is traded in SL. With the casinos gone, but not completely wiped out, less of that figure is pouring from the empty into the void, but is mainly buying land and content. There are 50,000 people or so logged on at any one time, let's say. There are some 350,000 people each month who spend $1 Linden or more. So, hmmm. I don't think that more than 25 percent of the log-ons are putting anything in banks; given that one bank that seemed fairly established admitted to just 1,200 customers, I'd have to wonder what we really have here (and they overlap, as many people spread their risk across a number of banks). In fact, I think probably less than 10-15 percent of those people spending money spend it on banks. Of these, many I talked to have deposits as low as $50, and not higher than $1000; there is, of course, a small community of really big spenders -- in SL terms -- who have thousands of US dollars tied up in these prims.
What do I have to go on to make this claim that banking doesn't affect SL THAT hugely? Well, there's my poll, situated right next to the former Ginko terminal, now the WSE terminal that was promising to hold "Ginko Perpetual Bond" and is now...closed for upgrades. It asks:
HAVE YOU PUT YOUR MONEY IN SECOND LIFE BANKS OR STOCK MARKETS?
Total Ballots: 264
88,Yes, and I lost money in Ginko's collapse
59,No, I would never risk such deposits.
51,No, I didn't know there were banks or stock markets
46,Yes, and I have made interest or dividends.
20,Yes, and it has lost value.
Only one vote per avatar, and one answer per avatar, so that means I distinguish between those who lost value, but still had some stock, and those who totally lost their money at Ginko's collapse. Here, at the former Ginko-turned WSE terminal where this answer is likely to be positive, 66 percent of those polled had money in the banks; of these 40 percent had lost some or all of their money, but 17 percent had many money from the deposits. That's the kind of viral story that gets around and explains why the 40 percent were there and risking the losses, I guess.
Of those polled, 25 percent said they wouldn't be so stupid as to risk putting money in these things; 19 percent said they'd never heard there *were* banks and stock exchanges. Well, if 66 percent of those polled had money in the banks, why would I estimate only 10 percent of all those spending money when they log in are involved? Because my polling sample is skewed. Because I don't see that many people running on banks. Because...there aren't that many banks once you eliminate the money trees which merely award money randomly, or in some cases are mere casino objects.
I have another poll started not near a bank terminal, with more newbies, and I found the majority there had never heard of banks or stock markets.
What's next? The immediately speculation was that the land market would be affected because many people took out loans to get land and homes. So it's like the sub-prime mortgage of second Life. But... I don't think there are that many people who have mortgages -- I guess because most people I talk to either buy Lindens, or have businesses to generate them.
Meanwhile, it was clear to me, like a lot of mass demonstrations I've witnessed in various countries at various historical times, including my own, that a lot of the people in the protest were opportunists and show-boaters, not actual depositors. B/tards showed up to wave O RLY signs and Baba Sucks, a sign you can bring to any SL demonstration and never go wrong. moo Money and Tateru wheeled in to rubber-neck for massively.com. Csven Concord, as unhinged and creepy as ever, began ranting about socnet and how he was trying to look up Arbitrage and finding "no information" about him -- which is false. Somebody muttered that Arb was "hiding" although he had just been there for hours. A sign appeared demanding that Arb give back money, and several copied it -- but the avatars didn't seem to be in groups related to the bank. I began to get the distinct impression that the demonstration was happening at this bank because a) a lot of hangers on had just followed the crowds at this hour and b) competitors were helping it happen to make it look like this bank was somehow more in trouble than others -- but obviously they are all in the same boat.
Many of the avatars at all these locations muttered or even yelled not only at the banks who held their money, but at Linden Lab. GIVE US BACK OUR BANKS! said several signs at CAPEX, as if to say, "We'll sort it out, just leave us alone."
LL was blamed again and again for not doing anything in time...and Shaun Altman repeatedly called for everyone to demand that LL do "just one bailout" and then close the banks. That would mean a LOT of printing for Supply Linden! Some bankers said they felt they hadn't been given enough time with 14 days notice if the objective was to get a license to bank. A young banker said he was going to "give papers to LL tomorrow!" -- but the papers seem to be merely incorporation proof, not a license to bank.
I felt bad for Second Life tonight, because it is a terrible upheaval for people to go through. even if most of the green dots on the map were camping, shopping, or bundled in twos in their sexgen beds, oblivious of banking. My rental boxes had been running very strong all day, possibly as people decided to put their money in a home rather than in a bank, but then some began to refund, perhaps wondering if they should just keep their cash out of this virtual world altogether. I IM'd a few to ask why they were refunding -- but found out it was due to a personal break-up, which so often happens in SL, and then produces two rentals not one...A few said they were going off to buy land, feeling confident about the economy; they had never heard of the SL banks lol.
Still, with this big a deal, it will be hard to hold consumer confidence, and frankly, Linden Lab, as the main actors on this complex scene, have got to make some positive moves now that give people faith in the economy. Bring back the $500 stipend?
I'm going to print the whole Linden FAQS here, because they are such a pain-in-the-ass to find. I always have trouble trying to find these FAQ knowledge base links -- because they take you to the support page...then you have to "just know" to click on "LOG INTO SUPPORT SYSTEM AS PROKOFY NEVA" and once you've done that, hope to pull up the damn page...
Knowledge Base
Second Life Info > Knowledge Base > Policies >
FAQs on Policy Regarding Inworld “Banking”
What is the new policy?
Please see the new policy regarding inworld banks. In effect, the policy prohibits unlicensed virtual “banks” or other persons, groups or entities from offering interest or direct returns on L$ (or other) investments.
When will this policy go into effect?
January 22, 2008.
What is the reason for implementing this policy?
There are several reasons that make this policy necessary: the legal risks raised by such activity; the fact that several of these “banks” have defaulted on their obligations; the unsustainably high “interest” rates offered by many of these banks, which make it likely that others will default as well; and the very negative effect that these continued defaults – possibly at a wider and accelerating rate – will have on Second Life’s virtual economy.
By “legal risks,” do you mean virtual “banks” may be illegal?
There’s no guiding law or precedent we know of that tells us whether these practices are legal. Depending on what statements these so-called “banks” make, and what depositors’ expectations are, they raise the possibility that banking or securities laws may apply. If so, they would need to be chartered or registered with applicable real world regulators, and to our knowledge, none of them is.
Are any of these “banks” really “banks”? Who runs them?
We’re aware of no chartered banks doing banking business in Second Life at this time. Most of the “ATMs” into which L$ are transferred are merely run by other Residents – whether individuals or small groups. (This is usually apparent to Residents when they conduct a L$ transfer, usually to the owner of the “ATM” at issue.)
A bank “deposit” thus operates no differently from other transfers of L$ inworld – it’s just a transfer of L$ from one Resident to another. And as in the real-world, if you do not know or trust another person, you should not ask that person to safeguard your L$.
Why not “virtually regulate” these “banks,” instead of banning them?
Linden Lab can’t and won’t become a virtual “banking regulator.” Banking regulation – whether in the “real” or “virtual” world – is complex and intensive, and is a government activity. Linden Lab is not empowered to regulate the businesses of banking or securities. We can and will take steps, however, to ensure the stability of the Second Life economy, and that is what we are doing.
Will Residents whose L$ are in these banks get their L$ back?
We urge inworld “banks” to live up to any promises they have made, to settle up with “depositors,” and of course to honor valid withdrawals. To the extent they do not, we will cooperate with law enforcement and other third parties seeking to prosecute or take other action against them.
However, as Linden Lab has made clear in the past, we play no role in overseeing or operating these “banks,” which are run by individual Second Life Residents. (We’ve also warned Residents to be wary of these risks.) Thus, the transfer of L$ that one Resident has made to another Resident is ultimately an issue between those Residents.
Linden Lab therefore can’t enforce obligations that might relate to those transfers – we have no right to do so and we have no way to do so, especially where such a large volume of transactions are at issue. All we can do – as we’re doing now – is to try to make Second Life safer by eliminating behavior that’s likely to lead to fraud, harm or illegality.
Thus, Residents who believe that a “bank” has not made good on what may have been promised must seek to enforce any such obligations on their own.
Do the inworld “banks” have enough L$ deposits on hand to pay us back?
We have tried to determine this, and can’t. There have been a huge volume of micro-transactions between Residents and “bankers,” and it’s simply impossible in many cases to (1) reconcile what’s owed, (2) reconcile what transactions were related to “banking” and which weren’t, and (3) separate these out from unrelated transactions.
It’s possible that Residents who have transferred L$ to “banks” expecting unusually high rates of interest will be disappointed. Several “banks” that have offered unsustainably high rates of interest have defaulted recently, and this suggests that others using the same business model may do the same.
If these banks can’t pay us back before the policy goes into effect, then are you just making this bad situation worse?
No. If inworld “banks” can’t live up to their obligations – or if their business models are fundamentally flawed, then we believe the responsible thing to do is stop the activity. This will prevent Residents in the future from losing their L$.
Will you freeze the funds of these “banks” to prevent them from cashing out?
This is not an option. Given the sheer volume of transactions, among numerous “banks”; the apparent cross-dealing within and among banks’ various, numerous, and alternative accounts; and the fact that the individual “bankers” also engaged in other, unrelated activities, we could not effectively or fairly distribute these funds, even were we to identify and freeze them.
My bank has defaulted. What can I do about this, and how will Linden Lab help?
If you think you’ve been defrauded by another Resident you may of course seek legal recourse. We’re preserving records relating to inworld banking activity and (upon proper legal process) will cooperate with attorneys, regulators, or prosecutors to redress fraud and punish “bankers” who have acted in bad faith.
Will this cause a “run on the banks”?
It might. We unfortunately have no control over this. If in fact there are insufficient funds to cover what’s owed, that would confirm that this type of “banking” activity is inherently risky and flawed, and should be shut down.
Will the individuals running inworld “banks” simply cash out their L$? Will this destabilize the LindeX?
While this may occur, we believe any disruption will be minor and temporary.
Are any other inworld businesses, such as stock exchanges, covered by this policy?
As of today, this policy is generally focused on objects and schemes that involve real-time transfers of L$ and payment of interest or rates of return. Exchanges may or may not do this, so they may or may not be covered. In addition, we reserve the right to remove any objects and take action against any Residents who are violating U.S. or other laws. If you are unsure whether a business you’re operating abides by applicable laws (e.g., banking, securities laws), you should get a formal legal opinion, from a personal lawyer acting on your behalf.
What steps will Linden Lab take to implement this policy?
As of January 22, 2008, we will begin removing objects that facilitate these prohibited practices (e.g., ATM machines). We will take action against offenders, which may include suspension or loss of access to land. We will also cooperate with law enforcement, in the event of any fraudulent or illegal behavior by inworld “bankers.”
Actually, I was just there to watch the train wreck in progress that Spin had told me about. I do love a good protest. Thanks for giving Massively love, though. I feel warm and fuzzy. <3
Posted by: moo Money | January 09, 2008 at 09:09 AM
Prok tends to give that fuzzy feeling to some :)
Just like a rash...
Posted by: sean percival | January 09, 2008 at 01:37 PM
spray roaches with raid and they flip over and wriggle in a frenzy for a short timeframe then die. so goes the nigerian style scams in sl.
they will wriggle in a frenzy attempting to put a facade of innocent victims up before they simply vanish with the cash. if they were honest they would have held enough money in reserves to cover the inevitable shuttering of illegal operations. but they don't have the cash. its gone. and so will be the scammers in a week or two. simply vanished without a trace and will no doubt reappear on new accounts to perpetuate new fraud schems upon the foolish who think there is something to be gained for no effort.
Posted by: Ann Otoole | January 09, 2008 at 01:49 PM
"they will wriggle in a frenzy attempting to put a facade of innocent victims up before they simply vanish with the cash. if they were honest they would have held enough money in reserves to cover the inevitable shuttering of illegal operations. but they don't have the cash. its gone."
Actually, most honest banks in RL only have a small percentage of investors deposits on reserve. It wouldn't surprise me if some SL banks actually had a higher percentage. If a government decided in RL to make banking illegal within two weeks, you'd certainly see a large amount of bank failures.
"and so will be the scammers in a week or two. simply vanished without a trace and will no doubt reappear on new accounts to perpetuate new fraud schems upon the foolish who think there is something to be gained for no effort."
I bet most of the following will be around in two weeks:
LukeConnell Vanderverre
Arbitrage Wise
Shaun Altman
Travis Ristow
Tyrian Camilo
Lindsay Druart
Posted by: Land Shepherd | January 09, 2008 at 02:39 PM
Ann, I think you're almost a victim of the way the mainstream media has played this, based on facile quotes from the "experts" like Duranske, who want to portray this as a Raid can with roaches.
My reporting here shows that it isn't. I totally agree with Land Shepherd that those six people named here will still be in SL trying to cope with this situation. They were all on the floor of the banks or exchanges they had helped to create last night, not running off to Acapulco.
These people built businesses in SL, not fly-by-night scams. And I would put Nicholas Portocarrero in there as well. I don't think they deliberately intended to scam people and run off with the game gold. If they had, they'd have run off by now. They have suffered losses, too.
All of these people strike me, having seen their actions and heard them speak or even met them in real-life, as people merely trying to make a Second Life. They may not be very competent -- that's another matter. I wouldn't give any of them any significant amounts of money because I think their desire to role-play and have a Second Life may be larger than their ability to deliver on it in first-life terms.
But then, I put money in Pay Pal's money market, and that's often described as risky:
http://www.reuters.com/article/reutersEdge/idUSN1622549020071017
Isn't everything online?
Posted by: Prokofy Neva | January 09, 2008 at 03:33 PM
Just like a rash...
Yeah, keep it coming Sean, these are all good examples of just how someone editing the page for Second Life for what is claiming to be a major human-driven search engine on the Internet should all be about.
What a fucking tool you are.
Posted by: Prokofy Neva | January 09, 2008 at 03:36 PM
There's nothing stopping any of these "bankers" from running their "banks."
If they want to accept deposits of real value from real people though, it's completely reasonable that they be expected to get a real banking license or financial institution charter first.
If they can't manage that, they have no business running a bank or a financial institution.
--matt
Posted by: Matt Mihaly | January 09, 2008 at 06:44 PM
Matt, as in most cases to why ppl chose SL over RL to start up new ventures, is not becasue they don't believe they can handle the job (quiet the opposite), there is something else to it, something Prokofy touched: Some ppl like the art of creating something from sctratch and getting a community together to form grassrots of semiregulations. Another reason specialy for the banking sector is that you not only need ALOT of capital (in my country about 18,5mill USD), with such startup cost it would be a very bad idea to use that license to provide microcredit/micropayments in a small vr world such as SL wouldnt it ? But even if you are stupid enough and you do have 18,5M usd to play with your govt would refuse your application because it would make no financial sense at all... RL regulations and SL's micropayment is incompatible, i'm all for regulating inworld transactions but we need new regulations for microeconomies such as sl.... Btw one thing i've noticed over my past years in sl is that there is no such thing as "A SL community" there are tons "SL communities" or cliques if you will, when gambling community got banned much of the banking community cared less when WE said help us now and we'll help you help you when it's your turn to be banned, ofcourse we were called much of thesame bankers are called today, and just like the casino haters came to life at the gambling ban and both died afew weeks later, so did the bank-haters community form itself, as usual mostly of ppl that never heard of the industry till it was banned or by ppl who have no idea how it functioned, many of the "bank-haters" don't even know that banks offer loans for land (so getting them to believe all sort of megaevil-ponzi-conspiracy-theories isn't difficult, specialy if they're bored).... Honestly i do understand why each biz sector minds its own day-to-day operations over the others, (like i descibed: everybody ignored the fall of slgambling, today everybody ignores the the fall of slbanking... Matt, next time you try to be a smartass please do your research first, because it's less embarrasing for yourself.
BTW. when it comes to running a real bank in SL, it's actualy legally impossible because of the socalled "patriot-act", the personal data this patriotact requires banks to collect is WAY ABOVE what LL TOS allows you to, and as we learned earlier that any biz operating in sl must be in accourdance with CA-State laws and US-FED laws regardless of where your biz operates. And that except mentioning that ALSO any "internet based" financial institution is required to require their firsttime customers to fax in a signed papers that data (that LL TOS won't allow us to collect) with copy of driverslicense/ID... Now imagine asking a typical SL noob to fax in those data just so he/she can rent-to-buy a tiny plot of 512m2s. On the otherhand, screw the content creators, all sl needs is a huge userbase of consumers wich LL can showoff to the megacorporations that believe large userbase sounds sexy, guess thats what you want matt HUGE badass of a grid filled with 100% regulated: ADFARMS (because thats the only way i can describe the sims of most of the RL megacorps have wasted time and money on, yes empty ADFARMS they are but hey they're regulated ADS wich means they have to be healthy for me ;)
Posted by: Gen Ferraris | January 10, 2008 at 12:25 AM
Gen, you raised an important issue here. What kind of regulatory agency is going to give you a license if you only have a million dollars, and want to give out little loands of $2.50 US to buy a first land? And at most have $750,000 US you are playing with. You won't get a license to do that. And if you have a license, you couldn't justify the staff time fooling around in the dollhouse like that.
Yet, amazon and ebay managed to build these empires that can handle transactions where a book costs 25 cents, and only $3.50 for shipping and handling, and the person doesn't make hardly anything off it, and amazon doesn't make much -- but the multiplicity of these transactions, and luring people to the site so that they buy the bigger ticket items like the electronic gadgets then makes the business.
So it has to be something on that model, I guess.
Posted by: Prokofy Neva | January 10, 2008 at 12:35 AM
I don't think it makes any sense for a "real bank" to come into SL, at least at this point. There doesn't seem to be much of a plus side financially and lots of potential liability. Why bother with this silliness if you are a RL incorporated bank?
Good point about the "gambling-haters" and "bank-haters". I think these cynical folks tend to hate a lot of things and are very vocal. I'm sure if they could, a lot of them would get rid of the evil land flippers. After all, we just scam innocent newbies out of their money by buying and selling land and offer no content or value whatsoever.
It's unfortunate. The loudest critics of gambling and "banks" tend not to have even participated in these activities by their own admission. Yet they rejoiced with glee when they were closed down. I see few ex-users of these businesses really complaining. Most ex-users say something like "yeah, I lost some money but it was fun, that's the way it goes".
I think this trend of dragging RL regulations and requirements into SL will continue unabated. Who knows, twenty years from now you may need an engineering degree to get a LL license to build cars for resale in SL. After all, you wouldn't want innocent newbies scammed out of their lindens buying inferior products created by lowly amateurs, right? :P
Posted by: Land Shepherd | January 10, 2008 at 04:31 AM
Land Shepherd, you've summed up a huge problem I've been writing about for 3 years, which is about a kind of class warfare.
The tekkies (and as a botter you may include yourself among them), and some of the professionals who aspire to becoming tekkies or collude with them, have a real distaste for anything related to land, socializing, mass culture -- anything that isn't based on the premise that "everything is digital and code is law" and isn't in a sort of esthetic vain of cool or geeky or whatever as they understand it.
Everything that is outside the sphere of "code is law". You know, arbitrary things like "land" -- which isn't merely code and pixels but something more intangible. Like social relations. Like mass culture.
This elite is constantly trying to stamp out the existence of this other, larger class, and build the New Society with themselves as the New Class by outlawing them, ridiculing the others, minimizing them, whatever it takes.
Everything to do with land has always annoyed, if not angered and made fearful, the scripting class, the coders. They hate the thought of some other class gaining some sort of base of power that doesn't revolve around them and their skills -- which they hope to keep artificially in demand.
Heaven forbid that a 48-year-old housewife from Kenosha who works part-time at Wal-Mart and drives an SUV should spend $2000 and buy herself a sim and operate it and make money from it -- and run it like a geek would have only a few years ago, in what would have been his private domain where he reined supreme, making everyone else queue up to him as "web master".
Duranske is one of those not only out there rejoicing with glee, but screaming for blood, and pointing a boney, judgemental Puritanical finger at Philip Linden. My God, he's unhinged.
Look at this, a story on the front page of Technology Review, the prestigious MIT publication, where my screenshot from yesterday's blog is on the front page:
http://www.technologyreview.com/Biztech/20037/
and here you will see Duranske ecstatic that the banks are going to the wall, and his expertise is being cited -- and he can't help but go into high Sycophanske mode, and gushes to the Tech Review guy that Linden Lab's decision to close the bank was likely tied to the appearance in this self-same Tech Review of an article a week or so ago called "The Fleecing of the Avatars".
*Rolls eyes*. I put paid to this theory in my comments, of course, but what if it is true, that the Lindens look over their shoulders at their peers in their little wonky geek circles, where MIT denouncing their banks might really bother them more than their own customers getting shafted, and where weeny little Duranske, a non-practicing attorney, could give them the jitters over a possible lawsuit?
Well, what does that mean, then? I ask this very starkly. Does that mean that non-practicing Internet lawyers and technology journals on the Internet get to decide in advance what is legal and illegal, spout it from their bully pulpits and shut down things they don't like, that they find either a threat, or culturally or morally distasteful?
Oh, Duranske claims it's only "about the math." Why if you have "60 percent interest" actually, when Ginko's closed, it was promising 14 percent, but whatever), if you have "stolen $750,000" (does he have documentation?) then it "must be" a Ponzi scheme?
Well, leave aside the basic anarchal WTF I want attitude of SL that says, "Hey, if I'm dumb enough to buy into a Ponzi, that's my funeral, get your paws off my life, who are you to regulate me".
Just ask whether this math is even the math that really pertained. After all, a lot of Ginko was tied up in stock in...the WSE. Which consisted of shares in companies that IPO'd on that Exchange and got the start-up capital they needed to launch businesses in SL -- not all of which were failures.
Oh, it may well be a house of cards. But they've done nothing more to prove it than anybody else -- they just figure it's so, and of course, that's because they wish it to be so.
They wish to be superior to others, to criminalize them, to be the ones on the white list, not the black list.
That's because they want to make their own value rise in this market of reputations. They also see a lucrative career ahead advising clients on the dangers of the Metaverse (which as we know, from Duranske's tendentious page denouncing me, includes warning Metaverse travellers of the dangers of bloggers like Prokofy LOL).
Posted by: Prokofy Neva | January 10, 2008 at 05:21 AM
Blak Hax is not welcome to post comments here due to repeated griefing of my properties and harassment of my tenants on a number of sims, as part of the Woodbury/b/tard incessant griefing operations.
Whatever the content of the question, people who cause me SL or RL damage do not get to publish here.
Posted by: Prokofy Neva | January 10, 2008 at 10:24 AM
"At the World Stock Exchange, LukeConnell Vanderverre was holding court, talking in Voice and avoiding any typed statements." - Prokofy
Ayep, because voice is not logged at LL like text chat. Wouldn't want to say anything which might be logged by the chumps, er customers (or LL if pulled the logs or someone sued and there was a discovery ala Stroker) now would we?
Right there, I question his honesty / integrity..a verbal agreement is not worth the paper its wrtten on...but like many, I suspect he will survive this and probably prosper in the future. That kind usually do.
Posted by: Maklin Deckard | January 11, 2008 at 02:03 AM