Topic: Post-2007 SecondLife (sans admins), here we come! - page 3. (Read 5801 times)

People still play SecondLife?

Great post, thanks.

In Bitcoin, there's no linden labs to step in and say for example "no gambling"

Thanks for the insight. I always thought it was a very interesting project,especially as a Stephenson fan. I have been frustrated every time I tried to get simple answers to tb one questions...glad I finally ran into someone with firsthand experience.

Joined in 2003 during Beta, built, programmed, and sold stuff, worked for some small companies there, was involved in some financial aspects and palled around with finance people, and "invested" in Ginko ($250 invested, $750 withdrawn). Somewhat abandoned it since 2008, only going there maybe once a month, since it's now a resource-heavy chat room that the rest of my friends have mostly abandoned as well.


Anshe Chung. Bought server space (land/islands), designed the land with various themes, resold or rented to others. Not sure if she's even involved any more.


When SL first started, and it cost a few $L to create an object in-world (one you can manipulate and texture to turn into items), everyone in game received a $L250 weekly stipend. This was done to limit the amount of newly created object "spam," since they did now know what their world servers could handle. Once pay-to-create was abolished, everyone still continued to receive a stipend. Eventually, with a whole lot of new accounts and no real way to destroy the money, everyone getting newly printed money every week caused said hyperinflation. Currency stayed somewhat level for a while, but then when it couldn't contain the new inflow of money, I think it went from around $L50 per $1USD to $250 per $1USD within a month or two (I made some money trading on margins during the crash). LindenLabs responded by hiring a full-time economist, and cut all the stipends for free accounts, setting them to $L50 for old accounts, and $L0 for new ones. They are also actively maintaining the exchange rate by destroying excess $L bought at their exchange.


Since LindenLabs had a dream of creating something like the virtual world in SnowCrash, they initially did not want any restrictions (this only changed when enough people whined about it). As such, they were completely for unregulated exchanges. They had no problems with people trading $L back and forth, or with competing exchanges, and helped the process along by setting up the first exchange themselves. They also saw it as a source of revenue, charging a percentage on exchanges same as MtGox does (though way higher fees). As far as I know, that policy has not changed.

I can't believe SL went that far. They seem pretty laissez-faire with an open exchange policy. I mean, you can get Bitcoins with Lindens.

Well, let's see what happens after this stage in our growth (Ponzis, HYIPs, etc.).

How much first-hand experience did you have with SL?
I read a little about it because of their currency. I remember the article about the first "virtual millionaire" that made many waves...someone who was buying and selling SL real estate.

It's been many years, but didn't they have a problem with hyperinflation at some point? Can you tell us more about how Linden Labs controlled and changed the money supply in that timeline?
I know that LL sold SL currency directly. Did they allow you to withdraw into USD as well? Did that ever change?

I loved this post, excellent! +1

Interesting comparison of Bitcoin to Second Life.  One of my favorite aspects of Bitcoin is just watching it.  Watching the services pop up, and either dwindle and die, or experience wild success.  Watching what activities people take place in in a truly free economic environment.  It is extremely fascinating to me.

For those who are unfamiliar with SecondLife (SL), here's a brief history run-down:
1) LindenLabs launches SecondLife, a completely open world with it's own currency tied to production (you spend money to "create" an object that you can build stuff out of)
2) LindenLabs unchains the currency from production, letting it float. Some minor trade begins
3) A currency exchange market is established, allowing people to earn money within SecondLife and withdraw their earnings to USD, or other players to convert USD to $L to buy in-game items
4) SecondLife economy EXPLODES, quickly progressing through the historical economic stages in just two to three years, those being:

• self-production (blacksmiths, farmers, in SL's case coders, 3D builders)
• assembly-line (small companies form to split up work, and create lots of generic duplicates for sale)
• and finally service economy (rent, land maintenance, and even escorts and gambling services)

5) Financial services just start to get a foothold within SL economy. These include banking, stock exchange, and yes, even HYIPs
6) LindenLabs hints at banning all gambling activities due to legal issues within the US. Casino owners run to withdraw their funds on the news
7) The largest bank in SL, Ginko Bank, collapses from a bank run, and in part from likely being a ponzi. Other banks follow. SL stock exchange crashes, due to a lot of the businesses listed being involved in banking and casino services.
8) After numerous complaints, LindenLabs passes new financial regulations, banning all gambling, and all interest-bearing accounts. Casinos, game places, and financial services close. Loaning freezes. Economy comes to a standstill, and many businesses and merchants abandon SL. Things are never really the same since.

In Bitcoinland, we have just passed through stage 7 (though at a smaller scale, even if the losses, $750k from Ginko, were much smaller compared to BTCS&T's $5mil).


One of my main reasons for why I got so interested in Bitcoin is because it is really the first true experiment in unregulated, free market capitalism (that I previously believed SL to be). At least in a modern global economy. SecondLife came close, but it was at about this point (stage 7) that LindenLabs stepped in and put in tight financial regulations. I felt as if I was a scientist, closely studying a process, and just as things started to really jump around and get interesting, someone stepped in, put their hand over what I was looking at, and said, "no, you can't see that." Being as curious as I am, I was quite dismayed. Of course, this exact same thing has always happened in the rest of monetary history: things go horribly wrong (ponzi, bank run, etc.), a few people complain, and instead of giving people a chance to see what kind of solutions they can come up with, someone always steps in to claim authority, blocks the solutions from even getting a chance to materialize, and puts tight controls on the currency to protect us from ourselves.
We are now where SecondLife was in 2007 (stage 7), but without Admins stepping in to protect us from ourselves. So, although all the recent scams, thefts, and other depressing issues have been a real drag on everyone recently, there is something to look forward to:
We are about to enter a stage that we were never allowed to see before; a stage we were always prevented from seeing; where, usually, someone would step in and say "I have authority, and no, we won't let you do that any more." A stage where we can finally observe human ingenuity at finding solutions to problems, without giving up our own responsibilities and trust to someone else. A stage where we can see whether we, as a civilized society, are actually even capable of learning how to deal with an uncertain, anonymous, and dangerous world, using our own senses and intuition, instead of blindly following established rules, trusting that whoever established them knows better, and thinking we don't have to worry about or question them.
And it is only thanks to Bitcoin's decentralized and unregulated nature that this will even be possible. I don't know if this will be historic (likely it will be a blip only we care about), but it will definitely be different, and completely new. And I, for one, am very excited to see where we will go from here!