Second Life: Money Checks In, But It Doesn't Check Out
from the mlm dept
In addition to all of the hype surrounding Second Life, particularly when a company announces that it's setting up a business inside the virtual world, a lot is made of the fact that the game seems to have a sizable economy, in which fortunes can be won or lost. Unfortunately, like everything else surrounding it, such as its population of users, the facts aren't so cut and dry. While there may be a fair amount of plain vanilla trade (i.e. one person selling a good to another), the economy doesn't seem to support anything financially sophisticated. One speculator thought he saw an arbitrage opportunity based on the interest rates paid to deposits in in-game banks. But while the math worked out, the plan failed. The investor soon discovered that it was difficult to collect on his investment, and that many of the people with whom he was doing business turned out not to be trustworthy. So while it was theoretically possible to rack up big profits in Linden Dollars, on paper, actually getting them and then converting them back to real currency proved difficult. Reflecting on his experience, his conclusion is that the economy is essentially a pyramid scheme, where it's easy to pump money in and see it inflate, but it's difficult to cash out. Of course, if you're still interested in setting up a business in Second Life, how about starting a collection service?
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Second Life
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Re: Second Life
http://www.getafirstlife.com/
:)
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Re: Re: Second Life
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Rip offs
it will crash and burn just wait and see
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Second life?
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Second life?
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Now your talking
Does this mean I get to have the M1A1 tanks and guns after all?
Im in! Time for 0|/n4g3!!!!
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Yeah... not that advanced yet
I'm sure straight forward "manufacturing" ideas can make money, but seriously, how can you ever expect to collect from people if you're not doing an on the spot trade? How can you really make a decent amount of money if Linden controls the money supply and exchange rate (though they claim it's a floating rate, their control of the money supply basically sets the exchange rate)? There's also no "second" legal system and no precedence set in our "first" legal system for these disputes. There's no law enforcement, because there are no laws.
Yeah, second life is absolutely fascinating and will likely be the future in one way or another (possibly web 3.0, so to speak), but it's far from able to handle the complicated financial deals this guy was trying to pull, I would think.
With all that being said, I wouldn't be surprised if someone finds a way to "break the Linden bank" one day... yet another reason not to put serious money into Second Life.
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second life
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Re: second life
Mathew, that may be true, but investment opportunities in Kazakhstan and Ulan Bator aren't getting written up on the covers of Business Week and Fortune as places where millions are being made...
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Re: Re: second life
I see your point, but if I based every investment decision on what was printed in magazines, I'd probably be as poor as the schmuck who tried "investing" in second life.
Magazines like to hype stuff that sells their magazines, whether or not something is really true. This is old news and someone that is a truly good investor should realize.
He should have done more homework before plowing 10K into a theory.
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TFA proves this guy is definitely a tool
And yet he was intentionally trying to use his perceived "market inefficiency" to his advantage. Something tells me that if he was the one holding the strings, the currency wouldn't be "mispriced", it would be "reflecting macro-economic trends". He made a bad investment decision and is afraid to admit it to himself.
What are you a fucking retard? There's no legal system! Of course "counter-party risk is tremendous"... put more simply... watch who you give your money too! If someone is promising you a 2,000% APR and there are no financial controls... then how are they achieving that return + profit for themselves? 1) They are engaging in very high risk activities to generate astronomical returns, or more likely 2) They're crooks.
Hell, there are "first life" countries that pay high interest rates on their bonds (Turkey, Russia, Indonesia, Brazil, etc) but there is a risk associated with it. Why would putting your money into a pretty UI change that?
This guy takes 50 words to say something that could be said in 2, he unnecessarily complicates things, and he is a dork.
He is probably an investment broker.
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Re: TFA proves this guy is definitely a tool
I am thinking Day Trader.
Ya Ya, little difference but a whole lot of baggage associated to Day Trader if you have ever had to support one.
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Re: Re: TFA proves this guy is definitely a tool
Are they even literate?
I never understood day traders... how can you expect to make a profit you can live off of when the gov't instantly take 20-50% of what you make?
I've heard stories of people that have done it, but that's all they are... stories. I have yet to actually meet someone that is truly successful at it.
Buy some uranium stocks and hold them for a few years... you'll likely make a fortune.
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LOL!!!
This can be said about more than just 2nd Life. Funny stuff!
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SL Banks are not relevant
Since the premise is taking Second Life banks as an example, every consequence you draw from it is simply wrong.
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virtual economies
accumulating wealth in an online game is not difficult, just time consuming, and since advancing a character in an online game is also very time consuming (known as grinding) some people opt use money instead of time to gain high end items or characters.
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I play sl, i make nice money in there but its only because i know its a game, i make stuff i wanna make, if people buy it, cool if not cool. its not meant to be a replacement for life just a game
If you want to make money in there stop playing you are already taking it too seriously
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