Yet Another Run On A Virtual Bank
from the but-don't-get-too-excited-over-it dept
A couple years ago, there were stories about how there was a "run" on the virtual banks of Second Life. Later on, some reporters tried to suggest that the Second Life "credit crunch" was a predictor of the real world's credit crunch. That wasn't even close to true. Yet, with yet another story about a virtual world, we're once again hearing in-apt comparisons to the real world. The latest is a run on a bank in the game EVE Online. In this case, it looks like one of the guys involved in running the "bank" simply took some of the virtual currency out of the bank and exchanged it for real world cash (about $5k). The BBC headline calling it "billions stolen" is inaccurate, since it was only "billions" in the meaningless virtual currency. In the real world, it translated into not very much at all. The BBC article also calls it a "virtual version of the credit crunch." Again, this is quite inaccurate. In both the Second Life bank run and this bank run the problem was simply outright fraud by the "virtual banks" or those who run them. That's quite different than what has happened with the real world credit crunch, and it does little good to pretend otherwise.
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Filed Under: bank run, eve online, scam, virtual bank, virtual worlds
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It may get the bare facts of a case correct (there was a run on a bank in an online game), as pretty much anyone with an internet connection can manage, these days, but apart from that, there just seems to be a great deal of almost wilful misrepresentation of any situation, regardless of politics or the status quo (comparing the run on a single, player run bank in a virtual world with an economy that extends far outside of the banking system, to the credit crunch, to which it bears no relation whatsoever).
I know this might seem to be an overreaction to a story about an online game, but this is hardly an isolated incident.
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Er?
Okay, I'm usually pretty good at interpreting the minor typos, but this one has a few possibilities:
in-apt = inept?
in-apt = within the application?
in-apt = comparisons in the apartment?
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Re: Er?
So in-apt would be not naturally disposed toward.
on topic, newspapers like to do this. It's a way to compete without doing anything extra; They try to be the first to guess what will happen or compare two unrelated past issues.
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Re: Re: Er?
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Having an advanced degree in economics I have followed the financial mess with extreme interest for the last 2 years copying and printing every article that I can find on what transpired.
The only thing I can definitively positively state with 100% accuracy is that the news media does not project the issue correct. It is not that what is presented incorrect it is just that some of the dots (actually some of the most important dots) are missing. Just simply not discussed.
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Parallels
Let's see, the people who ran the banks tried to make huge profits for themselves while defrauding the bank's clients. Clients panic and take their money out of the bank. How is that different from what happened in the real world? The technical details may be different, but certainly there are parallels worth exploring. If on-line worlds are a microcosm of society, then we should expect to see similar things happen in the games that are happening in the real world.
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Re: Parallels
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Re: Parallels
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Headlines
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Mike is Correct
On the other hand, having run a Texture Store in Second Life for about 4 years, I can say that we started to see less and less transactions as the economic crisis worsened in Real Life. I wouldn't say that the Second Life economy, or any other virtual economy, was a predictor of the Real World crisis, but instead, I would say that these Virtual Economies saw the same issues as the Real World economy.
One interesting side note though. The CEO of Linden Lab, M Linden as he's known in Second Life, when asked if he thought the Second Life economy would suffer during the Real World crisis said he believed that the Real World crisis would actually HELP the Second Life economy as more people would spend their Real World dollars in Second Life then for other entertainment mediums since they would, in his opinion, get more "value". At the time I figured he was just blowing sunshine up someone's butt, but, I must admit that in the past couple of months, the Second Life economy has started to show life again, and we are seeing more transactions in stores like mine.
Does this mean M Linden was right? Does this mean that the Real World crisis will soon be over because the Second Life economy is on the rebound? To the first question, the answer is partially. M Linden was right in that more Second Life residents would find more value in spending their real world currence in Second Life, but, that doesn't mean that more people signed up to join the Second Life world because they saw more intrinsic value in their dollar in the Second Life economy. To the second question, please, you should know this answer without me saying it. Absolutely, without a doubt, there is NO CORRELATION between the Second Life economy and the Real World Economy. Those who say there is, are either lackays of Linden Lab and just spreading their brand of happiness or are disillusioned fools that believe everything they read in the Paper.
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And for those of you interested the great part of the whole theft was that it is completely allowed and accepted (and even expected by some) within the game. The only problem was when he sold the virtual cash for real cash. That was a violation of game rules.
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there is some corollary...
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First, EBANK, despite (probably) being the largest "bank" in the world of EVE, has very small assets compared to the entire EVE economy. The 200 billion ISK is pretty meaningless when an average player of a few months to a year could easily have control of a few billion in assets, in an economy where close to 100 trillion ISK changes hands regularly.
Second, EBANK and all other "banks" in EVE really aren't akin to banks in the real world, despite their names. They are entirely player run with no support from CCP (the company that runs the game). They are much closer to a private company with private investors and no government regulation in real-life terms.
Third, Ricdic, the player involved was the person most responsible for running EBANK. While there was some type of a board and other trusted players, he was the face of EBANK. This is just a guess, but a significant portion (if not all) of that ISK may of actually been his in the first place. In real life terms, this is more akin to something like a CEO cashing out all of his stock - though if not all of it was his, it is more like the CEO stealing money from the company and running off to Nigeria.
Fourth, this is unlikely to have any significant impact upon the EVE economy. Things like the territory wars out in nullsec space (where large alliance of players can "own" the space and its resources) have a much larger impact on the economy than a small corporation imploding however well known they were.
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Even if it's free to make it may still have value. It certainly isn't meaningless if you could trade it in for $5k.
People in these games place huge amounts of value and meaning on these currencies.
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Further context
So, even though its not a good thing that it happened, overall, it wont affect much. I've still got ISK in an account with them, and dont plan on pulling out anytime soon.
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Fair comparison
Perhaps someone can clarify for me the reason Second Life's unique issues seem to bleed over to other companies' virtual worlds.
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Re: Fair comparison
despite what they'd like you to think, it's not that complex :D
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Buy ISK with real cash okay? WTF?
As Josh pointed out, 200b ISK isn't all that great an amount. By myself I could earn a good 2b a week (if I threw my normal life out the window for that period) and that's nowhere near the best a single player can do.
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