Economics, Shmeconomics

As cool as SL may be to play around in, I still stand by my beliefs that the program acts more like a video game than an actual community connection program.  Although the concept, the idea, of being able to exchange money from US Dollars into Linden Dollars and back is something to take notice for future technologies, I would not take it too seriously for SL. 

What I mean is, if I made a couple hundred dollars off of SL, I would be thrilled.  I would consider it kind of like a virtual-world eBay.  I would have products to sell, people buy them, then I would cash out.  Granted in SL, I would wait a while before cashing out completely, but I wouldn’t wait too long, because of how SL is still treated like a game than an e-commerce program.

With that being said, I found the article on Marc Bragg to be hilarious.  Of all people, a lawyer using SL should have known there would be some risk investing money into it.  For clarification (because in this case it’s obviously needed), SL is not eBay, and is not protected by PayPal or other payment companies.  When a user runs SL for the first time, and whenever SL changes their terms of service, users get a chance to read what the Linden group is offering at what risks they agree to waive.  This is what people usually read:

TERMS OF SER… *user clicks “I Agree.”*

Here’s something interesting that I found from their terms of service:

5.6 You will indemnify Linden lab from claims arising from breach of this Agreement by you, from your use of Second Life, from loss of Content due to your actions, or from alleged infringement by you.At Linden Lab’s request, you agree to defend, indemnify and hold harmless Linden Lab, its shareholders, partners, affiliates, directors, officers, subsidiaries, employees, agents, suppliers, licensees, distributors, Content Providers, and other users of the Service, from all damages, liabilities, claims and expenses, including without limitation attorneys’ fees and costs, arising from any breach of this Agreement by you, or from your use of the Service. You agree to defend, indemnify and hold harmless Linden Lab, its shareholders, partners, affiliates, directors, officers, subsidiaries, employees, agents, suppliers, licensees, and distributors, from all damages, liabilities, claims and expenses, including without limitation attorneys’ fees and costs, arising from: (a) any action or inaction by you in connection with the deletion, alteration, transfer or other loss of Content, status or other data held in connection with your Account, and (b) any claims by third parties that your activity or Content in the Service infringes upon, violates or misappropriates any of their intellectual property or proprietary rights.

Agreeing to Linden Labs Terms of Service is like agreeing to Blizzard’s for World of Warcraft.  They are not responsible for anything a user does with their money, and no refunds are to be given in the event that something goes wrong or if a user breaks the rules.  With Bragg, he not only didn’t think about the agreement that he had virtually signed to, but he allegedly worked around the system to get what he wanted.  Granted, it should be shame on Linden for not thinking about loopholes in their site coding, however, as part of the terms of service, Linden can choose what they want to do.  If a user tried to cheat the system and lost $3,200 in the process, that user should consider the loss a fine.  There is a policing system set up in place for individuals who think they can get away with anything.  If someone tried to rip off a user on eBay, eBay would be jumping down their throats and asking for more than just cash, including legal prosecution.  Shouldn’t this lawyer be expecting the same thing? 

Also, if I had all that money in my account, I’d be freaking out about what could happen to it.  I’ve had my eBay account hacked before (and thanks to my new security measures, and now that I use a Mac, it will never happen again), which had bots setting up random auctions for me without my permission.  What if someone logged into SL, and started to sell off all of the Linden Dollars in an account?  I would never keep that much money in something that’s so insecure… unless their name changed to “Second Life: sponsored by Bank of America.”

What I’m trying to get at is that SL does have some advantages to making money.  However, I wouldn’t trust it as a reliable source of economic growth, and certainly not something to be calling Wall Street about.  According to “Second Life: The Official Guide,” the best paying job available in game are either builders (and they have to be good and well known) or real estate, which depends on the properties a user would have to own (which still doesn’t bring in as much as builders do).1  If anyone looks at SL and thinks it’s going to be a new frontier for online economy, they probably should think again.  The ideas of SL’s exchanges could potentially be used practically in a different format and is going in an interesting direction, but I still don’t see it going far now nor in the near future. 

In the end, though, making money is just a feature in an extensively developed online “game” for other users… and who knows if/when Linden will pull the plug on distributing U.S. Dollars to users through SL. 


Rynaszewski, Micheal. “Second Life: the official guide.” Wiley Publishing, 2007.


~ by Cliff Huizenga on September 25, 2007.

One Response to “Economics, Shmeconomics”

  1. Actually – Bragg’s got an interesting twist on this. Linden Lab has been pretty ubiquitous in marketing that one can ‘own land’, and the word ownership has many legal implications. That is what the suit is mainly about, I think – following it on (which is run by an attorney, Benjamin Duranske), it is interesting to see how things are proceeding.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: