What Is The Linden Labs Fee To Withdraw Money
Last calendar week there were reports of financial woes, including a banking company run, in Second Life, the online world that had more than than 1.6 million residents active inside the past 60 days. (See "Coin Trouble in 2nd Life.") So Engineering Review asked Linden Lab CFO John Zdanowski, who is responsible for managing the economic system of the virtual earth, to explicate how the virtual economic system operates–and the pregnant of Linden dollars. Residents of 2nd Life can brand clothing and build other virtual objects, buying and selling products using Linden dollars. And the Linden dollars aren't mere Monopoly money: they tin exist traded for U.Due south. dollars on an exchange chosen the Lindex, at a rate of about US$1 to L$270. Applied science Review checked in with Zdanowski on the workings of the Second Life economy and how information technology has been affected past recent happenings "in world."
Engineering science Review : What is the reason for having a virtual economy in Second Life, complete with its ain currency?
John Zdanowski: To give people the incentive to create things in world, we implemented the Linden dollar and the Linden-dollar economic system in order to facilitate a market for these virtual appurtenances. In July, for example, there were about 12 and a half one thousand thousand transactions that made upward the economic system in the world. Just the average transaction size is quite small, and you couldn't utilize credit cards because the fees are too loftier.
TR : What exactly is the Linden dollar?
JZ: It's a limited license correct to certain features of Second Life. Simply like anything in limited supply, if people want it, then it has a real coin value. Linden dollars are a indicate tally, if you will, that people can apply as a mode of exchange. At the terminate of the mean solar day, it'south not currency. Just governments can issue currency, and we're by no means a authorities.
TR : Nearly how much coin gets traded on the Lindex, and what exercise people practise with the gain?
JZ: In the second quarter, we facilitated the substitution of over US$20 meg worth of our Linden dollars. The average auction transaction is about Us$200 dollars, and the average purchase transaction is most $20. We match about ten buyers to 1 seller, and charge about a 5 percent fee to facilitate that exchange. Second Life residents tin can use their proceeds from the exchange in two means. They can utilize it to pay their fees–probably 45 to l percent of the proceeds from Lindex sales are used to pay state fees, purchase more than land, or pay maintenance fees–or they can cash it out.
TR : Linden Lab encourages people to trade U.South. dollars for Linden dollars, while some online fantasy games, such as World of Warcraft, take discouraged this type of trading. Why is this?
JZ: The fundamental difference is that in World of Warcraft, the company, Blizzard Entertainment, makes all the content in earth. In Second Life, our users make substantially all the content. And World of Warcraft is a game. If you lot buy something that advances your powers, y'all're sort of circumventing the rules of the game. Second Life isn't a game: it'due south a platform for collaboration and interaction. When people build something, it has value, and they have intellectual-property rights to it. It's those intellectual-property rights that other games specifically restrict and 2nd Life specifically allows.
TR : Some people brand all or function of their real-life incomes in Second Life. Who are they, and how many people do this?
JZ: We accept about 45,000 profitable business concern owners–accounts that have positive monthly Linden period. That's upwards from well-nigh 25,000 in Feb. About 150 of them make over Usa$v,000 dollars within a single calendar month. These are the creative people and the very technically talented people who've congenital nigh of the content in 2nd Life, and they're able to reap value from that.
TR : While your model is built around people building in-world content, such as airplanes and furniture, some residents have also congenital financial institutions, such as stock exchanges and banks. Recently, there was a run on Ginko Fiscal, i of these virtual banks. What do you think about this?
JZ: In that location'due south really no purpose for a banking company in Second Life. The fact is, Linden Lab is the depository financial institution. Nosotros'll hold your Linden dollars for y'all, and we'll keep them secure. Nosotros're obviously non giving you lot an interest rate on them, because in that location'south no manner to earn an involvement rate from them. If they're offering a high interest rate, then information technology'south also good to exist true. I would warn our residents against doing speculative things like that because they're risky. I don't know, but there could be fraudulent activity going on there. If nosotros became aware of it, we'd close it down.
TR : Linden Lab recently shut down the 2d Life gambling industry. How has this afflicted the in-world economy?
JZ: Nosotros've always restricted illegal activeness in Second Life, and now we've specifically chosen out gambling. I call up gambling might have been ten or xv percent of the economy, so there is probably an overhang of economic activity that'southward no longer happening. Last month, we sold L$159 1000000 on the exchange. We haven't sold very much at all nonetheless on the exchange in August. I think it's got to work its style through the arrangement. In terms of information technology affecting other aspects of the economy, and then long as the exchange rate stays stable–and so far it has–it shouldn't impact other parts of the economy.
TR : I've heard that some casino owners were upset about the loss of their businesses. What do you think of this?
JZ: They shouldn't have been operating casinos considering they're illegal in the real world, and they're illegal in Second Life. If people are operating illegal businesses in 2d Life, they'll somewhen go close downward. If people are operating legitimate businesses, then just like I hitch my fate to the success of Linden Lab, so do they.
TR : What'southward the nature of the property people hold inside Second Life?
JZ: When we say "country," it sounds similar property, but it's not concrete property. It's intellectual property. People don't take holding rights in Second Life considering there isn't any property.
TR : What about the emotional value of these words? Even if the land is virtual, don't people get fastened because it's called "country"?
JZ: I think virtual worlds can have a very emotional impact on people. The more time I spend in Second Life, the more than I view my office infinite in Second Life every bit a real identify. In that way, 2d Life is having a profound touch on how people recall and how people feel. The fact that information technology tin can seem and then real to people is exactly what makes me most excited about working here.
Source: https://www.technologyreview.com/2007/08/14/36671/making-money-in-second-life/
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