|
Linden Lab is finally attempting to reign in the abuses of unscrupulous banks within Second Life. This is long overdue and if done right will help grow the economy in Second Life. However, I have numerous concerns about their approach. They seem to be seeking an approach focused on imposing rules, that may be self contradictory instead of engaging the technology and community, which is core to Second Life, to address the underlying issue.The key issue is: As of January 22, 2008, it will be prohibited to offer interest or any direct return on an investment (whether in L$ or other currency) from any object, such as an ATM, located in Second Life, without proof of an applicable government registration statement or financial institution charter.
|
Let us spend a little bit of time trying to understand this. ‘Interest’ is pretty straight forward. Yet, does this apply to corporate bonds? They offer interest, yet they may be bought on exchanges and don’t have an ATM. What if I give Linden dollars directly to my banker, instead of using an ATM, with the understanding that my banker will pay me back, with interest at some point in the future? This would seem to be legitimate based on their current wording. If this isn’t legitimate, how do you differentiate giving money to a friend with the expectation that they will pay you back, with interest, from giving money to a banker? Or, does Linden Lab propose that players should not be allowed to lend money to friends? More significantly, what do they mean be ‘any direct return on an investment’? Does this mean that companies in Second Life can no longer offer dividends? Dividends are a direct return on an investment. How does this apply to exchanges? In particular, the Second Life Capital Exchange currently offers interest on deposits that are not currently invested. It would seem like this constitutes forbidden banking, but it isn’t the primary purpose for the ATMs. Likewise, you can buy bonds on SLCapEx that pay interest, which may or may not be permissible. By attempting to address the problem by fiat, it appears as if they are creating more problems than they are solving. Perhaps the bigger question is, what sort of registration statement is required? The Linden Lab Terms of Service states, Second Life "currency" is a limited license right available for purchase or free distribution at Linden Lab's discretion, and is not redeemable for monetary value from Linden Lab.
|
;)
