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The E-Sylum:  Volume 9, Number 49, December 3, 2006, Article 27

VIRTUAL WORLD GENERATES FIRST REAL-WORLD MILLIONAIRE

Len Augsburger forwarded an article about the money used in Second Life,
a web site/game/virtual world that has attracted a loyal user base and
lately, plenty of publicity.  He writes: "This article starts to change
the whole notion of what money really is......."  Here are a few excerpts:

"Anshe Chung, a real-estate tycoon in the digitally simulated world known
as Second Life, has apparently become the first virtual millionaire--i.e.,
someone whose holdings in a make-believe world are legally convertible
into genuine U.S. currency worth more than $1 million."

"Second Life's creators and denizens do not like it to be called a game
--you don't shoot at monsters while you're there, for instance--but it
might be categorized nonetheless as a special variety of so-called
massively multiplayer online role-playing game (or MMORPG for relatively
short), albeit one that is more akin to SimCity than to World of Warcraft.

In Second Life, subscribers get a tool kit that enables them to build
and create an avatar (a character in the world). They also get a small
quantity of Linden dollars to start out with, enabling the participant
to buy additional tools and objects within the world itself. Linden
Lab converts currency at a floating rate that, at the moment, is about
257 Linden dollars per U.S. dollar.

Though you can buy additional Linden dollars from Linden Lab by paying
U.S. currency, Chung says she has made all her additional Linden dollars
via in-world buying, building, trading, and selling. The lion's share of
it, she says, has been made by buying, developing, and then renting or
reselling "land"--i.e., control over the virtual real estate simulated
by Linden's servers."

To read the complete article, see: Full Story

The reader comments following the article are plentiful and come at
the issues from all sides.  They make great reading as well - here
are a few:

"This is nothing more than a pyramid scheme. For a few to get rich,
many more will have to give up their real money. No real wealth can
be created in a virtual world."

"This is the future of the Internet and world wide economy. Everyone
wondered why you would buy virtual real estate during the birth of
the Internet. Now the domain name market has made many millionaires.
All businesses who rely on web pages have the same risk if ever the
servers were to shut down. There will be many more millionaires made
in Second Life and other virtual worlds. Virtual World Real People."

"All value is virtual. A piece of land, a book, a car, a stock, a
painting, any good or service you can name -  it doesn't matter whether
it actually exists or not. What does matter is if people want it, and
what they will pay for it. Where there is any demand and finite supply,
there is value."

"Second Life is rife with casinos where one may bet, win or lose,
Linden Dollars. Since these are, as mentioned in this article, convertible
to US Dollars, does Second World not run afoul of the new US prohibition
against online gambling?"

"I actually do think the time is coming when "virtual" property is given
a legal value and therefore, a true physical presence. Remember, our
technological laws are based mostly on telephone and telegraphs, radios
and TV's. The time is now to re-write the law of the virtual world as
it becomes more a part of our daily world..."

"Actually, the US Congress is in the preliminary stages of probing
virtual economies. That should be considered a good indicator of how
lucrative this virtual "waste of time" (as some have deemed it) can be."
Full Story

[Put me in the "money is what people agree it is" camp.  As I've often
noted when discussing private currencies such as Labor Exchange Notes
or Liberty Dollars or Boggs bills, the "real" value of any currency
exists only because the parties to a transaction agree on that value.

The Linden dollars may be convertible to U.S. Dollars, but those dollars
are just as "virtual" - they only have a value because my fellow citizens
agree to accept them in turn for the "real" things I want - food,
clothing, shelter, entertainment, Internet access or ... a piece of
virtual real estate.  -Editor]

  Wayne Homren, Editor

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