Due to being away at CES, I didn't report on Linden Lab's decision to ban virtual banks from Second Life last week (the company's blog post announcing the new policy is here). "These 'banks' have brought unique and substantial risks to Second Life, and we feel it�s our duty to step in," said the posting. "Offering unsustainably high interest rates, they are in most cases doomed to collapse � leaving upset �depositors� with nothing to show for their investments. As these activities grow, they become more likely to lead to destabilization of the virtual economy."
"The vast majority of �banks� in Second Life are nothing more than fraudulent ponzi schemes, and this is positive step that will save a lot of people a lot of unhappiness in the long run. It is a smart move from both a business and legal perspective, and it stands as further evidence that Linden Lab is growing up and focusing on the long-term health of the grid."Over at New World Notes, Wagner James Au suspects the new policy is also about heading off potential lawsuits against Linden Lab itself from people who've been ripped off by in-world banks. He also focuses on the cultural implications:
"What is true is how the policy also diminishes a Second Life cultural value: the trust users are able to generate with each other from simply their in-world behavior, without even knowing each other's real life identity... Now, however, trust among avatars is not enough. You will also need written proof that your virtual currency service has a license to operate from a real government agency. Preferably one on hardcopy."The comments to that piece are well worth reading through too, incidentally. Meanwhile, SLNN has a number of opinion pieces analysing the news, including a personal viewpoint from Garret Bakalava who, again, approves of the move. "Right now and from what I saw over the last going on three years in Second Life, I believe that Linden Lab made a wise decision. I can even understand why they didn't make it sooner." On the same site, Aldon Huffhines agrees that the move is "long overdue and if done right will help grow the economy in Second Life", but also expresses concern about Linden Lab's 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." As an alternative, Aldon suggests that Linden Lab should promote community governance:
"They should help facilitate a Second Life Chamber of Commerce, a Second Life Exchange Commission, and other self-regulatory organizations. It should provide tools to help these organizations be more effective."Lots of opinions, and in the meantime, protests outside in-world banks continue, as does speculation around how likely a run on these banks will be before they close on 22 January... (pic from SLNN)
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