Second Life. How Much Would L$100 Be In Real Life Money?
NEW YORK (CNNMoney.com) -- If you lot're fishing to become the next business tycoon in the virtual world of Second Life, you're commencement going to need some Linden dollars.
Linden dollars - the currency of the virtual world which can be converted into existent U.S. dollars - are being pumped through the economy of the booming three-dimensional globe as more than people explore what information technology's like to alive a 2d life.
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Residents tin can buy and sell Linden dollars on the LindeX, 2nd Life'southward official currency commutation.
CNNMoney.com asked John Zdanowski, CFO of Linden Lab - the company that created Second Life - what information technology's like to operate a real market in a virtual world.
CNNMoney.com: Why did Linden Lab launch the LindeX Currency Exchange?
John Zdanowski: The Lindex basically facilitates placing value on the Linden in-world currency. At that place were a lot of other players doing it out there and we thought consolidating the book in one place would reduce volatility and improve the tradability of the Linden.
Q: Is the LindeX an income generator for Second Life?
A: It is, but it'due south a small portion - probably less than 10 percent of revenue. [Linden charges fees for currency transactions.]
Q: Has the Linden dollar always been a floating currency? Why not get in a fixed rate currency?
A: I call back the strategy of making it floating - in letting the market set up the price - makes sense to the states since we take a worldwide customer base of operations. More than half of our new users are from outside the U.S. It creates more flexibility, information technology'southward more interesting - and more fun.
Q: The dollar has been sliding against a broad array of currencies the past month, how has information technology been holding upwards against the Linden dollar?
A: The in-world economy has been growing so rapidly, faster than the coin supply, so there's been constant force per unit area for the Linden to appreciate confronting the dollar.
Merely we have ways to get-go that. In that location are Linden stipends nosotros offer to premium users. Another method we have for managing that is we can actually sell Linden directly on to the exchange. The tertiary method nosotros have for managing money supply is "sinks." When someone wants to practice something in-world, they take to pay a Linden fee for it. For case, uploading an image or a file - residents have to pay Linden to do that. And then those are the sources and "sinks" that help united states of america manage the money supply.
Q: So Linden Lab does monitor economic activity in Second Life and adjust the coin supply appropriately?
A: As much as we tin can. At this stage, nosotros have limited tools for managing [the money supply]. We'll pull the levers we have when we tin.
Q: Are at that place any controls in place aimed at keeping the Linden dollar stable?
A: There are "excursion breakers" at the wide level. There are limits on how much currency an individual tin can merchandise on a monthly and daily footing, according to how long they've been in world.
There are likewise controls confronting fraud - that's something other currency exchanges don't really take to deal with.
Q: How liquid is the LindeX?
A: Liquidity has been quite adept and information technology's been rapidly expanding when y'all internet out the activity Linden does on the LindeX.
There's been rapid growth as users take become more confident in the exchange itself. Nosotros can see increased conviction in terms of the Linden balances people hold - they've increased dramatically since nosotros implemented the LindeX.
Q: In the real world, demand for a currency is based on a number of factors - from interest rates to the level of economic growth. What is need for the Linden dollar based on?
A: Information technology's based on the fact that Linden dollars represent a limited license right to employ certain features of Second Life. In as much every bit the features people want to use in 2d Life are valuable, then the Linden is valuable as a virtual currency.
The other thing that makes it valuable is that people are willing to trade real currencies for information technology and accept confidence they'll be able to exercise that in the time to come. A lot of the dynamics are like the real globe.
At the end of the twenty-four hour period, growth of the employ of the world and growth of the services provided in the world determine the value.
Q: I of the reasons 2d Life has made headlines is considering residents have been prospering from virtual existent estate. Do you think there may be a housing chimera in Second Life?
A: I'm non sure it works that mode. The earth has been growing, but existent estate doesn't have the same dynamic equally in the real earth. In the U.Due south. there's a fixed amount of waterfront real estate whereas in 2d Life at that place's every bit much waterfront existent manor equally people want.
At that place hasn't really been inflation in the value of 2d Life real estate. Value is created more than past what people build on it and what they do on it rather than the land itself. If someone creates something cute and desirable, and so that tin have more than value for people than the base land.
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Source: https://money.cnn.com/2006/12/08/technology/sl_lindex/index.htm
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