Just read this press release that said Millions of Us, Inc, has hired Peter Phillips as their Technical Director. What does this have to do with Second Life? Peter Phillips was the creator of the LindeX currency exchange in Second Life. The press release also said the The Economist recently praised Second Life’s economic system for it’s “sophisticated management mechanisms”.

Millions of Us, Inc., an agency specializing in virtual worlds, has hired Peter Phillips as Technical Director. In his previous position at Linden Lab, Phillips designed and implemented the “LindeX” virtual currency exchange and essentially acted as central banker for the virtual world “Second Life.” Second Life’s economic system was recently praised by The Economist for its sophisticated management mechanisms.

As it develops trading systems for virtual goods on multiple platforms, Millions of Us will benefit from Phillips’ experience as manager of a major virtual economy and its component trade mechanisms. He will also lead the technical team at Millions of Us, helping the company’s clients achieve rapid entry into various virtual worlds with their virtual assets — including goods, celebrity avatars and themed content. Source: Creator of Second Life’s Virtual Currency Exchange Joins Millions of Us as Technical Director

The only thing I could find on the economist was this article talking about the Ginko bank collapse, A credit crunch in cyberspace - Trouble in paradise, which didn’t sound much like praise, as it mentions propping up Second Life currency if growth slows down.

Yet even before Ginko’s collapse, public opinion had turned against Second Life. This was in part because of the media backlash typical with an over-hyped technology, but also because reality has intruded online. Many users experience this parallel world as a lonely one, despite the existence of 7.7m registered residents as of June. Only 10% of new users are still active after 30 days and at any given time only between 20,000 and 50,000 are logged on. Most corporations hardly attract any online visitors, which is why some firms have already closed their branches. Real money is being made by only a happy few.

Still, Second Life is unlikely to experience the same hard landing as the market for sub prime mortgages. In fact, compared with other virtual worlds before it, Second Life’s economy and its currency have been tightly managed. To ensure that the Linden dollar does not stray too widely from an exchange rate of L$270 to the American dollar, Linden Lab uses a set of monetary instruments, allowing it to inject or mop up liquidity. It also intervenes on a Second Life currency exchange, called LindeX, which even features automatic circuit breakers if trading gets too frantic.

The real economic policy tests, however, are yet to come. Will Linden Lab be willing to prop up its currency if growth slows down (which it apparently already has begun to do) or if many users start selling their Linden dollars? Will the firm, which so far has preferred a laissez-faire approach, introduce regulation, to avoid further bank runs, say? If Second Life has trouble answering such questions, it can take solace from the fact that they are proving pretty tricky in real life too. Source: A credit crunch in cyberspace - Trouble in paradise

Obviously these guys are tooting their own horns about hiring the master of the Second Life economy, and since it hasn’t collapsed yet, I guess they can. I won’t be investing in any bank or Stock Exchange until we get one backed by real world money, like the Japanese bank mentioned here, Mizuho Bank to Launch in Second Life, if they indeed to connect their bank to Second Life.

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