Archive for the 'Second Life Money' Category

Latest Second Life Financial News

December 19th, 2007 | Category: LindeX, Second Life Money, Stock Exchanges, Virtual Economy

From: Second Life Blog Economic Key Metrics for October and November 2007 Quote from the site - Key takeaways: In November, we had another slight reduction in overall Logged In User Hours (our first drop was back in August) that is related to the Unplanned service outages. Overall economic metrics continue to trend slowly upward, including the Lindex exchange figures and resident-to-resident transactions.

From: Second Life Blog Financial Statements For Everyone! Quote from the site - Many Residents use Second Life in a professional capacity. As such, being able to both keep and present detailed records of financial transactions is vitally important. To help you with this, we’ve added a new page to the “Your Account” section of the website: Account Statements.

From: Second Life Herald Op/Ed: Financial Myth Busting Edition Quote from the site - When Ted Castronova wanted to study a virtual economy, he decided against using Second Life. A number of people thought that was foolish because SL already has an economy. But SL is not like other MMO economies for two reasons; the LindeX makes asset prediction impossible and residents do not make predictable economic choices.

From: The Dewey Blog Second Life Quote from the site - A recent blog entry on foreign exchange rates elicited the comment/question, “Where would you class the Linden dollar?” The answer is that the Linden dollar is classed in 332.4 Money, given its including note for “other mediums of exchange.”

From: Wayne Porter Ebay powers Second Life and Live Gamer and Twitter Blackjack Quote from the site - Mashable reports on a new service that finally gives gamers what they want- a free economy of sorts. Backed with $24 million in VC from Charles River Ventures, Kodiak Venture Partners, and Pequot Ventures, LiveGamer went live targeting MMOGs with a platform to trade virtual goods. Andrew Schneider and Mitch Davis, (ad startup Massive sold to Microsoft) Live Gamer brings a sense of respecatbility to trading virtual goods. Suddenly that +3 Vorpal Blade of Troll Slaying takes on new and potent economic meaning.

From: SL Capital Exchange SL Capital Exchange to replace SkyRanger Hammerer Quote from the site - It is with some regret that I report to you that SkyRanger Hammerer has been relieved of his duties as SL CapEx Compliance Officer and is no longer an employee of the SL Capital Exchange or its parent JT Financial.

To be very frank, the MAJORITY of companies now listed are out-of-compliance in some manner or other - either via Errors and Ommissions in the requisite monthly Financial Reports (at MINIMUM an Income Statement AND Balance Sheet) in a GAAP-compliant format submitted no later than 10 days following the last day of each month, or in the mandatory WEEKLY UPDATES CEO’s are expected to file.

From: SL Reports Press Release: Goldflake comments on WSE notecards Quote from the site - The World Stock Exchange (WSE) has been distributing a notecard to the users registered at their website. While we commend the intention to inform and educate the users, we strongly disagree with section 3 (Banks and Exchanges) in the aforementioned notecard.

First off, the WSE claim to hold a 95% market quota is a joke at the best and we refer you to this post written by an independent and unbiased observer .

From: Orient Lodge Analysis of Second Life Exchanges Quote from the site - People have questioned how this 95% market share is calculated, and I must admit, I have no idea. So, I thought I would do a little digging into data available from the different exchanges. The International Stock Exchange (ISE) appears to provide the most detailed data, which can be aggregated.

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Second Life Financial News

November 26th, 2007 | Category: Banking, Second Life Money, Stock Exchanges, Taxes, Virtual Economy

From: Your 2nd Place Taxes……does that mean refunds? Quote from the site - You know I was sitting in the Emergency Room with my mom at hmmmm 3a.m. this morning….reading an August edition of Time magazine. Flipping through the pages I see, oh what do you know?….an article about Second Life….Second life and taxes…..I do not recall (famous last words) the dollar amount they say people made in Second Life……and if the government should tax those monies….well I for one hope they do!

From: Second Life Herald Midas Bank Insolvent - Trouble On The WSE Quote from the site - While there have been some concern about Midas Bank’s financials, no public signs of trouble occurred until November 2nd. Midas Commons released a notecard stating that an interest payment that was due on Hope Capital Bonds (HCB) was not paid. Midas reported having L$3.5 million invested in HCB. The Second Life Exchange Commission reports that L$650,000 was owed to Midas Bank as the interest payment on their HCB holdings.

From: Orient Lodge Commodity Trading, Coming to Second Life Quote from the site - Quanta was planning to set up a bank in Second Life where the deposits where backed by gold bullion at The Bullion Vault in Zurich. I’ve been interested in watching commodity trading coming into Second Life. I had a great discussion about this with Quanta when he first bought the land and I’ve been waiting for the next developments.

From: SLOz World Stock Exchange facing legal problems? Quote from the site - The Second Life Herald are running a story on the Midas Bank saga, alleging that Midas have done some legal investigations around their issues with the World Stock Exchange, run by Australian Luke Connell (LukeConnell Vandeverre).

From: Looker Lumet New Second Life “SLURRENCY EXCHANGE” to offer best rates, preferred programs. Quote from the site - Virtual world developer announced their new ventureinto the world of Second Life currency exchanges, with the openingof the SLURRENCY EXCHANGE,whose main office is located on theSimuality island

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Foundation For Rich Content New Round of Grants

November 04th, 2007 | Category: Earn Lindens, Grants, Second Life Money

FFRC Offers Grants Totaling L$75,000

The Foundation For Rich Content will offer up to L$75,000 (75 thousand Linden dollars) for the fall granting cycle. Applicants may request UP TO $25,000 per project to create rich content in second life. Applicants may also choose to request smaller funding amounts for smaller projects. Funding may be used to upload textures, acquire goods or services necessary to the project, to pay staff, or fund other requirements of the project. The deadline for applications is November 25.

Applicants are asked to fill out a very short form to describe the project.

More information and to fill out an application, click here.

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More Camping and Making Money in Second Life

November 02nd, 2007 | Category: Camping, Earn Lindens, Second Life Money

Interesting post from New World Notes on a new style of camping site in Second Life, Puerto Banus is paying models to walk up and down the catwalk wearing their traders’ designs and other designs in SL, referring to is as ‘earn as you go’ job, if you can call camping a job, rather than sitting in a chair somewhere just to boost traffic. This sim is constantly in the top 20 in foot traffic, so it’s certainly boosting it’s traffic, but it has the added functionality of being able to see the clothes in action on the models.

When Tateru and I began our search for genuinely popular communities in Second Life, free from camping chairs, we briefly scratched our heads over Puerto Banus, a place that’s consistently crowded and in the Lindens’ Top Twenty sites by foot traffic. On my first visit, I saw dozens of fashion models striding along a row of catwalks in a kind of fantasia Miami Beach locale. Must be big hangout with fashionistas, I thought, and teleported off.

Tateru wasn’t as amazed: “It’s just camping chairs.” Source: Model Camper: Free money site adds ironic new twist to camping chairs

He even noted that it seemed that every avatar there was afk, away from keyboard, so, he says, Second Life itself was virtualized. A comment from Vint Falken noted another camping spot, one that let you roam around and actually do stuff while you were camping. It’s an Italian energy drink sim, and all you have to do is attach a can of energy drink and while you are in that sim, you are earning some free lindens. Neither mention how much you earn or give slurl’s to the camping spots, I will find them later when I am inworld and add them to this post.

The slideshare embed below is called How to make money in Second Life, and it is kind of funny, it still has references to casinos and shows a Ginko Financial terminal in the next to the last shot. Don’t do it buddy!

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Saving Lindens and Inworld Fashion

October 31st, 2007 | Category: Second Life Money, Shopping

Just some news and posts about sales and fashion in Second Life.

Laynie’s Weekly Wrap - Oct 31, 2007 Then I popped over to Diversity for their sale. That Cobain style everyone’s been wondering where it is? It’s back, and retextured so it’s even better than before.

Unique Skin… Made Affordable by Tête à Pied It looks like skins are the new black on the grid. Everyone and their mother seem to be determined to make skins. I’m not judging the quality of the efforts here, but it is hard to keep up with the industry these days.

Calico Creations Items reviewed: Elizabeth, Diana, Sarah II and Calico hairstyles.

As mentioned before in my silent sparrow review, I met Ms. Ingmann through the Simone! Supermodels contest. I won’t rehash, you can go read the silent sparrow review. I’ll also note that I was supposed to be showing Calico hair at that show I couldn’t model in, sooo… here’s the review instead! Hope that makes up for it somewhat. I’ve been meaning to do a review on her hair anyway, since I wear it a lot and use it in my jewelry ads.

Review of Fetch Alternative! I’ve got more pics than usual for you, so pay attention. There is some cute clothes from Fetch Alternative that I want to show. The designers are Vanessa Cardway and Matteus Boa. I was lucky enough to score a pair of jeans that aren’t even out yet, and I practically live in jeans, so I am a happy girl!

Twinsanity! Lots of bargains listed at the bottom.

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Ginko Financials CEO Hits the Door

There has been so much transferring and bullshit going on with Ginko Financials, I don’t even know where to begin anymore to try to explain what happened. The most recent activity has seen the CEO say he can’t make the interest payments anymore, and he has transferred everything to the aptly named WTF, or WSE Traders Fund, and is washing his hands of it.

I also thought I could do partial liquidations and use the money to lower our debt proportionally. However, first with the ban on buying bonds for less than the face value and later with the gradual erosion of our investments, both of these things ceased to be possible and my position became even weaker than it was when I created the bonds. The
fact is, there is no way for me to meet this quarter’s interest payment. Neither of our main in-world investments got off the ground (BNT and HCL), though they may still do so sometime in the future. The stocks are too weak to be sold to help meet this quarter’s interest payment. The L$2,400,000 we have inside Allenvest, despite Allen’s lie about me having withdrawn everything, are locked and probably lost forever.

The situation is such that I am left with no choice here. The bonds need
to be converted to a fund, which will hold these assets. Namely, the WSE Traders Fund (WTF) already listed on the WSE. Interest payments are no longer part of the equation and as I am transferring the assets to Luke, I will no longer be involved with anything regarding Ginko Financial as it will no longer exist. Assets previously held by Ginko Financial are being
transferred to the WTF. Source: Ginko Perpetual Bonds Important Announcement

The SLNN in an aptly titled article, Ginko CEO Escapes, I say aptly named because it is in a folder called bank robber, check the url when you get there.

Today, Ginko Bank CEO Nicholas Portocarrero posted a statement on the World Stock Exchange Web site saying he will not be paying any interest on bonds, allowing himself a back door to escape with $750,000 USD.

But Saturday, Portocarrero said he could not pay interest on the bonds and pinned partial blame on actions taken by banker Investor Allen, and the weak face value of his bonds. Source: Ginko CEO Escapes!

There is still a little bit of hope however, as Shaun Altman, majority bondholder of Ginko Perpetual Bonds (GPB) is taking it upon himself to see to the equitable liquidation of GPB’s current asset’s and to the timely compensation of all bondholders.

I will be charging nothing for my liquidation trust service. I believe that GPB bondholders have been through enough at this point, and have a right to recover as much as they can from this fiasco. Being the person with the most GPB bonds, as well as a neutral third party to asset holders, makes me the right person to handle this liquidation. The ball is already rolling, so I ask that all bondholders recognize this, and recognize that I am working in all of our best interest. I hope that it makes you happy to know that someone is finally working in YOUR best interest for the first time in a long time. I hope that I will be able to recover a sizable portion of GPB’s assets for distribution to all of us, but I can’t make any promises. Source: Ginko Perpetual Bond Liquidation Plan

Check that post for the exact way he plans to carry out the liquidation and distribution of the GPB assets. Let his be a lesson for everyone, if the bank is not backed by money to start with, then you are gambling with your lindens and we know how the Lindens feel about gambling.

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Was/Is Ginko Financials a Scam?

August 08th, 2007 | Category: Banking, Scam, Second Life Money, Stock Exchanges

Ginko Financials is apparently experiencing a run on their bank, meaning everyone wants their lindens out of there, and who can blame them with all of the shady stuff that appears to be going on in the unregulated world of Second Life finance. What can be going on there that they still offer a .10 daily interest rate, which works out to about 44% interest for the year, a pretty good return no matter what the currency is, as a matter of fact it’s still too good to be true. Ginko’s interest rates have always been high, and most banks in SL appear to be offering rates that are too good to be true. So, combine the theft at the WSE, the problems with Ginko and the fact that lindens are not backed by anything and are pumped into Second Life at the discretion of the Lindens, and we have a recipe for disaster, and this recipe is about done. Check out the notice posted in the Ginko Financials website, I have pasted the relevant parts below.

About a week and a half ago, we saw an increased number of withdrawals; the time to speculate as to why this happened has since come and gone, so I will leave it at that. No matter what started it, the result is the same: We have expended every possible short-term resource, and are still unable to meet the current demand for funds. We have attempted several different things to remedy the situation (which is in short why the interest rates and limits have fluctuated wildly), but none of them turned into a viable permanent solution.

For the time being, we have decided to continue doing business normally, but leaving the withdrawal queue in place with an expanded L$1,000,000/day limit, to give an indication as to where the end of this situation may be. However, a realistic estimate could possibly extend in to the realm of several months.

For those of you who wish to withdraw your funds, you may wait in the queue, or cash out to Ginko Perpetual Bonds, which is currently the only option if you don’t wish to wait the seemingly indefinite period of time it could take to refill the reserves. Source: Ginko Financials

So, they are taking deposits still and they are then paying those deposits out to existing customers who are trying to get their money back. How is this possible and how can they “look” their new customers in the avatar and feel good about letting them think they are actually going to be able to get their money out. I read somewhere that they just kept a little bit of the lindens on hand and invested the rest, what happened to all of the money they took from depositors in good faith? Why have they not liquidated all of their holdings to pay back their customers? A post at your2ndplace, a great blog that has been on top of this the whole way, asks this question.

A Coincidence?

But there is something in common with HCL, GPB and GCS. Nicholas Portocarrero is the major shareholder in HCL - which, by proxy, puts him heavily invested in WSE. And guess who is listed on GCS and GPB as a Non-Executive Director? Lukeconnell Vandeverre, the CEO of HCL.

Is it a coincidence that these two names have been coming up a lot in the timeline since the WSE was ‘hacked’? Doesn’t it seem odd that when Nicholas Portocarrero is having trouble raising enough money to handle withdrawals that he would be investing in Hope Capital?

What’s going on here? I’m not saying anything - but there are the facts right there. How do we explain these facts? Source: Peering Into The Depths of Ginko Financial

Many have said that what Ginko is doing is illegal and most certainly fraud, and it certainly appears that way to me, taking one persons money in good faith and passing it right out the ATM into someone’s hands who are trying to get out of this mess. Benjamin Duranske of Virtually has a huge post about the Ginko Financials troubles here, Commentary: Ginko Wrapup - No AVIX, IPO, or Funds and he says this won’t be over until someone is in jail.

If what you were saying was true, then they would close down deposits. What this indicates, to me is two things. 1) at some core level, they actually believe this might magically still work, and 2) they are hoping that as long as they leave it running, they won’t be prosecuted or sued.

But leaving deposits open when they go DIRECTLY from the depositor to the pocket of a previous depositor is so transparently criminal that I can’t even give them much credit for #1 any more, and I’ve been someone who has consistently said they bought their own nonsense, even as one of the loudest critics of their facially illegal methods.

Think about this — they knew how much money they had five days ago when they were offering 148% interest on 30 day term deposits. You think they’ll be paying those in, now, 25 days? Every penny that they take right now saying it’s a deposit that will earn interest is undeniably fraudulently received. Source: It doesn’t count for anything…

I wonder how the Lindens think their no banking policy because we don’t want to make everything complicated is working out now?

Added: Ginko Financials shutting down And Ginko Financial Closes It’s Doors (Updated:10:06 pm SLT - Now Official).

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Is Second Life Headed for an Economic Recession?

August 06th, 2007 | Category: Investing, Recession, Second Life Money

Sure sounds like it after reading this post by Matthew Beller, The Coming Second Life Business Cycle, as he mentions the Lindens are controlling the amount of Lindens that are being released, and they control the value of those Lindens when compared to the US dollar.

In the Terms of Service, the L$ is defined as “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.” By defining the L$ in such a way, Linden has granted itself the power of a central bank in managing Second Life’s equivalent of a fiat currency. Linden can create as many new L$ as it wants, whenever it wants, and spend them or give them away at its own discretion. Also, because Linden maintains a peg of about L$270=US$1 on the LindeX, it gives the appearance that the L$ is as good as real-world money.

Fiat currencies are subject to much criticism, particularly by Austrians. However, they are not criticized because they cause undesirable economic distortions in and of themselves. Rather, they are criticized because, unlike commodity monies such as gold, they can be created from nothing, so are highly susceptible to artificial expansion and manipulation. This expansion, as the Austrian theory of the business cycle shows us, is the source of economic distortions that lead to unsustainable booms, followed by inevitable busts. Source: The Coming Second Life Business Cycle

After going into his strong evidence that the Lindens have unnaturally inflate the Linden supply, he lists a couple things that could happen because of it.

In the first, Linden will stop running significant deficits at some point. With less L$ available to spend, residents will demand fewer goods and services, leading to lower prices and reduced profits. Previously profitable enterprises will go out of business and the wealth of many residents will decrease, slowing overall economic activity.

The other possibility is that Linden will continue running deficits to the point that a sufficient number of residents and speculators will recognize the L$’s frailty. In what Ludwig von Mises referred to as a “crack-up boom,” everyone will scramble to redeem his L$ for “real goods,” which, in the case of Second Life, is probably the US$.

To summarize, it appears very likely that Second Life will experience at least some form of economic recession. Depending on its severity, it might result in Linden’s losing many of its customers. If Linden wants to prevent this from happening and foster a stable, growing economy within Second Life, it should apply the lessons of Austrian economics to its policies: abolish restrictions on content, strengthen the ability of residents to enforce their property rights, and, most important, tie the L$ to a real-world commodity money backed by 100% reserves.

Looks like we could be, guess I’ll look into selling some of that land I just bought. This article is definitely worth the long read.

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Second Life Coins Available, Sort of

August 02nd, 2007 | Category: Second Life Money

Cold hard lindens are now available, sort of. An IBM employee, avatar name of Davidovic Dean, has minted his own coins that are worth 1 linden apiece on Tender Island. He minted the coins to commemorate his island coming online, there are 25 silver coins, that will be for non-commercial purposes, and 50 made out of nickel, some of which have already been sold and are being sold on eBay, here.

Second Life Lindens

The latest: an IBM employee with his own private island in Second Life has had some coins minted that are each worth one Linden dollar. That’s right, you can now hold the Linden dollar in your hand and actually spend it — if, that is, you’re on »Tender Island«, which has been owned by IBMer David van Gent since March.

The coins come complete with an “SL” mintmark, and are “accepted as legal currency on Tender Island.” Before you get your knickers in a twist over who’s allowed to mint coins denominated in a particular currency, keep in mind that in the U.S., at least, creating your own tender is perfectly acceptable — you can print all the money you want (as long as you’re not counterfeiting dollars), it’s just a matter of whether you can get anyone to accept it. Linden Lab, of course, is not a government. But their rhetoric (”I’m not building a game, I’m building a country“) indicates there shouldn’t be anything objectionable in Tender Island coins.

A few of the coins were made available on eBay, where they went for $26.61, although I can’t tell how many were included in that auction. In any case, only 75 coins were struck, which means that the eBay buyer is paying collector’s prices, not foreign exchange prices. Van Gent (SL’s Davidovic Dean) is now considering other series of coins. I doubt this is much more than an interesting experiment and something to do with some spare time and cash, but it’s still very cool. Source: Cold Hard Cash: Second Life Coins Available

I can imagine a lot of people would like to be able to hold their lindens, but with only 50 being available, that will be hard to do. Myself, I would like to see Davidovic send me one, but wouldn’t we all. Here is how he described the marking on the coins.

X,Y-1058, 1160 represents the location of Tender Island on the Second Life grid. This is a so called Second Life Island 3 type. It measures 65,536 square meters (about 16 acres). Building on the island, includes above the island. There has recently been ‘built a castle in the air’ with a sky box on top of one of the 4 towers, and a ‘romantic garden in the clouds’, aka as the ‘Elysian Field’ of Tender Island. Round the lake in the middle of the island you find all kinds of constructions and entertainment.
Under the embossed ‘1′ you will find a ‘SL’ mintmark.
This coin is accepted as legal currency on Tender Island.

The reverse of the coin features our family coat of arms, depicting a Northern Gannet (Morus Bassanus). In Dutch we call this a ‘jan-van-gent’ bird. Source: Second Life Tender Island minting

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