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SecondLife Bans Unregistered In-World Banks
Posted by
timothy
on Wed Jan 09, 2008 02:59 PM
from the it-all-seems-a-bit-fictional dept.
from the it-all-seems-a-bit-fictional dept.
GuruBuckaroo writes "Virtual Ponzi schemes — pardon, "Banks" — have finally been given the boot by the policymakers at Linden Lab's Second Life. According to the company's latest blog post: 'As of January 22, 2008, it will be prohibited to offer interest or any direct return on an investment (whether in L$ or other currency) from any object, such as an ATM, located in Second Life, without proof of an applicable government registration statement or financial institution charter. We're implementing this policy after reviewing Resident complaints, banking activities, and the law, and we're doing it to protect our Residents and the integrity of our economy.'"
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That should've been done day one. (Score:5, Insightful)
Morons.
Re:That should've been done day one. (Score:5, Interesting)
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However there's one big difference. In SL, there's anonimity. There is no recourse. There is no sort of court or penalty available.
In RL (actual society of a mythi
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Yes, the fantasy of the Ayn Rand unregulated perfect market always comes crashing down when human nature gets involved.
As much as people hate to admit it, regulation is a necessary part of society. You just have to hope for the right balance. Too little
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Look at social animals. Those that live in groups. There's always an alpha.
Re:That should've been done day one. (Score:4, Informative)
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This really should have been a given. IRL in an anarchy without regulations, you can still find the corrupt bankers, tie them to a tree and let them starve while crows peck out th
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As long as you don't exploit game bugs to exploit others, you are ok.
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No, it's an open invitation for there to be gaming because it's a game.
Virtual Trust? (Score:5, Interesting)
Re:Virtual Trust? (Score:5, Funny)
for (counter = 0; counter < 100; counter++) {
sprintf ("People are stupid.");
}
Re:Virtual Trust? (Score:5, Funny)
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I think there's a rather obvious problem with that. The print line should be:
sprintf(stdout, "People are stupid.\n");
Otherwise it doesn't compile.
(Disclaimer: Yes, this is intended as a joke.)
Re:Virtual Trust? (Score:5, Interesting)
There's a simple answer to that. People are stupid. They think that money grows on trees and all they have to do is give it to some virtual "bank" and they'll enjoy some staggering rate of return. In truth it is the idiots who follow on behind who are paying the interest for the ones in front.
I expect SL has become very popular with con men for this reason. Wouldn't surprise me at all if all sorts of ponzi schemes, pyramid scams, matrix scams, and just plain old fashioned fraud happen every day on SL because there is so little regulation and a lot of gullible people within easy reach.
Remember kids... (Score:4, Interesting)
The crooks may still wear black, but they pack all new weapons now.
Re:Remember kids... (Score:5, Funny)
free advertising? (Score:2, Insightful)
Re:free advertising? (Score:5, Funny)
My sentiments exactly. And I work with hundreds of nerds/engineers/etc.
All of the people I know seem to have first lives.
Run on the banks? (Score:5, Insightful)
Just like the real world.... (Score:3, Insightful)
Let's see if real banks move in (Score:4, Insightful)
Being a bank in Second Life isn't very attractive to real banks, because they can't create money in Second Life, like they can in the real world.
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In what way can a bank "create" money in the real world?
They can't issue or print money. All of their assets a
secondlife must be the most hyped concept ever (Score:3, Insightful)
Don't you have a better way of spending your money ? Most fads on the internet I can sort of understand what they're about and what their 'pull' is but second life is one step too many for me to follow.
Entropia Universe (Score:2)
Last year, 5 banks opened up in Entropia Universe, each with a minimum of $100,000 capital for making loans. You can check your in-game items
First They Came for the Gaming... (Score:3, Insightful)
Now it's the banks.
What good is 2L if you can't virtually explore the things there that aren't possible, safe, legal, or some combination of all of these virtually? I don't need every part of my life to have training wheels.
So how long before virtual sex entirely is gone too?
Followed by avatars who are too sexy, or provacative.
2L was a place were you could learn life lessons by being stupid. Now it seems intending to become one of the more restrictive Middle East countries instead.
Job Opportunity! (Score:3, Funny)
Brett
SL Imitates FL (Score:5, Insightful)
We're seeing the exact process by which people create governments to protect our rights. Since SL already had what was equivalent to tribal and voluntary governments, we are seeing something much like the process SL'ers learned about in history.
But you do this already (Score:4, Interesting)
In the olden days "dollar bills" wire actually silver or gold certificates. You could trade these paper certificates for the actual gold or silver. Prior to this, you'd carry it in a coin purse. But the paper money while more subject to wear, was lighter and literally more flexible and therefore comfortable. A US Dollar was based off the Spanish dollar and was settled on 371.25 grains of
This limited inflation (the only way to deflate the currency was to send bankers to the hills to mine metals) and was real value.
Then in 1913 two things happened: we got the Federal Reserve and the 16th amendment. These two institutions, both once non-existent, rule the country today. With the creation of the FR the US borrowed money from the FR ]]at interest[[ setting up a positive feedback loop of inflation. In order to do this they also had to decouple the money from the metal backing, which was completed in 197[2?] under Richard Nixon. If you want to see real inflation, it is measured in the M3 statistic, which the Fed stopped publishing recently. But you can see it here [shadowstats.com] Instead of talking inflation, the Fed tries to talk CPI - which is an aggregate from several industries. Notably absent is the mortgage market, which ask anyone, its costs have doubled in the the past 5 years. But the CPI leaves this out, and only includes rents, which have stayed disproportionately low because of all the house seekers.
Today the paper you move about is as valuable as those bits in the computer. If the word "certificate" appeared on them it would be completely a different situation. You could go to the bank and get metal, whose value wouldn't ever go down. But now, you can't expect to leave $30,000 in the bank and have the same buying power 10 years later. Over the last 90 years, the dollar has fallen to just $0.04 of its original value, as valued by the silver market.
But getting back on topic - any kind of calamity that shakes the confidence of Americans will affect the buying power of the dollar. Not a new vein of gold, not a run on banks, not a stock market crash. The only absolute value is cold hard cash. And by cold and hard I mean a metal.
--Epilogue--
I often wonder what all this means int he grand scheme. If you have money, this is an issue. If you have debt, it is actually a good thing because debts are paid off with future, depreciated money, and they take that money at face value. (Which an old bill is rarely worth.) The key here is to have one foot in both areas: pay off debts with inflating currency and have your investments in metals-backed currency.
There has been a movement to inflation-proof currency, known as the Liberty dollar. These were negotiable certificates which actually were redeemable for metal. The Federal Reserve shut it down and seized all the silver, because this, while completely legal, are the one thing a person can do to retain control and live outside the system. If it ever got popular (and I believe it would, particularly in times of inflation) the Federal Reserve would have competition that couldn't be influenced by it. The important thing to note is that it would be no different of a situation than America, pre-1913.
Finally, note that the Federal Reserve is not Federal (it is private) nor is it a Reserve (it holds nothing - the gold it once held is unaccounted for.) The only worse-named entity is Social Security.
Re:good time to become a loan shark (Score:5, Interesting)
Second, gold doesn't have intrinsic value at all. The value of gold fluctuates all the time. All the gold standard did was fix the price of gold. While the gold standard was tenable for a time it didn't work in the long run because it's not stable. Your money supply is dependent on your gold supply which in turn limits your economy. You can't have more dollars than your fixed ratio to gold. New discoveries of gold can also create deflationary shocks.
There's nothing special about money at all. It's a medium of exchange. It has what value we agree it has, no matter if the medium is a piece of paper or a string of bits or a hunk of metal.
Re:good time to become a loan shark (Score:5, Interesting)
The way it's set up now every country in the world is gunning for bankruptcy in the end. You can't sustain a system of constant debt growth forever. We need to find something to base money on that isn't a commodity controlled by the few and also isn't debt. Or we can just continue to fight wars and reforming nations and start over every time the debt ceiling is too high.
In regards to the article, I find it hilarious that you can't even run a virtual bank without a real life charter. That just slays me. I think the line between virtual and real just blurred beyond recognition.
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2. Adam Smith solved this problem about 300 years ago... Tell me: What
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No, its not. Even if it was, so what?
What fly-by-nig
Re:good time to become a loan shark (Score:5, Funny)
Re:good time to become a loan shark (Score:4, Interesting)
http://video.google.com/videoplay?docid=-9050474362583451279 [google.com]
Watch it. Learn. Our system of currency is based on nothing more than a pile of lies and a mechanism for transferring wealth into the hands of the wealthy. It is also based on perpetually accelerating the rate of growth, which is so laughably unsustainable that it's amazing it has lasted this long.
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If you think any of that has any truth to it at all, I've got another paranoid delusion to show you.
http://www.loosechange911.com/ [loosechange911.com]Re: (Score:2)
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Let's instead move to the Uranium-235 standard, or
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No on is being "robbed" of anything. Money is a medium of exchange. Failing to exchange it for something of value may result in its value changing before you do so. The extreme short-term volat
Re:good time to become a loan shark (Score:4, Interesting)
I am sorry, but that's simply incorrect. A check is a draft. As described by the UCC article 3, it is an order to pay. That's why all checks have the words "pay to the order of" on them. A check is a written instruction to a storage institution (ie, bank) to pay (or transfer ownership) of what you store with them. It is distinctly different from as a promise (such as IOU) in that you cannot be sued for writing a check. While it is against certain laws to write "bad" checks, the act of writing a check itself does not create a liability to the person to whom the check is written. No promise is made there. If you make a promise (as with an IOU), you do create a liability -- you can be sued for not fulfilling the promise. As for the claim that a check has to be drawn against a government-backed currency, that's pure fantasy. It is nothing but an order (a command) to pay to the presenter (or to the person whose name is written on the check).
You are correct that bank notes are in fact notes (ie, promises). But I wasn't arguing for bank notes. I was saying that some banks may be trusted enough that the notes that they issue will become "as good as gold" as the expression goes. But would only be because they have the reputation of paying out the gold upon presenting of the notes. The first time they fail to pay, their promise would become worthless. Bank notes would be rated in much the same way as the bonds are currently rated -- by their trustworthiness.
Not all those layers were solutions. Some did occur naturally to fulfill market-place needs, but some were not. Fiat currency did not solve any problem other than the government's need to issue as much money as they saw fit. That's bona fide debasement.
When I say that these issues have been resolved, I'm referring to the fact that the argument for the central bank (as proposed by Hamilton) have been thoroughly reviewed and consequently rejected by the writers of the Constitution. The banking system was perfected about fifty to a hundred years prior to the American Revolution. It was perfected in England where the practice of writing checks to banks and using bearer checks as currency started. Fiat currency is based on trust and trust is not something that can be demanded (as is the case with anything dictated by law). Trust is only something that results from people's own judgments. In the absence of trust, the exchange must involve something that has unquestionable value. The fungible nature of commodities makes them perfect as a medium for such exchange.Re: (Score:3, Interesting)
A check is an order to the bank. To the recipient, it is a promise that there are sufficient funds in the account to cover the draft (and
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That's because people are stupid.
Changing to commodity or representational money will not change that (if anything, it will be a symptom that that problem has gotten worse.)
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In the end, currency is only worth what people agree it is worth. It bears re
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I find yo
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