Jan 24, 2009

Linden Lab as Metaverse Central Bank?

I frequently tell people that although 95% of what I speculate upon turns out to be wrong or stupid - or both - 5% has some value. For example, earlier this week, I set out to my colleagues at work a plan to make life on earth less stressful based on changing the earth's gravity. The plan was to establish an international drilling agency that would position deep-drilling wells all over the earth with the sole intention of removing as much of the earth's core as possible. By then shooting all this off into space, we could reduce the mass of the earth, thereby reducing the gravitational field, therefore making everything easier to do.

Although this is logically sound and, given the will, technologically feasible, it probably ends up in the 95% option.

So as a way of trying to get myself back into the 5%, I thought I'd re-post a comment I made in the Second Life Herald two days ago. It relates to the recent acquisition of XStreet and OnRez by Linden Lab:

“Although not an avowed aim of Linden Lab, I note that this move to have more control over the handing of a virtual economy might well be a marketable asset to other virtual worlds. Sticking my neck out a little further, LL may well be positioning itself to operate as a virtual ‘Central Bank.’

“Imagine you have created a new virtual world and want to encourage commerce (which is also the same as saying ‘want to make a profit yourself’). What if you could have all the financial transactions handled by a third-party, to whom you pay a percentage on transactions. That would have to be worth thinking about.

“Banking is simply a business like any other. As more virtual worlds appear, they all need to consider how to handle commercial exchange. Rather than have idiosyncratic currencies, imagine having a single currency. That's a nice thing. You might not call it the Linden but whatever it is called, I’d sure like to be the one making it all happen and taking 0.1% of all transactions.

“And if I'd like that, you can bet Linden Lab would too.”


Alanagh Recreant said...

I don't think this is far-fetched.

I think we will possibly hear about LL collaborating with a group such as FirstMeta with (as I understand it) real world banking connections. So, we will be watching this space with much interest....

Siggy said...

Yes. The buzz word in the mechanics of virtual worlds is "interoperability" - being able to move avatars and things between worlds.

But the word is just as applicable to capital, which means that s standardized unit of exchange and an efficient way to do it is crucial. Imagine being able to skip from Second Life to Kaneva to There to WOW and flashing your MetaCard to buy stuff; cool, huh?

So anyone with a piece of this would be fairly happy.

Rob said...

Um. Yeah, this one is pretty obvious. I do think the currency will move from Linden dollars to real dollars, as is already available on both of those sales points. I personally think in-world currencies will all ultimately fail giving way to real currencies and integration such as we have seen with both digital 3d commerce sites.

Detune said...

Linden VP Joe Miller, known as “Joe Linden,” said this in a Reuters interview, about Linden Lab’s long-term strategy, Jul. 11 2008:

“I could see Linden offering economic services, trading services, search services,” Miller said. Some OpenSim worlds may respect Second Life’s intellectual property protections and commerce functions. The Linden Dollar, with a years-long reputation of solid financial backing, may be positioned to become the gold standard of virtual currencies.

Miller also referenced the role VeriSign plays in the administration of the Internet by managing top-level “.com” and “.net” network addresses. Linden may one day play an active role in not only teleports between OpenSim worlds and the Second Life Grid, but between two otherwise unconnected OpenSim worlds."

/Speedmaster Bing

Siggy said...

Great quote there, Detune, thanks! Gee, and I did my best to read Reuters regularly and I still don't remember that one. Oh the shame! Rest assured I'll be going back and bookmarking that one for an upcoming article.

Mony said...

I absolutely looove the plan to make things lighter on Earth. The perfect icing would be to put together a committee of accountants and web designers. Hey we can even run tests on SL that way we wont hurt anyone and will see if it works.

Will that Banking system lend money to virtual business? Something tells me I wont get old enough (in SL) to see this happening.

What about an Insurance service to protect the value of lost inventory?