Second Life Bans Banking
By in News, Webware on 10th January 2008Second Life (no thanks, it already feels like I’m trying to live more than my fair share of lives) suffers from the credit crunch. OK the global economy is in trouble, money is pouring out of the investing markets and the banks have stopped lending to each other, on top of all this the US sub-prime mortgage sector is collapsing having massive knock on effects around the world (The collapse and subsequent underwriting of the Northern Rock group in the UK, by the government has cost each man woman and child in the UK £1000, around $1900 dollars, so far.) And as a great man once said ‘As Above, So Below.’ Second Life has been in the news a great deal for everything from taking the sensible action of banning virtual bestiality (there is a joke about a Trojan Horse here somewhere) but now it seems as if the bottom has dropped out of the Linden Dollar.
Writing on the second life blog (http://blog.secondlife.com/2008/01/08/new-policy-regarding-in-world-banks), Ken Linden states that Linden labs is unable to protect users of virtual banking services in Second Life, and that there are serious questions about the legality of such institutions. Institutions providing banking services on Second Life have braced for a run on funds as the ban comes into place, the above screen shot is of financier, JT Financial virtual bank on second life, brings a whole new meaning to the phrase virtually bankrupt.
January 10th, 2008 at 10:01 pm
Get it right. SL cancelled banking not because of bankruptcy, but to avoid intentional scamming. What’s your real beef?
January 10th, 2008 at 10:13 pm
This is not a big surprise. Linden had been in trouble for awhile now and anyone with large amounts of currency should have seen this coming. The virtual currency/banking system is an illusion. Anyone who thought that it would be maintained in a system that is not regulated and overseen was naive at best. Smart people took their money as they made it, converted it into real dollars and withdrew it. I realize a lot of people will get hurt by this, but this is why you don’t leave currency hanging around for too long in the virtual world. Even Paypal, which is basically a virtual bank, could possibly be prone to such problems and it too is not regulated.
January 10th, 2008 at 11:01 pm
SL User, what part of this blog was wrong? SL have had to stop allowing banking services because of the grey legal area, not because of bankruptcy, I think that the article makes that point quite well, as for the bankruptcy comment, that was a reference to the hard times which are going to be faced by the PROVIDERS of the banking services if there is a run on the funds, not SL. Please take the time to read the articles properly.
sunken, you are quite right, all virtual currency/banking is an illusion, but then again so is all real currency and banking. Read any bank note in existence and it will tell you that it ‘promises’ to pay, not that it actually does pay the bearer the sum required.
February 10th, 2008 at 7:08 pm
This will help to avoid scamming so i think it’s not bad.
February 20th, 2008 at 10:55 pm
its not a big deal but may be it can help to avoid scamming but the scammer are really good now a days so deffed them its really hard work to do.