Second Life Virtual Property Boom 242
The Guardian Gamesblog has an interview with Philip Rosedale, Second Life's CEO and Founder. In the wake of last week's virtual property slaying, they discuss the realities of owning something intangible. From the article: "We launched Second Life without out of world trade and after a few months we looked at it and thought, 'We're not doing this right, we're doing this wrong.' We started selling land free and clear, and we sold the title, and we made it extremely clear that we were not the owner of the virtual property. USD$.4m a month is traded directly to world markets in Linden Bucks on Gaming Open Market. That's USD$.4m redeemed, or Linden Bucks turned into US dollars. In May 2005, the total amount traded in-world was USD$1.47 million. There were 1.3 million transactions between 19,500 unique users."
I have a bridge for sale (Score:5, Funny)
Intangibles always bust (Score:5, Interesting)
In the case of dot.bomb we had a bunch of non-viable businesses and ideas with no effective business plan that could not stand up to scrutiny. Unfortunately a lot of other viable ideas/businesses got burnt too.
The same goes for pyramid selling schemes. While there are new suckers/members to join up and fuel the system everything is great. Once the sucker/member fuel runs out they crash.
I recall a business selling Kruger Rands about 15 years ago. A Kruger Rand is just a minted ounce of gold, so has the tangible value of an ounce of gold. This crowd, however made a business of adding an enhanced value based on the condition and minting marks, coining phrases like bloom, sheen etc. Some coins sold for 5 to 10 times their tangible value. Eventually this bust and many people got burnt.
Re:Intangibles always bust (Score:4, Interesting)
Second Life was one of the first major financial movers in the virtual worlds department, which started as a simple 3D version of the text based MUSH/MOO style 'games' which have been around since the 80s. The major difference is they started as a purely commercial venture.
Such virtual worlds don't yet have the draw that a more accessible game such as Everquest or World of Warcraft does. MMORPGs have goals that seem much more self evident, which allows casual gamers to more quickly value the bits that make up their virtual characters. However, as the wired generation grows up we will eventually have a world full of people who can more easily make that connection and are more than willing to pay money so they can look good in the exclusive Black Sun. The term "Persistent World" will take on new meaning as the few major players who have fostered the largest communities will kick off the next major revolution when they establish and share protocols so players can freely move their Avatar and virtual objects from Matrix to Metaverse.
Theory of Labor (Score:3, Insightful)
There actually is a tangible aspect to virtual property...the time and effort used to produce the property. The theory of labor pretty much sees the amount of labor needed to produce a good as the major component of the price. The price of gold is largely determined by the amount of effort it takes to get find and get more gold.
The reason virtual property is a bad investment is that the people who define the virtual world can change the rules and change the time needed to create goods. People in power changing the rules happens all the time in the real world too.
BTW, I doubt you will find any investment tool that does not have legions of people telling stories of how they were burned by their investment.
Re:Intangibles always bust (Score:2)
Not anymore. It's all theoretical now, baby.
Or did you really think that there's enough gold in Fort Knox to redeem the entire US paper currency float?
Re:I have a bridge for sale (Score:3, Funny)
Yes, but do they run Linux?
Re:I have a bridge for sale (Score:4, Informative)
Second Life is just like the web, but wrapped in a pretty 3D virtual world - it is primarily a place where you can create and host content for others to enjoy (and purchase).
Land is a metaphor for server space. The money you pay is for the server resources. There is a finite amount of them per server (65536 sq.m.)and if you want, you can even buy your own server. Some people own more than one! Even major RL corporations are starting to hit SL - if you're a student, or unemployed, you could get yourself a real job!
Artist? Programmer? Just plain bored? Join Second Life [secondlife.com] - I've been there for over two years and will never look back.
You can build just about anything out of simple geometric shapes and make it come alive with a powerful, yet simple scripting language that uses C/Java style syntax and an event-driven paradigm.
Check out the language reference and see for yourself! [secondlife.com]
Second Life even includes a full fledged physics engine called Havok [havok.com], which is rapidly becoming the industry standard.
It is truly a geek's dream come true, and no one on SLASHDOT of all places should dare criticize it - we have a whole section devoted to LEGO and SL is at the very least LEGO on steroids
Heaps of screenshots [sluniverse.com]
Re:I have a bridge for sale (Score:2)
Re:I have a bridge for sale (Score:2)
Re:take your 'magick healing powder' and walk (Score:3)
This "economy" won't last (Score:2)
Of course, once one of your bridges is erected and in service it will never need to be replaced nor maintained. The market for bridges will dry up. This, I think, is one of the flaws in this model of selling items in these game worlds.
When I buy a t-shirt, 10-15 years later it's quite likely to have deteriorated to the point where it is no longer able to perform its job well. Likewise a car, or indeed a bridge, though each with a different average lifespan. Real items get broken, lost or even just worn out. When I buy a "car" in Second Life, I own and can use that car. That car will work forever and the game (presumably) makes it quite hard for me to lose it. Assuming no artificial barriers are erected to prevent it, there's no technical or physical reason why I can't duplicate and resell copies of that car.
The economy in these worlds is driven by novelty. The only reason I'd buy a new car is because the creator has done something wacky that can't be done by my existing car purchases. Eventually a point will be reached where no more innovations are possible, because all of these virtual worlds have their limits. I understand that Second Life's are less limiting than most, but given that it's been going for a few years now I'd expect that players have done just about everything that can be done with cars. Once there is no more room for novelty, there will be no point in buying anything. Everyone will own everything they could possibly want, and have no reason to replace any of it. The "exchange rate" beween their in-game currency and real-world currencies will suffer. Items will be so widespread that there is no scarsity to warrant non-trivial prices.
I hope no-one that is currently drawing a wage out of their activities in Second Life is relying on that lasting.
Re:This "economy" won't last (Score:2)
The economy is in no more danger of dying than the "real" software industry.
so.. (Score:4, Insightful)
This is one huge ass scam type deal, yet totally legal and ingenius. Even if someone goes "No thanks, I'd like to sell you the land back, can I have my money please" they still get the intrest in the long turn and make a profit.
It's like selling magic beans, either way they win..
Re:so.. (Score:2, Funny)
Re:so.. (Score:5, Insightful)
Now, your land could be in a highly marketable area, and be worth MUCH more than normal. Just like real land, location makes it more valuable. Waterfront, Adult areas, private location, no wierd neighbors. Of course, nobody is stopping you from buying your own server for a giant piece of land, setting up a community and leasing it out to people. Its done all the time, private clubs, etc.
I picked up a lot near a major building area, and had water front on 2 sides. Now, when I switched my account to free, I gave the land away to a friend, instead of defaulting it back to Liden.
Liden's cant give away the land, servers cost money, someone has to pay. They just figured out how to make it self sustaining by the customers, and then spin off the technology into other markets. They have developers to pay also.
I'm not seeing the sinister plot here....
Distributed multiplayer online games (Score:2)
P2P.
Of course, to prevent cheating, you have to have multiple nodes "managing" each region, and which region nodes are "managing" they should have no say over (assigned via kademlia, a small assignment server, or whatever; the IP must be the critical factor, however, so that the user cannot sign in and out to try and get new regions). Having multiple nodes managing each region increases the bandwidth involved as well, as the client has to verify that multiple (probably four, so that there's three even if one drops out) separate data streams are consistant, and commands need to stream out to those three nodes (the nodes further need to sync with each other occasionally). If controlling nodes drop below three, the region should be unavailable until a new node comes back on.
There are other complications as well. Machines may have their CPU/bandwidth capability change midway and have to be assigned a smaller region to manage (with other nodes having to take up the slack, but still not getting to choose what they get), etc. "Updates" and new regions would need to propagate on their own, but be signed by a trusted authority. Etc. However, it certainly seems to be a doable concept.
Re:Distributed multiplayer online games (Score:2)
By the way, if you have a technical issue of concern, please raise it. If not, why are you posting?
Re:Distributed multiplayer online games (Score:2)
Re:Distributed multiplayer online games (Score:2)
That's a latency issue, not a bandwidth issue. If you have four servers that you're talking to and need to hear back from two of them before you can confirm the contents, odds are that at least two are near you.
The default settings are 300kbps
That's why I mentioned that bandwidth is a weakness of a p2p system (in some ways, not in others). It depends on what you're doing with the bandwidth at the time. If you're exchanging signed world elements, it's not a limitation, because if it's signed, you only need one copy, and you have multiple servers to get chunks from (ala bittorrent)
multiply that by the number of users you want to support...
No. You multiply by the number of users if you're using a central server; that's the key disadvantage of a central server. For a distributed serving environment, you multiply the average bandwidth load in a region times the maximum number of users in that given region, and if it's too high, you subdivide the region.
no content resides on the user's machine other than a cache, it's all downloaded on-the-fly
And hence the 300kbs bandwidth need
Re:Distributed multiplayer online games (Score:2)
Now if they drop the bandwith down to say 30Kbps then they could have a P2P system but the whole point is they can have a secure system where people can't cheet. So they need to have central servers.
Re:Distributed multiplayer online games (Score:2)
Did you ever, back in the days of modems, play old Doom-style games? I played Duke Nukem on a 33.6 modem a number of times as a server. Latency and bandwidth were non-issues. Why? Because the game didn't try to stream graphics or objects; it streamed actions and state changes. Clients had their own local copies of the entire "region" (a map), and their computers ran it, relying only on the action/state change information from the server. Yes, there was only one authority for each map, whereas here we're talking about 3-4 authorities for a region, each streaming as such. On the other hand, we're not talking about 33.6 modems, either.
the whole point is they can have a secure system where people can't cheet. So they need to have central servers
You apparently either didn't read the description very well, or you're seing some problem that you're not mentioning. Multiple nodes have authority over a region. They all report all actions that occur in the region (and are all informed of actions). If it doesn't sync up, then the bad node is ignored or kicked. And since there is a definitive IP-based heuristic (yes, there are limitations to that, but you can go a long way) to determine who gets what region, a node can't work together with other "cheating" nodes to get majority control of a region. If you see a way for cheating to be possible on this without extensive DoSing and having a huge zombienet of IPs to choose from, please let me know.
Re:Distributed multiplayer online games (Score:2)
Your also going to get into span of controwl isues as each node is going to be limited in size as each of it's PC's need to do all of the same math or the voting system does not work. So node sizes over 4 or 5 is going to start pushing what you can do. Also with a truly distributed system you are going to have probelms with when to create a new node. It's going to be hard to keep 10IP's from faking being a node.
Can this be done well shure but when each programer buys you 20 servers so it stops being worth it to optomise and it's just time to buy some bandwith. In bulk it's down to like 30c a gig.
Re:Distributed multiplayer online games (Score:2)
log on and off
Please back up to where I described why simply logging on and off doesn't work. You use a hash function based on the IP address to determine what regions one is in control of; the order of the IP hash compared to others determines what regions you get (you're given a block; your neighbors slowly slide regions to let you in until it roughly equalizes); it is not randomly assigned. Whether you use a small "authority" server (no content streaming, just authorization and assignment) or a kademlia network, the only way to change your assignements is to change your IP. While the ability to change one's IP isn't too rare, it's often consigned to within a relatively small subnet, unless the person controls an army of zombie PCs.
Picture a stereotypical drawing of an 1-d array of memory. Think of each "slot" as a region. Picture some users in there, each one controlling several regions. All of their control overlaps; the ordering is based on the hash of their IP, with the lowest hash taking the lowest-ID'ed regions. Now, a new client logs on. It immediately takes to controlling a region in-between its two neighboring IP-hashed nodes. Given excessive overlap on one side of their control as compared to others, the neighbor IP-hashed nodes start catching up on the sparser regions, and then take control and cede the overfull regions.
How is authority given to take and cede regions? Again, it depends on whether you use a small authentication/assignment server, or whether you use a kademlia network (the former should be self explanatory, as it knows everything that is going on. In the latter case, each node knows 10 or so nodes in each direction (i.e., its entire neighborhood), as so know exactly what's going on in their little portion of the big world. This sizable list of nearby nodes and what they're controlling allows for fair control taking and ceding, because all should agree on whether the taking is the right course of action or not.
A small central server is easier to implement than a kademlia network, but there's something to say for having *no* server.
each node is going to be limited in size
Yep! But with thousands to hundreds of thousands of nodes, who cares? The basic fact of the matter is that even if you have in a region of your a hundred people at once, all active and submitting commands, and you have to send the commands out to those hundred people. A single command can't take much more than 4-8 bytes if you pack well; combine multiple commands per packet, and should be able to get all 100 commands into a third of a standard ethernet frame. If your system for some reason can't get up, you're forced to drop a region (reassignment to the region, of course, follows the same IP-hash ordering mechanism discussed earlier), and you end up controlling less (and with the sparser control area, the neighbors start to slowly migrate in).
In short, a "command/state" update system tends not to be very bandwidth-limited; even if there is a large confluence in a small region, you can cede other regions or, depending on implementation, even subdivide regions. As for CPU-limitations, well, that depends on how complex of a physics model you use.
It's going to be hard to keep 10 IPs from faking being a node
Nope. With a small central authentication/assignment-only server or a kademlia network, there is an absolute truth value to who is in charge of what nodes at a given time, and who is assigned is based on the hash of their IP.
when each programmer buys you 20 servers
I'm not talking about commercial development. I'm talking about freeware library development, to allow for truly free MMOGs. A "Develop Once, Reuse Many" (DORM?) product, so to speak.
Re:so.. (Score:5, Insightful)
Game players have been trading the rights to pixels on eBay for as long as there have been persistent-state worlds. Sony is in an endless fight to keep EverQuest items off eBay so they can create their own service that does the same thing, while EA pretty much ignores Ultima Online real money trade. Now, Second Life has merely chosen to cut itself in on the action.
This isn't even a new business model. Magic: The Gathering Online does a brisk trade in completely virtual playing cards. There was a game before them called Star Trek ConQuest Online or something like that, which did the same thing and didn't even give you the option to convert a complete virtual set of cards into a complete real set of cards.
And, how's this really different from buying the rights to use a bunch of bits that make a song come out of your computer's speakers?
Re:so.. (Score:2)
Re:so.. (Score:2)
I have no idea of how much CPU and memory running one requires, but considering the game utilizes Havok Physics [havok.com] and most functionality is programmed in the Linden Scripting Language [secondlife.com], it probably takes a respectable amount of each.
The bandwidth use is probably hefty as well, because network updates between X players concentrated in a small area are on the order of X ^ 2. The game animates everything your avatar does -- if you type in chat on your keyboard, your avatar indicates you are typing with an animation and particle effect. If you mouse over something in the game, your avatar turns its head to look where you're pointing. If you click to interact with a game object, your avatar gestures. All those little updates amount to a lot when you have thirty people close together all doing them at once and every action is broadcast to the other 29.
Re:so.. (Score:2)
So you give them money for a piece of paper, and they keep said money and give you this piece of paper, and then they keep your money, and?
Sounds like the stock market to me, I'm glad I'm not the only one who sees it as the "magic beans" it is.
Look son, I've developed it! (Score:4, Insightful)
character who played Woody Allen's father in Love and Death and his
"valuable piece of land".
What's next? Virtual commodities trading?
Yes, I understand it's primarily for entertaihnment value, but somewhere
in Marketing (insert preferred afterlife here), a large group is laughing
themselves silly.
Re:Look son, I've developed it! (Score:5, Informative)
I believe those are called 'Derivatives.'
Botched the link... (Score:2)
From the link:
The fundamental nature of a derivative is that unlike a bond, as in a Treasury bond, or a stock, or even physical stock or commodity (ie: some raw material, product), a derivative has no physicalistic purpose or reason for existence.
In essence, you can make bets on commodities and futures; i.e. virtual commodities trading.
Parent is wrong, why is it modded 'Informative'? (Score:3, Informative)
Simply put, a derivative is as security whose value is derived from that of another, underlying security.
For instance, a stock option is a derivative whose underlier is an option.
In practise, complex derivatives have values that are functions (often very, very difficult or indeed unknowable functions) of various aspects of a range of underliers.
For instance, a credit default swap is a derivative whose underlier is a debt obligation, but its value usually varies only with the creditworthiness of the underlier, not with the other aspects.
Another way of looking at derivatives (depending on what you do with them) is to call them a contract which deals with your rights pertaining to another contract.
For instance, a commodities rollover is a contract that gives you the right to buy and sell two underlying commodity futures contracts. These underliers are themselves derivatives of an actual commodity such as gold. Rollovers are also used in finance (as opposed to commodities trading); in that case, the underliers may well be index-tracking products.
None of this has ANYTHING to do with virtual commodities trading, except that people engaged in virtual commodities trading usually trade futures, which are simple derivatives. They trade futures because it's damn hard to actually take delivery of 1,000,000 tons of orange juice.
Now, how the hell did the parent post get +5 informative?
The parent poster goes on to say a lot of very inaccurate things about derivatives -- for actual information anyone interested should check out a financial website (not Wikipedia!) such as http://www.investorwords.com/ [investorwords.com]
This has been a PSA. Don't do drugs! Stay in school! And FFS don't day trade if you are at the level of the parent poster!
Re:Look son, I've developed it! (Score:3, Insightful)
Virtual eminent domain?
You find that your exclusive townhouse and neighbourhood only 5 minutes from the market has within hours, been moved 5 clicks North to make way for a new plaza, condos and hypermarket.
What's next? Virtual Hurricanes! (Score:2)
Next time, pony up for the insurance!
Re:What's next? Virtual Hurricanes! (Score:2)
Sell your real properties... (Score:3, Funny)
In other news... (Score:3, Funny)
Re:In other news... (Score:2)
So says a person posting in the comments section of a geek-oriented website.
second life? (Score:5, Funny)
no thanks, i still have to get my first one!
Re:second life? (Score:3, Funny)
Sure, until they try to shut down second life.. (Score:3, Interesting)
Isn't that the whole point behind MMORPGs NOT allowing actual ownership in-game? Since if there's a server wipe or something they have no obligations to the players to return all their houses/loot?
Re:Sure, until they try to shut down second life.. (Score:2)
- Make the servers slower and slower until everyone quits playing.
- Have a virtual asteroid wipe everything out (like the one that killed the dinosaurs, only not real).
- Make a horde of virtual lawyers that sue everyone until they own everything.
- Withdraw all the company's cash and flee to some country without extradition treaties with the U.S.
I wonder if any of these were included in their business plan as an exit strategy?
Re:Sure, until they try to shut down second life.. (Score:2)
- Make the servers slower and slower until everyone quits playing.
- Have a virtual asteroid wipe everything out (like the one that killed the dinosaurs, only not real).
- Make a horde of virtual lawyers that sue everyone until they own everything.
- Withdraw all the company's cash and flee to some country without extradition treaties with the U.S.
There's an even more effective way of doing this without the nasty side effects.
No high-level content.
I spent a fair amount of time playing an certain online browser game with a stack of low-level content. To reduce the tedious aspects of the game I spent real-world money to purchase in-game items. I reached the majority of the in-game goals and then discovered that I was sensationally bored of repeatedly clicking the same thing over and over to earn in-game currency and left the game. I looked back and realised I had just spent US$60 on a web game that I had essentially discarded in the end. I then realised that it may have been their business model. Make a fun game with tedious aspects. Allow players to pay to remove tedious aspects. Gradually scale up the tedious aspects until the player quits. Repeat with new players.
Re:Sure, until they try to shut down second life.. (Score:2)
Re:Sure, until they try to shut down second life.. (Score:2)
Re:Sure, until they try to shut down second life.. (Score:5, Insightful)
If the webhost goes under, files bankruptcy, shuts down tomorrow... do you have any legal basis for a lawsuit? Just because they're not hosting you anymore?
Re:Sure, until they try to shut down second life.. (Score:2)
Now when Second Life goes under-- and it probably will at some point, though it could be a year or two decades from now-- your investment in their "land" and "property" is gone. It's not like you can carry it over to Everquest...
Now, I don't know the terms of the Second Life contract (if any) or what backup plans they might have if the project is no longer profitable, but if hey have any sense there's a provision that protects them from damage claims (and I wouldn't blame them if they did.) If it's a success, it will probably be bought out by EA or the like and live on, if not it will fold. The real danger is to the die-hards who still want to play when the game loses popularity... And since they're the ones most likely to have substantial investments, they're the ones most likely to sue.
Re:Sure, until they try to shut down second life.. (Score:2)
On the other hand I don't think someone spending a few bucks to buy a "virtual house" is necessarily a bad thing if it's kept in the realm of entertainment. The price of owning that virtual house and buying the virtual goods (if kept within reason) may even out to the monthly costs of other MMORPGs. Of course the danger (and the genius of the game developers) is that we humans always want better stuff than our neighbors have, even if we have to go into debt to get it.
Re:Sure, until they try to shut down second life.. (Score:2)
Re:Sure, until they try to shut down second life.. (Score:2)
Re:Sure, until they try to shut down second life.. (Score:2)
If the hosting company goes belly up, you get your data and move on to a different provider. If the Second Life server goes belly up, you're basically screwed.
Re:Sure, until they try to shut down second life.. (Score:4, Insightful)
Re:Sure, until they try to shut down second life.. (Score:3, Insightful)
Does Virtual Greenspan Know About This? (Score:4, Funny)
Re:Does Virtual Greenspan Know About This? (Score:2)
Just ask the folks who had their physical realm impacted by the tsumani, or people who've had their villages burned in genocidal cleansing operations around the globe.
Wanna bet their real estate valuations took a hit?
There are events that governments are powerless to prevent, or protect their citizens from.
I see no difference here between the physical and virtual realms. There are certainly differences, but they do not involve economics or security.
Re:Does Virtual Greenspan Know About This? (Score:2)
1. We are discussing an online game.
2. My post is a virtual joke involving virtual laughs.
3. Lighten up, dude!
Re:Does Virtual Greenspan Know About This? (Score:2)
Not that crazy (Score:2, Interesting)
This reminds me a lot of website property.
A company -- say, Amazon.com -- owns the title to a website. They have rights to the property at http://www.amazon.com/ [amazon.com] . But the actual bits on the server don't have to reside on computers owned by Amazon; they could hire a hosting company to do that.
That's what's going on with Second Life. The video game is hosting the "site", and they're licensing rights to areas of the "site" to individual people.
Come to think of it, it also reminds me of an IPO. But instead of selling ownership, Second Life is selling rights to its product. I don't see anything wrong with this whatsoever.
Life's a game, get over it. (Score:3, Interesting)
I don't get it. . . (Score:3, Interesting)
So is it really the intangible property that weirds people out? Or the fact that the general media has no damn clue how online games work?
Re:I don't get it. . . (Score:2)
Thats it exactly. A guy can pay 6 figures for a $5 ball because some rich athlete hit it with a stick and then scrawled his name across it, but I pay $10 a month to fly around in virtual spaceship and I'm the loser.
How does that work?
Re:I don't get it. . . (Score:2)
I'm enjoying having a wander round SL so far, but I really need a better graphics card before I move over to Premium membership and find some land to play with (my old geforce4 isn't really cutting it any more). I'd quite like to try making some custom flat/spin-and-spew theme park rides at some point.
Re:I don't get it. . . (Score:2)
"Prosthetic extensions of the mind" (Score:2)
Re:I don't get it. . . (Score:3, Interesting)
When I pay my bills online, I am paying for a good or service that exists in the real world. While I do not get paid in physical bills, the number which represents how much money I can spend on physical goods increases.
In the bank/credit card case, the number is a representation. In the case of so-called "virtual items" there is no tie-in with the real world. The bit sequence is all that actually exists.
Re:I don't get it. . . (Score:2)
Well, OK, the intrinsic value of banknotes is so low that they have to put special software in laser printers to stop people forging them. So I guess the value is that they are linked to the gold standard. Well, once upon a time anyway...
So maybe its becuase there's only a fixed number in circulation other wise the governments would just print more money to get out of debt and we'd see inflation at work.... which come to think of it...
Let's face it, we've been buying goods based upon abstractions for centuries. Once people got over the basic fright, it all worked ok.
There's no reason why vitual/electronic currencies shoudn't work just as well. They've been mooted about for years. The thing that freaks most people out is that games and gamers are driving the accpetance of these currencies in the real world.
Yet really, that's not as bizarre as it seems. The game currencies are backed by the hard work of some gamers, and by the demand for virtual goods of others.
A number of posters have quite rightly raised a question of trust regarding the game admins, since they can easily duplicate items and sell them to increase their profits. But then there are trust issues with the bank that prints or guarantees your national currency, since they can print more paper with all the infation that entails.
The Second Life bubble may burst - it probably will, but the fact that you can get an exchange rate at all augers well for virtual property in the long term. This is an area I'll be watching with interest.
Re:I don't get it. . . (Score:2)
Bank notes have NO intrinsic value, only extrinsic value (you may be confusing terms). I could care less if I'm trading in gold, silver, or a fiat currency, so long as I can exchange it for something I want. And no, I don't place any faith in US Dollars, since our currency will tank in the next few years due to massive deficit spending, but I digress.
I don't really understand what you're advocating in the rest of your post. My point is that even if all transactions are someday made with virtual/electronic currencies, the currency will get you a good or service that is provided in the real world.
As far as people buying and selling virtual goods/services, I guess they can do what they like. I, for one, won't be taking part because I reserve my money earned in the real world to buy things that exist in the real world.
Re:I don't get it. . . (Score:3, Insightful)
When you buy virtual property you are paying for a real service. The ability for you to use such property (acording to the rules/T&Cs).
While I do not get paid in physical bills, the number which represents how much money I can spend on physical goods increases.
Money is just a representation of a value unit. Real or electronic it only has value because it is rare and is accepted by others in exchange for other goods and services.
Think that money in your bank account really exists? The reserve rate dictates how much actual money the bank must keep. If everybody went to get their money at once, they'd find most of it isn't there.
In the case of so-called "virtual items" there is no tie-in with the real world
The tie-in with the real world is that virtual goods are in demand, considered sufficiently rare, and can be exchanged for money, or other goods and services. Just like money, virtual goods rely on general acceptance and trust.
Re:I don't get it. . . (Score:3, Funny)
Re:I don't get it. . . (Score:3, Interesting)
Same reason you would spend $400 to get a +25 yards driving distance golf club.
You could argue that with the golf club you get a physical item, but in realistic terms the premium price tag is directly linked to playing golf. You would be hard pressed to find somebody willing to pay $400 for what is essentially a finely crafted stick, unless they were a golfer or thought they could turn around and sell it to a golfer.
Re:I don't get it. . . (Score:2)
Paying bills online is still using real money to buy real things. If I don't pay my power bill, my electricity goes off. Lots of bad things happen in the real world when the electicity goes off.
There is nothing wrong with paying a small fee for some intagible entertainment. That's the very nature of going to the theater or listening to a concert. Where people start rightfully ridiculing you is when you spend large amounts of money treating something completely fictitious and completely without tangible value as if it were real.
To answer another poster: paying $10,000 for an autographed baseball IS moronic. Its only redeeming value is that you may someday sell it to some other moron for more real money.
Aside from being able to find someone else dumb enough to pay you money for your fictitious mental image (virtual property), things have value because they are desirable and scarce. Virtual real estate is neither.
Economics 101: money is a medium of exchange. Money works because people know that other people will accept it in return for goods and services. Money represents your level of real power because the more money you have to give, the more things you can make people give you in return.
Credit is borrowing more real world power for immediate use than you have at that moment, with the expectation of returning to the creditor more real world power than it gave you. The more power you have (measured in dollars), the more real things you can get.
It's true that money is a completely artificial economic system, but it's what people will accept in exchange for giving you real things (such as food, clothing, and shelter). If all the people with real property all decided to no longer accept money, then the monetary exchange system would crumble and become no better than buying a mental image on someone's server.
If the time ever comes when people will generally accept a few megs of space on the hard drive of someone's computer in exchange for real houses and cars, then I'll stop ridiculing paying lots of real money for make believe property.
Rich kids. (Score:3, Interesting)
Re:Rich kids. (Score:2)
Most of our guild is working class poor (that appreciates that goals are much easier to attain in virtual life than real life...)
Western vs. Eastern (Score:5, Insightful)
To them, the notion that land "exists" in the virtual world connects to their ideas of self-worth in a very tangible way.
Re:Western vs. Eastern (Score:3, Insightful)
Where you got the idea that these countries are characterized by an inability to fathom land ownership is difficult for me to fathom. Perhaps you are perpetuating absurdly out of date stereotypes about attitudes toward material possessions among adherents to Buddhism, Shintoism, Communism in South-East Asia? If that is the case, please read up. Buddhism is officially suppressed in China, Shinto is on the wane in Japan, both religions have a vast majority of adherents who do not find accumulating material possessions to conflict with their religious beliefs, and the Phillipines is a majority Catholic country! Also -- as I already pointed out, the communist government in China has permitted private transactions such as real estate sales since Deng Xiaping's reforms -- which began 30 years ago.
Finally, your contention that virtual land, through appealing to the self-worth of the peoples you've pigeonholed as not being able to understand land ownership, borders on the absurd. Why would ownership at all contribute to self-worth among people who supposedly can't contemplate it in the first place? Wouldn't feelings of self-worth just be derived from accumulation of material possessions -- which in turn would require virtual land to be worth something?
Your entire line of reasoning smacks of the "Mysteries of the Orient" trope which was (barely) excusable in the 1870's, but is no longer. Spend some time in China, Japan, or the Phillipines, and you will find millions of savvy, throughougly capitalistic and materialistic businesspeople more than willing to buy and trade things worth money. Sure they may extract feelings of worth from accumulating an ass load of land -- but then again so does Donald Trump, and last I looked he lives in the East.
Come on people, we are better than this.
Moiche
Re:Western vs. Eastern (Score:2)
Re:Western vs. Eastern (Score:2)
Had to be said. Bring on the Troll or Flamebait rating, or whatever. This guy is a moron.
Re:Western vs. Eastern (Score:2)
http://www.geocities.com/japanfaq/FAQ-Prices.html [geocities.com]
http://news.bbc.co.uk/1/hi/uk/4075536.stm [bbc.co.uk]
http://www.japanwindow.com/archives/2005/02/ [japanwindow.com]
http://www.atimes.com/atimes/China/GE17Ad01.html [atimes.com]
http://www.asiaweek.com/asiaweek/95/0818/biz1.htm
Products and Services (Score:3, Interesting)
Selling intangible property is more similar to offering to shovel somebody's driveway for cash, than to selling your old stereo. That the item is neither tangible nor permanent makes it no less legitimate. (However, I would never pay real money for RTS property.)
Not that crazy (Score:2, Interesting)
On the other hand it can turn the game into a "only those with more money have fun" type of thing... Well I guess they are trying to make it more like real life.
Re:Not that crazy (Score:2)
The key is that if you don't have money, you can earn it (hey, just like real life!). Make something interesting, like that weird bingo-ish game that showed up on slashdot a while back that's now being produced in the real world. Or just interesting in-game trinkets and convince people in-game to buy them from you.
From Someone Who Actually Plays The Game (Score:5, Informative)
The backbone of this economy is the Linden Dollar (L$). Each subscriber gets a weekly stipend of it as part of the package, plus you can trade real money for L$ on the open market. Players create and consume content in the game. For example, some people spend all of their time creating avatar clothing textures (using Linden-provided texture template) and selling copies of them to other players. The ones that make the best clothes make the most bank. Other people (LOTS of other people) re-invent the slot machine or various casino games over and over again and rake the money gambled with the game's they've created. Some people create new games on their own (like one called Tringo that's very popular these days) and license them. Tringo can be played for free, but it takes a lot of land to host a game and organizations that collectively own huge tracts of land and use them as malls use Tringo and like games to attract shoppers.
In other words, the game is just nothing but the foundation upon which an economy can form. One formed there, and Second Life's creators deserve to be lauded for that.
Re:From Someone Who Actually Plays The Game (Score:2)
It's just like any software purchase (Score:2)
While I personally wouldn't spend money on either product, I can understand how some people would. What we need to do is to make sure they realize that all the rules are set by the company, it is definately *not* like real-world real estate.
Re:It's just like any software purchase (Score:2)
Second Life is different in that it all resides on their servers. If they decide to close up shop, all my in-game stuff goes with them. Even if I exported it somehow, it's of very little use to me out of game, so it might as well be gone.
Really, I think the best way to think of it is as a service. They're providing a service to me, sort of like a hosting provider. They're just hosting 3D primatives and textures and scripts instead of webpages and images. I could make a website that sells images, just like I can sell textures in Second Life. The only difference is that Second Life provides all the tools for creation as part of the service, where my hosting provider doesn't care how I make my content.
Dollar bills are intangible (Score:5, Informative)
As for bubbles, the stability of the worth of something (whether its U.S. $ or LindenDollars) depends on the sustainability of the economy (e.g., the extent that its not a Ponzi scheme) in terms of both the materials being traded and the participants. Even real-world tangible goods have no guarantee of stable value. For example, some would argue that real estate in the U.S. is currently a bubble and that the true value of what seems like a very tangible good has become inflated.
The point is that all economies, both virtual and real, are about intangibles defined by people's relationships to each other and to items of reputed value. A dollar is only worth what someone else will trade for it. A block of land or uber sword of death is only worth what someone else will pay for it. Even tangible objects (e.g., a brick of gold) only has value to the extent that others will trade gold for other desirable goods such as food. Value is in the eye of the beholders, both buyer and seller, and has no other value than that. At best, the values of different items may become fixed relative to each other (but not on any absolute scale) becuase of the ability to transform one item (e.g., labor) into another item (e.g., attained goods in a game or in real life).
Economies and the notion of value are a human invention. As such, the dynamics of societies guarantee that even the most tangible of goods can fluctuate in value.
Dutch Tulip Bulbs (Score:4, Insightful)
What is particularly scary about virtual property in a massive multiplayer is that the good is so completely unlinked to reality that virtually anything could burst the bubble. An executive in the company hosting is accused of embezzlement -- *pow*. The hosting company enters Chapter 11 -- *pow*. A new fad massive multiplayer starts up -- *pow*.
This is why the comparisons against derivatives are misguided. True derivatives are not physical things, but still, an option to buy pork bellies at a certian price in the future will not become worthless without pork bellies themselves becoming worthless. Whereas property on Second Life can become worthless for an infinite set of reasons.
I believe that the idea of objectively valuable virtual property, as explored by Neal Stephenson in Snow Crash (The Street), will someday become a reality. But not until: (1) hosting the massive multiplayer is distributed among organizations that can't go bankrupt; (2)the massive multiplayer is either continuously upgraded or technology independent (perhaps a standard forum that will be interpreted in different ways depending upon the users client; (3) the massive multiplayer somehow guarantees scarcity, at least of more and less desirability property (perhaps by having a hotspot located near the hubs where avatars log on as seen in Snow Crash); (4) accounts are protected by really, really, really good user authentification programs (or else victims of a dictionary attack could lose 20k over night); (5) at least some of the user base is able to access the universe of the massive multiplayer in a thorougly immersive way.
I think it's just a matter of time before these conditions are met, and spending real money on virutal property starts to make sense. But I don't think we are there yet, and those who are looking at virtual property less as a game and more as an investment are playing with tulip bulbs.
Moiche
Re:Dutch Tulip Bulbs (Score:2)
You missed the point that the difference between tangible properties, such as real estate, are life necessities. Whereas, at least for the time being, intangibles are not. So the tangibles are driven by need, whereas intangibles are driven by want. When the economy takes a dive, which do you think gets cut first?
Not that altruistic (Score:3, Interesting)
Also it would be more altruistic if they allowed you to host your own server with your own land that you can control who can visit. That way people who provide their own server get the benefit of not having to pay maintenance fees (they would still pay for the software, developers have to eat I agree, being one myself).
Think of it this way many games i.e. Quake, Counterstrike have worked for years by providing networking functionality and people create their own servers etc.
Granted MMO networks need to be much larger and persistent, though why can't they take the BitTorrent approach. Rather than have one central bank of many powerful servers, all computers running the game could connect together to form an adhoc grid with just as much computing power if not more. This would negate the huge maintenance costs required and hence the need for monthly fees. Which is where I see the sinister part, it's like saying rather than lets look for a better solution, lets look for the most expensive solution.
Re:Not that altruistic (Score:3, Informative)
If you fly through the world at a decent speed, you'll miss a lot, because it hasn't had time to download and appear. Or you'll go somewhere, but you have to just sit and wait for a bit before all the textures download and the place becomes useful.
Second, there's the problem of giving the client too much control. Basically, you can't trust the client at all, because there's lots of people out there with nothing better to do than try and find ways to cheat/break/confuse your game. This is inherent across all online games, and the solution is to do as much server-side as you can.
Hernando De Soto's The Mystery of Capital (Score:2)
I would have been interested to hear more about how they included De Soto's ideas in their game.
From the comments on the review of Mystery of Capital [slashdot.org], I got the impression a lot of Slashdotters totally missed De Soto's point. He doesn't advocate for or against capitalism in the book. He argues for making existing capitalist economies more inclusive. De Soto describes a method for cracking the "bell jar" [economist.com] that insolates the rich and excludes the poor.
What happens when game goes away in a few years? (Score:3, Insightful)
I guess consumerism has reached it's logical conclusion. How long before companies start selling us our own thoughts and emotions? I guess they already have, in indirect forms (entertainment/media). Meanwhile in the real world, millions of people die every year of starvation and disease.
Re:What happens when game goes away in a few years (Score:3, Insightful)
Virtual property is like anything else that can be traded; its value can increase or decrease relative to something else. It has a set of 'what ifs' attached to it like any piece of real property. Its value can be affected by the segment of the economy it's in (for example, the game developer can't just decide to make infinite land as a way of printing money, because if it's infinite it'll be worthless thanks to the laws of supply and demand).
Personally, I'm not interested - but that doesn't mean that I can't see that other people might find value in property within an online game. They can make up their own minds.
Amused to Death (Score:3, Funny)
"Something intangible" ? (Score:2)
You mean like, say, music ? Or software ? Or anything else defined by "intellectual property" laws ?
Case closed??? (Score:2)
I hate when people sum up complex and unresolved issues with flat statements like this. Saying something is worth money and calling "real" are two different things. There's a long legal history of acknowledging that intangibles can have monetary value. It's nothing new, and it's a far cry from a sweeping declaration that virtual property is real. Virtual property is a form of scorekeeping, no more or less real than points in a football game. The main difference is presentation. You could build a football scoreboard that showed each team's score in terms of a furnished house with more or less furniture in it, but that wouldn't make the furniture real. You could even make it legal for players to accept payments outside of the game to score points, like they do in online games. That would make the furniture worth money, but it still wouldn't make it real.
An important point (Score:2, Interesting)
Error (Score:2)
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Re:Its money (Score:4, Interesting)
The monetary system in the country (and all others, as far as I know) is based upon a shared (and mutually agreed-upon) illusion of value.
This is what Stephenson's Baroque Cycle (and Cryptonomicon, for that matter) was talking about. This isn't a virtualization of money, this IS money. These people are creating money, printing their own currency in the most elemental way possible, they're thinking it up.
It's interesting for that reason alone, aside from what people are actually doing with the service.
m-
Re:My pencil (Score:2)
Ok, I got it! (Score:2)