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Jun 29, 2007

Comments

1.

While I think that the SL Exchanges should be a means to help raise capital, I do not see that as the primary goals of the current exchanges. As Robert pointed out, the fact that the listed companies own close to 90% of the businesses offers little value to the investors. What I see these exchanges doing is a providing a means to create artificial value for the owners.

For example, Company A wants to go 'public' and issues 1mil shares in IPO at 1 Linden per share, while having 10mil shares outstanding. Odds are, the IPO will be successful because of most investors' lack of due diligence in examining the IPO. They simply want to put down a small risk to see if it will pay off, and possibly just have some fun trying their hands in the stock market. If the IPO is successful, this company can now claim they have a market value of 10mil Lindens. But what is there to support this value?

Now, assuming that the business does have a sound model and someone is interested in buying them out. Does Company A really expect that the person to pay the current market price where the value was artificially created overnight? Let's not forget to add in the fact that there is very little liquidity in these markets, so the owner of Company A can simply go out to the market and buy more shares himself to further inflate the value. So where does it stop?

While the idea of an exchange can be noble, one must first examine how the exchange operates and ask, what is the intent of the exchange? Who are they looking after, the companies or the investors? Are their policies set to help incubate developing businesses that have favorable value propositions, or are they merely colluding with businesses to make money for the owners?

I would like to end this comment with one suggestion to the exchanges: Your customers are the investors, not the companies.

2.

At AVIX, it is a game within a game world. We cannot guarantee a gain or loss. We do, however, have a focus on trying to make it so that those we help raise game capital have the responsibility to generate a return to their clients. We do encourage accounting. But it's accounting about game assets, not a fungible asset. You cannot take a piece of property.. or an object from SL and convert it into raw cash directly or trade it with a broker.

If securities laws are re-written to govern SL and the Linden is recognized as a security, then it runs the risk that such laws would be applied to games like Monopoly. You pay for monopoly money when you buy the game from Hasbro. You pay for linden when you buy a subscription from SL or you purchase it from other players through an exchange. Linden is a product, just like monopoly money. It is not backed by any real world government. It has no intrinsic value. If second life crashes tomorrow, none of us have a claim for anything really.

The SL community needs to regulate itself. We need to stop the frauds. We need to stop the corrupt exchanges. Bodies like the SLEC and inter-exchange co-operation are the building blocks to make the stock market games a creative engine within second life, causing good ideas to be implemented within the games. Some projects will come to fruition of the virtual capital markets that would not have upon their own. A good example of this is from Ford Edleman's Company.. symbol FED on the WSE. A product has been developed there as a result of the capitol raised for the company, and Ford seems a man willing to return the faith based investment's value to his shareholders. The product's name is called "Double Trouble" and it's given myself and my real life mate a lot of hours of addictive fun. Ford may end up SL's equivalent of Milton Bradley.

In summary, yes, there is a place in SL for virtual capital markets.. and a reason to buy into the companies which pose a real value to the community and its investors. No, there should be no rl regulation of the industry because it would not be appropriate. Yes, the community needs to find a way to improve accounting standards and help defeat the true frauds which are out to do little more than take investor's money. That is the embodiment of the goals of AVIX. Our methods will never be full proof, even in reality the occasional fraud still manages to dent the screens of the securities markets (ENRON). Risk is high here, but if you find a moral CEO with true goals in SL.. it can be well worth the investment. And the old addage holds true, never invest what you cannot afford to invest.. especially in a developing virtual game market.

Investors in the game are empowered compared to reality. You can talk to your CEO, you can investigate the operations of the listed companies. Do your research. Know your SL game markets. There is a good second life income to be made from intelligently placed investments. In running DGD, I do my best to do just what I've stated above. If any of you have questions in game, please, feel free to contact me.

Maelstrom Baphomet
CEO DGD
COO AVIX

3.

Additionally, I wanted to note AVIX encourages a 51%/49% split between CEO and shareholders at IPO. This is because there's no real way to take over companies due to the nature of ownership in SL. Atop this, being able to keep half the profits and share the rest is a means of motivating CEOs who often bring ideas that could implemented on a smaller scale and developed over time as a proprietorship operation to the market for more rapid implementation. Remember, in SL most of the time a company's work is often based on the productivity of one person. It'd be a bit absurd to expect that person to give up most of their compensation to shareholders when the project is purely on their backs alone. Thus the 51% is incentive to the CEO to be productive and the 49% ownership that should come with dividends of the profit are a motivation for SL investors to contribute to the concept.

4.

Maelstrom Baphomet: If securities laws are re-written to govern SL and the Linden is recognized as a security, then it runs the risk that such laws would be applied to games like Monopoly. You pay for monopoly money when you buy the game from Hasbro. You pay for linden when you buy a subscription from SL or you purchase it from other players through an exchange. Linden is a product, just like monopoly money. It is not backed by any real world government. It has no intrinsic value. If second life crashes tomorrow, none of us have a claim for anything really.

It's hard to buy the idea that just because these securities are not back by RL government, they are not reliably backed by Linden Lab's and the SL user community. In practice, the SL economy and securities market has proven relatively stable. True if the servers were all to crash and the code was lost, there might be limited means to recup any losses suffered. But in its fourth year of existence, what is the probability of this happening? Ten years later UO is going strong. I see the circle of WOW value extending further...It seems the SL=game argument is an attempt to fend off uninformed regulation and policy. PErhaps a good thing, but it might be nice to have informed policy rather than deception. And this whole monopoly analogy is growing old and seems like it does not apply very well to virtual worlds. All around, but particularly in regards to SL and traditional MMOs, the sheer time investement invalidates the idea that VW=monopoly online. I think the best way to think about this is the very idea of play. Are these worlds "games" any more? What has happened to play? When the game of monopoly is over, it is put in the box and forgotten about. Virtual world fever is growing. I would argue that people have come to care so much about vw economies and whatnot precisely because they are serious...In terms of SL, I would conjecture that although games are played in SL, the platform is inherently not a game, especially the securities in question.

5.

Doing business in SL is a coy dance with regulations, and an experiment with voluntary association and social contracts. But at best, it's like doing business in an emerging economy where the rule of law is largely a cultural consensus rather than a reliable force. It depends (where it can) on networks of trust, ultimately. SL continues to unfold as the libertarian utopian experiment.

I'm sure the community here is familiar with the disappearance of the EIB Bank in Eve Online last year. I really can't yet see why those things can't and won't happen in SL.

I'm conducting something of a personal investigation, as an SL businesswoman, blogger, and paid journalist, on the history and prospects of SL markets.

I go into the process skeptically about the current market, but upbeat (if this makes any sense) about its possible futures, should SL as a whole manage to survive the likely upcoming challenges.

But your questions nearly beg the question of a single accepted social contract around business affairs, such as we trust that we have (realistically or not) in the real world.

It's not clear to me what percentage of in-world businesses have a serious profit or business purpose to their activities, regardless. Many of the business folks in SL "think in Lindens" -- even me, sometimes, if I like someone and I have time.

For example, I have a video gig that pays US$100 per 2-3 minute news segment. And I've applied for another journalism gig that pays L$200 (about one US$) for an article for which they expect several hours of work -- but I take that in the same light I'd do an article for a chamber of commerce newsletter. It's cheaper to get paid a dollar than to pay for an ad.

But there are plenty of people who will work for a few L$ an hour. My partner, a stage magician in RL and SL, makes a minimum of L$10K (US$40) per gig, and only does gigs when he can't get higher pay in RL -- but he's spent two years in world to make that reputation. Many people won't hire him because they don't compare a real life living to a Second Life living.

So I think the answers to your questions are multivalanced. Yes, there is a fear of inviting outside regulation or criminal/fraud accusation. But at the same time, this is a role playing game to many of the businesses. Stories like the humorous">http://www.theonion.com/content/news_briefs/second_life_makes_dream_of">humorous piece in The Onion ring true.

Someday it will all sort out. For the moment, many questions in SL have as many answers as there are subcultures in which they can be re-cast.

You need to ask: in-world businesses that support regular and sustaining RL incomes; in-world businesses who hope to cash out big at a later date; in-world businesses that act as a way of monetizing an amateur/hobby interest; businesses coming in from RL; businesses working to serve businesses coming in from RL.

Cross correlate that with the people who are honest or not, competent or not, working to legitimize SL or not, long term thinkers or gold rush (think dotcom bubble) thinkers, and there are a lot of viewpoints and outcomes to track! :)

Shava Nerad
Shava Suntzu in SL
http://slbizreview.com/

6.

The entire notion of financial equity as defined as a "residual claimant" is categorically false so long as the interpretation of financial claims and property rights stand as they currently do today. Right now you are *not* a residual claimant to anything because you have no financial claims at all, not even to your L$. Therefore it is categorically a game.

The SEC has zero interest in Second Life because it is (a) not material in economic terms on their scale of interest and , (b) probably doesn't meet the test of their jurisdictional powers. The IRS and/or DOJ however, may have interest in SL for very different reasons.

The Monopoly analogies trouble me because Monopoly Money, as it were, is not ever used for the exchange of real goods, services, or translation into sovereign legal tender.

In my opinion the SL "stock" markets are interesting from a sort of experimental, psychological, and academic point of view. But they offer little in terms of providing any transferable experience to real equity or other financial markets beyond some obvious software technique. I know Jamie from OGM translated his experience into a real-world FX exchange software career. But the business, management and process aspects of SL markets are a drop in the ocean of complexities that govern real capital markets.

7.

The only economy you have in SL : you transfer cash into LL's bank account , then you enter the game and play.During the play , you may buy a cola from other players or / and from LL.Also you may earn monopoly coins in game, and/or you may buy them from LL/other players, paying real cash. To keep playing, you pay fees to LL.Real cash or the monopoly coins you earned in game.
The monopoly coins in game can be traded back into real cash . That's the only economy you have, no matter how you mistify yourself or try to mistify the others .
Look at the " covered online gambling sites ".
The only economy is the one happening between players and players/ LL. Anything else happening in SL between avatars is just the sand-box/ black-box.
As the covered online gambling sites are places for unregulated gambling, SL is a place for unregulated scams.

8.

In general I'm sceptical about drawing to direct comparisons with markets in game worlds with real world ones. It is a personal opinion, but anecdotally, I believe players behave differently - different set of motivations. Yes, there are analogies, but direct comparisons, I think need some normalizing, so to speak.

Endie and I bantered a bit on his site about a particular set of instances in Eve-Online - arguably one of the most "market driven" gamey virtual worlds (bit different than 2nd Life).

http://endie.net/cs/blogs/endie/archive/2007/06/28/CCP_Appoint_a_Lead_Economist.aspx

9.

@Amarilla: What you're saying is just patently untrue. Is Linden Lab's economy relatively isolated and frontier-like? Yes. Is the (not very large) group of people making money from it doing so off the arrival of large numbers of new (and often short-lived) users onto the scene? Probably. Does that mean that it makes sense to talk about it in terms of the too neat divide you romantically postulate between in-world (in-game) and out of world? No. There are examples, however few, of creations in Second Life which generate economic effects beyond Second Life (such as Tringo). The fact that this is not only possible, but has happened, means that we cannot retreat to a simple in-game/out-of-game distinction. None of this is to say that Second Life doesn't have a very very long way to go before its economy can be considered robust and definitely sustainable, but it just doesn't make sense to try to make sense of it as if it were (only) an arcade full of machines operated by tokens purchased from the pimply teen behind the counter.

10.

Its easy to be rich in Second Life. I have friends who own yachts, mansions, waterfront properties and many other luxury goods in SL who certainly don’t have those in the everyday world. Owning shares in a business would come under the same category to them. A chance to play on the Stock Market at a cost that is, in real dollars, not substantial. In that sense, most SL stock transactions are likely to be “fictional”, another marker of a “rich” lifestyle.

I think most players in SL see currency in in-world terms. How much do I have, and what can I get for it? Its like traveling in a third world country, where I would bargain for a melon that in my own currency costs a trivial amount. If you convert a certain amount, then think in local currency, the outside exchange rate becomes pretty irrelevant. In that mind set, investments in an SL stock exchange take on a life of their own. It may be a “fictional” investment, but not insignificant one.

Despite the hype from Linden Labs, only the ultra rich in local currency terms have enough to make it worth cashing out in US $. Looking at the stats on how much real dollars people are making in SL, the proportion of people with significant US$ income is comparable to the proportion of multi-millionaires in the everyday world. Most players, even “business people”, aren’t in that league.

11.

Ok Thomas, my mistake then : except for the fun ( wich is not the subject of this thread ), SL is a place for unregulated economic activities.


12.

@M. Baphomet: "If securities laws are re-written to govern SL and the Linden is recognized as a security, then it runs the risk that such laws would be applied to games like Monopoly."

I'm so tired of this argument...

From someone who is running either, (a) an actual financial service, or; (b) a game version thereof... that statement is worrying. More, if the former, but still...

There has never been a statement from Hasbro that you can make money playing Monopoly. The rules and pieces, pictures and text of Monopoly are IP owned and strongly protected by Hasbro. Though we have many versions of the game, players are not enabled by Hasbro to add/change/delete anything in the game and still call it "Monopoly." The "things" you buy in Monopoly only have value as tokens within the strict rules of the game; you cannot say, "Hotels, to me, are only worth two houses, because I don't like hotels as much as the average player." In SL, the value of many objects/services is extremely relative to various players; you may love your new prim hair and value it at more than the $LD500 you paid. I might not wear that hair if you paid me.

And, most importantly, you cannot exchange Monopoly money for real money at any time, unless you sell it as part of the whole game. At which point you are not exchanging money, but simply selling the game.

The economic questions posed by SL and other virtual spaces are very interesting and probably complex. Making simplistic comparisons to other kinds of game-tokens is unhelpful. You might as well say that Linden dollars are the same as sand dollars, because we call them that, or as Jello Pudding packs, because kids trade them in school lunches.

13.

(Disclaimer: I am not a lawer; this is not to be taken as legal advice.)

The EU Electonic Money Directive has a definition that probably excludes Monopoly money and possibly includes the Linden:



‘electronic money’ shall mean monetary value as represented
by a claim on the issuer which is:

(i) stored on an electronic device;

(ii) issued on receipt of funds of an amount not less in value than the monetary value issued;

(iii) accepted as means of payment by undertakings other than the issuer.

Of course, Linden Labs are based in the U.S, and U.S. banking regulations are diferent from the EU.


14.

@Andy Havens: "I'm so tired of this argument...
From someone who is running either, (a) an actual financial service, or; (b) a game version thereof... that statement is worrying. More, if the former, but still."

It is both. It's an in game financial service and therefore an integrated part of the game. It could also be used as an educational utility for micro-cap markets. We do not provide the service to translate linden into currency. That is LL. We only convert Linden to Linden. If we did venture into the area of currency exchange, that would be a new step of evolution we would have to monitor very closely. Most of that research is done by Investor Allen, our CEO.

As for the monopoly argument. You're right, Hasbro doesn't offer an exchange. That is why we closely monitor our CEOs. The game is a game but AVIX would be out of business if we didn't provide for a relatively fair playing field. I do my best to interview the persons listing on our exchange and make sure they have a plan to make returns to our investors in time and that they have a semi-legitimate in game business plan. But it's essentially a business operating within the context of a game. Virtual game companies can be productive inside the game because in SL.. these companies help to build the world and improve it. In other words, they add content. That's what makes SL so interesting, the capability to create within the creation. What distinguishes SL from its competitors is the level of customization and creativity that can occur. These companies encourage that, and can turn a profit.

The Equity market is no different than the SL Land market. Groups can be formed.. trusts broken and made between residents. The only difference is that LL has far less protection and systems in place to govern the SL investment market. We would welcome these actually. The more reliable, trustworthy, and developed the market can become, the better for the exchanges and the SL economy as a whole. Until then, invest in the game with who you trust and scrutinize the CEO's and what they're producing to create a profit.

That said, happy 4th of July America. See you in game.

15.

Susan raises an interesting point--I don't see offhand why Lindens wouldn't be electronic money. But Susan stops quoting too soon. Immediately after the quoted section, the Directive reads:

5. The business activities of electronic money institutions other than the issuing of electronic money shall be restricted to:
(a) the provision of closely related financial and non-financial services such as the administering of electronic money by the performance of operational and other ancillary functions related to its issuance, and the issuing and administering of other means of payment but excluding the granting of any form of credit; and (b) the storing of data on the electronic device on behalf of other undertakings or public institutions.... Electronic money institutions shall not have any holdings in other undertakings except where these undertakings perform operational or other ancillary functions related to electronic money issued or distributed by the institution concerned.


Whatever does that mean for Linden Labs, or any other virtual worlds? No scripting support? Robin Linden has to stop holding office hours to discuss "community"?

Of course, this takes us rather off-topic....or does it? If Lindens are electronic money, then the WSE and AVIX are supporting contracts that allocate capital, making the real exchanges.

However, I would argue that Lindens are more like electronic money than WSE/AVIX securities are like "stock." After all, unless there is a clear legal boundary between management and the business entity (say, a corporation or limited partnership), I don't quite understand what it is that stockholders actually own. Just an IOU?

16.

@Malestrom: I really like SL. I think it's fun and interesting and that lots of cool things are going on there. The part that worries me most about its future, however, is exactly the kind of fuzzy talk that surrounds money "in game."

Let's take an alternate-reality scenario for a sec. If the Lindens had provided $LD as only an in-game method of exchange, and then had said:

1. We (Linden) will only sell things to players using RL money ($US, let's say). If you want to buy virtual land, islands, packages of content, or whatever... you pay us in real money.

2. The in-game currency/points are for use in-game only, as far as Linden is concerned. Create a house, sell it to someone for in-game money, or trade it for another in-game resource, and that's it.

3. All transactions of $LD-to-$US (essentially RMT) should be handled outside of the game, by a third party, or player-to-player.

4. We, Linden, will sell chunks of $LD to players so that they can buy scripts, content, prims, textures, etc... but we will NEVER buy that $LD back. If you want someone to buy your $LD, you must do that on your own.

If they had done that, there would be an argument that $LD is only game money. Sure, players can exchange it for $US, but I can do that with baseball cards, Pez dispensers and my own consulting services.

But when Linden says that it will both sell and buy in-game currency, the game contains a central kernel of exchange that is inherently (imho) real-life-y. We make allusions to clubs or gambling or whatever. I'm not sure those are accurate, but they may be meaningful as metaphors.

If you charge me for tokens to play games in an arcade, it's games. If I have some left over and sell them to a friend, the arcade-to-player relationship is still game-y. People are just selling stuff. NBD. But if you guarantee that you'll buy tokens back from me, and you move the costs of the games in the arcade up-and-down over the course of a reasonable playing period... I might be tempted to buy tokens when they're cheap (high token-to-play ratio), and then sell them for less than you do when prices rise.

I don't think there's anything inherently *wrong* with what Linden is doing. It just makes things more complicated. And my fear is that some government's money/tax/gambling angles will trip up SL. Because as much as governments may whine about porn and S&M and age-play... we know what makes the world go around, eh?

17.

Andy is absolutely right, in my opinion. Beyond that, there seems to be an assumption here that games and real life (or simply real stakes) are mutually exclusive. While it's a habit of thinking familiar in western societies, it's demonstrably not true. Just because something is a game does not, in any inherent way, keep it from being a site for the accumulation of capital and the exchange of real value; i.e., a site for lasting economic consequences and opportunities. (Gambling is a simple counter-example, but there are many others.)

It's a comfortable fiction to believe that a game must be somehow set apart from real life, but it's not a given. To the (imperfect) extent that some games might be so separate, it's only because everyone participating agrees to try to accomplish that. If everyone starts to expect and act as if real stakes are circulating (i.e., not just in one direction, as Andy described), and the mechanisms are there that make that possible, then voilâ: you have an economy that cannot be usefully understood as fundamentally separate from other economies...and it can still be a game -- although, in my opinion, it's not useful to call SL a game. SL is, however, very game-like, and we really shouldn't be surprised; games are much more like our everyday experience than we tend to acknowledge.

18.

"And, most importantly, you cannot exchange Monopoly money for real money at any time, unless you sell it as part of the whole game. At which point you are not exchanging money, but simply selling the game."

Guess what : i exchange Monopoly money for real money since 10 years ago. In what state do you live ? Denial ? I'm selling and buying Monopoly money on a daily basis , and the same does all my game friends. The game is called Monopoly and we buy/sell it's currency . And we are almost 28 players doing this.

19.

Many good points there, i'd like to reply to the following:
"As Robert pointed out, the fact that the listed companies own close to 90% of the businesses offers little value to the investors. "
That is infact the choice of the investor, Robert could say similar about RL's most successful global companies, let's use Vodaphone as example: 75% of the shares are owned by insiders only 25% are publicly traded not a very attractive investment in my opinion but a very profitable company. As for regulation in general, i'd like to point out that in most cases througout history regulations does not serve the average investor, for most the reality is oposite of their purpose. Personaly as a very active investor at SL's inworld exchanges i'd rather see a unregulated free platform that matures by laws of natural attraction, than a lobby-driven regulation that serves the very richest and the most corrupted of the investors. We all know, nomatter how well the regulation may be managed people still have a price, and money attracts corruption without limits.

20.

Boy, am I glad I pulled money out of AVIX. That quote from Maelstrom is one reason why I don't trust exchanges:

"At AVIX, it is a game within a game world."

Glad I picked up my toys and went home.

21.

I am writing this from the perspective of my avatar in-world (that is, within Second Life), Harley Mosuke. I feel that Maelstrom seems to be a sound businessperson, but I've been watching AVIX for about a month now, and it seems that the companies being listed on the exchange are merely doing so in order to raise alot of capital real quick for themselves and then to cash out. Many investors are being left $Linden-less as a result, while the "insiders" are getting rich. This is what *appears* to be the case.

Do I suspect foulplay? I'm not saying (yet). I will say this, however: I have a small amount invested in the AVIX exchange, but I'm reluctant to invest more due to the results I'm seeing. I realize that it might be overly optimistic to expects financial returns so soon, but it alarms me that so many of the stocks are being immediately bought out, their stock prices have fallen dramatically so soon after their being listed on the exchange. Companies are being bought out within days, as in the case of SL Reports -- and after a brief session in which details are offered to investors, no further word is to be heard from the company's owners.

22.

Cash out? As far as Investor Allen has informed me, CEO shares are locked for trading. The only way that a CEO would be allowed to trade their own companies shares is if they set the limits of such trade in their prospectus. I know I've not cashed out, I run one of those companies, DGD. I have been buying back shares into my personal name using my salary from AVIX. It's a pity people will come onto message boards and claim things without having any access to the #s. The reason SL reports sold so quickly was a media blitz by its ceo to his own clients. If you'll note, it's a media company. If you do a search on groups for second life reports you will note their group sizes are fairly sizable.

That said, please don't slander if you don't know. I'd suggest you even read my group announcements and prospectus for DGD to get an idea for what my company does. I cannot guarantee the other behaviour of other CEOs, but for me, protecting and growing the wealth of myself and my shareholders is priority.

As for the post ipo price crash, that's not from ceos cashing out, that's usually from people who helped bring the company out of ipo and to the floor slowly diminishing their positions to reduce risk and diversify. Plus, if you were to cross reference current prices against IPO prices... there may be 1 or 2 companies of the 11 that are trading at below pre-ipo values. That's going to happen in normal trading with changes in investor confidence and economic climate.

I welcome you to do your own research and then present your findings/data. Contact me in game if you have concerns also, that's what I'm there for.

Thank you,
Maelstrom Vortex
COO AVIX,
In-world Client Care Division

23.

By the way, Maelstrom Vortex is my MSN name :-P. Thus the error in sig.

24.

I'm not trying to *slander* anyone here, so there's no need to get defensive. If I had wished to slander, I would have done so, trust me on this. (Not that I have anything truly bad to say about your operation.) I'm simply stating my perspective, and when it comes to *my money* being traded on *your exchange*, I should have every right to do so.

AVIX is a young operation, relatively, and I've found it an interesting place to begin my investment portfolio. That said, it concerns me that my portfolio has tanked so dramatically, particularly my investment in AVIX itself (and its alter-ego AIC, which has dropped to .84 from a high of 1.96 less than 30 days ago). Thankfully I don't have *too* many $Ls invested! As for your request for data, anyone can simply view the short price histories to confirm either your or my conclusions.

25.

I think some folks reading this may find this interesting. This is a recent snapshot of one day of trading of SLMS, one company listed on AVIX:

DATE/TIME: 2007-06-25 05:55:55

HIGH: 300.00
LOW: 1.36
CLOSE: 1.96
VOLUME: 20034

Can someone explain how the price can jump to 300 (from an open of 1.65, by the way) and then close at 1.96? Now tell me whether or not this exchange is gamed.

26.

@ Harley :

FICTIONAL Securities, tells you anything ? Your $L may be real - exactely same real as the cash/work time you've paid for your $L- but anything else it's FICTIONAL . Catll the virtual Police, you just've been scammed :) Have fun .

27.

Thank goodness it's not RL Wall Street; then I'd be out some real $$$!

28.

Indeed :) I hope you had the fun you've paid for :)

29.

Well, thus far it hasn't been more than a couple thousand Lindens, much of it campchair money.

So what's this about exchanging Monopoly money? For real? Is this done online?

30.

You mean the Monopoly i play ? If yes, then : ofcourse, we are a group of Monopoly players and we sell/buy the in-game currency , between us, for real cash. But we're living in the same town, so we don't need any " mediator ". And anyway we wouldn't trust but only one of ourselves with our in-game currency / cash . I can tell you why : because if you don't have the Govt, or a real person taking responsability and accountability face to face , one must be real dumb to trust it's values / ID to a stranger , based on ....EULA.

31.

So you're saying that a jump from 1.65 to 300 intraday never happens in RL (dis)-regulated exchanges... hmm let's see, roll back your clock to year 2000 and check history records of tech stocks... you'd see 2000% jumps intraday, at some days the oposite direction, just like tech stocks were much priced by "future-potential" and nobody knew the future, so are these virtualmarkets. Also the argument of wether L$ is fictional or not is just as ridiculous as questioning wether USD managed by foreign institution (The FED) is fictional or not, actualy L$ is for many reasons a far more stable currency and much more transparrent than USD, for example last year the FED decided to remove M3 from releasing it's data to public, for those of you who don't know what the hell M3 is it's the value that basicly allows ppl to know the future of inflation in other words without M3 the FED can be printing 1 trillion new bills monthly and nobody will know about it. While with L$ linden lab does fully transparent reports on how much money is at market, something that allows investors to actualy know what the hell they're dealing with. When it comes to the different exchanges, WSE is the oldest one and seems most stable atm, AVIX is experiencing "correction" from it's jumpstart, while Intl-exchange is still experiencing "jumpstart". I would recomend people to diversify your investments, avix and intlexchange has a higher risk of "going-down-under" because of their age and experience.

So what i'm saying is, every market is fictional and there is no such thing as real market and everything is fictioal incl RL world currencies, and thats perfectly right.

The potential growth of these fictional virtual markets are by far larger than the potential growth of rl markets, but that potential growth brings with it high risk.

The main advantage of investing in virtual worlds is that you can actualy fully investigate the business structure completely, something that is impossible to do with rl global companies (excpept if you plan to fly around earth and do inside spying :). Other advantage is that these virtual markets are not ruled under any of the RL totalitarian governemnt systems (either it's a govt with one dictator or a semi-democratic state wich offers 2 party system with a lobby of special interrests behind, the system is still totalitarian), nor are they a victim of so called "regulatory-commissions" wich can and are most often corrupt from top to bottom. Actualy a completely free market community has far less risk of fraud (like enron) than any of the systems rl provides us with (eu,fdic, etc...), the reason: money corrupts people and at the end of the day the question becomes who runs fdic controls the blackmoney.

NOTE: I'm not saying virtual markets are 100% safe, i'm just saying there is an advantage and taht is you dont have to deal with the risk of corrupt brokers or corruct regulatory institutions, that's what makes this kind of investment safer.

32.

"Also the argument of wether L$ is fictional or not is just as ridiculous as questioning wether USD managed by foreign institution (The FED) is fictional or not, actualy L$ is for many reasons a far more stable currency and much more transparrent than USD..."

Ok, the $L are real money.

".. with L$ linden lab does fully transparent reports on how much money is at market, something that allows investors to actualy know what the hell they're dealing with."

Indeed all of us we have access to LL's database.

"So what i'm saying is, every market is fictional and there is no such thing as real market and everything is fictioal incl RL world currencies, and thats perfectly right."

Make your mind : everything it's fictional or everything is real ? And really EVERYTHING is a way or the other ?

"The main advantage of investing in virtual worlds is that you can actualy fully investigate the business structure completely.."

Yes i could , but i'm too dumb to see how could i.

" Other advantage is that these virtual markets are not ruled under any of the RL totalitarian governemnt systems..."

You are right again : LL is Mother Theresa's legacy and it works under Utopia 's total democracy.

" Actualy a completely free market community has far less risk of fraud (like enron) than any of the systems rl provides us with (eu,fdic, etc...), the reason: money corrupts people and at the end of the day the question becomes who runs fdic controls the blackmoney."

Ofcourse , and money doesn't corrupt you . And even if they does, you could setup a Fictional Virtual Insurrance Company in SL.

"NOTE: I'm not saying virtual markets are 100% safe..."

Ofcourse you don't : it's about 123 % safe, actually.

33.

Amarilla, please explain what you tried to say, becasue based on what you said you attemted to do something based on things taken out of context. So heres what you said:...

Ok, the $L are real money. Indeed all of us we have access to LL's database. Make your mind : everything it's fictional or everything is real ? And really EVERYTHING is a way or the other ? Yes i could , but i'm too dumb to see how could i. You are right again : LL is Mother Theresa's legacy and it works under Utopia 's total democracy. Ofcourse , and money doesn't corrupt you . And even if they does, you could setup a Fictional Virtual Insurrance Company in SL. Ofcourse you don't : it's about 123 % safe, actually.

thats all what you said, without even ONE conclusion from your side, i presented my side if you disagree (as it looks like) please tell us about it. Or maybe you just dont have any conclusion to the argument of Real World markets vs Virtual world markets, wich is it ?

34.

Amarilla, please explain what you tried to say, becasue based on what you said you attemted to do something based on things taken out of context. So heres what you said:...

Ok, the $L are real money. Indeed all of us we have access to LL's database. Make your mind : everything it's fictional or everything is real ? And really EVERYTHING is a way or the other ? Yes i could , but i'm too dumb to see how could i. You are right again : LL is Mother Theresa's legacy and it works under Utopia 's total democracy. Ofcourse , and money doesn't corrupt you . And even if they does, you could setup a Fictional Virtual Insurrance Company in SL. Ofcourse you don't : it's about 123 % safe, actually.

thats all what you said, without even ONE conclusion from your side, i presented my side if you disagree (as it looks like) please tell us about it. Or maybe you just dont have any conclusion to the argument of Real World markets vs Virtual world markets, wich is it ?

35.

ROFL ! I don't post conclusions, i'm much too dumb for that :-)

36.

Amarila, ok here's a quote that's worth reading before posting, said by Plato "Wise people say something when they have something to say, fools when they have to say something." and please dont reply to this, hehe ;)

37.

claiming that SL is a game and that the L$ is a game currency is meaningless because there is a clearly defined exchange mechanism and an expectation on the part of the consumer / average investor that L$ is convertible to US$.

It doesn't matter whether you are taking a coal plant public or a virtual goods company, selling a security to the public is still selling a security to the public and in the US that's regulated both at a state and federal level.

Having been through NASD certification and the Series 7, I wouldn't touch this stuff with a ten foot pole. Securities regulation tends to hit when enough small-time investors get burned. Once one of these investment schemes goes south with enough publicity, it will be interesting to watch the fallout. In such a circumstance, I don't think the judge is going to have much sympathy for the "it's just a game" defense.

38.

Arbitrage Wise's comment is a load of crap, he is only trying to discredit the AVIX and WSE so he can dive in and open up his own exchange. Remember his slander of Investor Allen? He proved that Sal Ackland was Van Ames, but with no proof whatsoever then accused Allen of being Ackland. In RL Wise would have been found guilty of defamation and slander, now he is doing the same here.

Not all RL companies list on exchanges to raise capital. Most companies are established companies that go from being private to public/listing to get their pay off for a job well done, and this is also happening in SL too. It is a completely legitimate and ethical business practice. As far as valuations of companies, valuations are performed by the market, not the company themselves. Any item in RL or SL is only worth what someone else is willing to pay for it, not what the magic number on the ticker boards says. That is the "Last Sale" sir, not a thorough valuation, and only a fool would look at a ticker board to determine a valuation, before taking that company over. Perhaps this would explain the exhorbatant price you paid for your latest acquisition.

It sickens me that a man of little intelligence, honor and business acumen has $L70 million of SL residents money in his custody. Please Sir stop slandering everyone and everything for personal gain. Look after your own nest and we will look after ours.

39.

Yes, they try to say it is a "game" to try and avoid the SCC from coming in and shutting them down. The problem is, there are "real world" companies raising real world funds on these exchanges. I give them a year before they are all shut down and the owners are thrown in the slammer.

40.

Oh, and Arb Wise is a total scammer. Everyone knows it. Just look at his "bank's" web site. "We can pay 3% per day because we invest in the real world." LOL. What an idiot.

41.

I'm gonna play a game about fictional securities. Because I couldn't agree more with Forseti.

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