Thursday, 15 March 2007

The value of virtual money

Continuing the theme I developed a little while ago about the Virtual Economy, I noticed the other day that Linden Labs have a specific clause in their terms and conditions disclaiming any value (other than a license right) to the Linden Dollar:

Clause 4.1 states:
Regardless of terminology used, Linden Dollars represent a limited license right governed solely under the terms of this Agreement, and are not redeemable for any sum of money or monetary value from Linden Lab at any time

....Linden Lab may charge fees for the right to use Linden Dollars, or may distribute Linden Dollars without charge, in its sole discretion....

...You agree that Linden Lab has the absolute right to manage, regulate, control, modify and/or eliminate such Currency as it sees fit in its sole discretion, in any general or specific case, and that Linden Lab will have no liability to you based on its exercise of such right....

So the L$ does not actually have any value. In fact, Linden Labs have the right to flood the market with free L$ if they so wish; or to wipe out user's accounts (given that they see the L$ as having no monetary value).

Despite these assurances that the L$ has no value, it is interesting to note that the secondlife home page carries a display of the value of currency spent in the last 24 hours!

For me, it reinforces the idea that dealing in L$ is not something that RL organisations should be doing in anger, but is more a convenience for small transactions, or a novelty to be observed. In my travels around SL, I have been fascinated to see various financial products on offer, including currency exchange, stock exchange, banking and mortgages. I believe, thought, that we should not lose sight of the REAL value of the L$ - it is just like "Monopoly Money" - it has huge value with the GAME of Second Life, but has limited real value in the Real World.

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