SecondLifeEconomy

**The Market Minutes of Second Life**
(My website is a PDF and not fully functional )

Second Life is a multimass online virtual world, where users are encouraged to create and have legal IP (intellectual property )rights over what they have create. The currency that is used in the game is called Linden Dollars, which is exchangeable with U.S. dollars (and other foreign moneys) at a varying rate. WIth these two factors combined, users can sell or buy goods and services in the virtual world, bringing the virtual world closer to the real world. My website provides examples of instances when one's first life has become about their second life, which is a phenomenon in itself. It discusses three interesting forms of business that have influenced the movement of money in the virtual world of Second Life. These three topics are: virtual estate, banking, and retail and avatar alteration.
 * Rational**

In the layout, I used a 6 column grid, which I ended up dividing into three columns. The far left coloumn was used to post links, the middle for text, and the far right for images. There is a banner at the position of the header and a navigation bar right underneath. I tried to use the web 2.0 style, which is characterized by cleanliness and minimalism.

In my research, I toyed around with the idea of discussing topics such as the law of first life in application to second life, cybersex (which is a huge part of second life), the stock exchange, and griefers of the digital world. However, I settled on the three topics I did because I felt they had the most connection to each other and were of great interest to me and would be of interest to others as well. Finally, I will end with this statement, "Like first life, Second Life is a work in progress." ([|http://www.knowprose.com/secondlife_consultant)]

research:
//IP Rights//

Linden Lab's Terms of Service agreement recognizes Residents' right to retain full intellectual property protection for the digital content they create in Second Life, including avatar characters, clothing, scripts, textures, objects and designs. This right is enforceable and applicable both in-world and offline, both for non-profit and commercial ventures. You create it, you own it – and it's yours to do with as you please. ([|http://secondlife.com/whatis/ip_rights.php)]

Lindex - For a user to be able to purchase items in second life

//Linden Dollar Exchange// Second Life has its own unit-of-trade, the Linden Dollar. Residents use their Linden Dollars to pay for goods and services provided by other Residents. The Linden Dollar can also be exchanged for U.S. Dollars and other foreign currencies on a number of different websites, including right here via the LindeX exchange.

About Second Life's Linden Dollar Exchange

The LindeX is a Linden Dollar exchange offering residents of Second Life the ability to either buy or sell Linden Dollars. Charges are for purchasing Linden Dollars and are placed on the same form of payment you have setup in your account settings for your Second Life account. If you have a credit on your US$ account balance that credit will be applied first. Prices at this site are set by the market price - I.E. the best price offered by the different sellers of Linden Dollars.

For information about the LindeX and billing transaction limits please click here

NOTE: While the purchase of your Linden Dollars is done automatically and the Linden Dollars are delivered immediately and directly to your purchasing avatar's account, if you are logged in it may take a few minutes for the in-world database to synchronize with your account. Often travelling to another region or logging off and back in will cause the balance displayed in your viewer to update in a more timely fashion.

To see more information about LindeX fees and how credit on your US$ balance can be used click here.

//UPDATE - Anshe Chung gets new venture funding// Thu Sep 13, 2007 6:09am PDT

By Adam Reuters

(Adds confirmation from Gladwyne)

SECOND LIFE, Sept 13 (Reuters) - Anshe Chung Studios, the virtual world development and real estate company with major holdings in Second Life, has received a new round of venture capital financing from New York-based Gladwyne Partners.

The investment, first reported by 3pointD.com, was confirmed by Gladwyne Managing Principle Michael Solomon in an email to Reuters. He declined to reveal the size of the deal.

Anshe Chung Studios was not immediately available for comment.

Wuhan, China-based Anshe Chung Studios has branched out to other virtual worlds including IMVU, There.com and Entropia. The company is run by the husband and wife team of Ailin and Guni Graef (Anshe Chung and Guni Greenstein in Second Life).

European Founders Fund obtained a 10 percent stake in the company for an undisclosed sum in March.

**notes and rough draft of website:**


Second Life

Second Life is a 3-d virtual world where one can build their own avatar (their second self) and fly across virtual landscapes. This virtual world is created by it's residents, which are from all over the globe. An in game programming software allows for the avatars to create anything, from butterflies to islands. The Linden script language allows for the user to control the way the avatar moves and acts. Second life has an active and very real economy, which blurs the boundaries of one's first life and second life. Many users find that they can make a living off their second life. How is this possible?

Welcome to the Market Minutes of Second Life, where we discuss three interesting forms of business that have influenced the movement of money in the virtual world of Second Life.

The Second Life, goods and services must be paid in Linden dollars, which is a fictional currency, but it must be purchased using US dollars or other foreign currencies. Linden dollar can also be sold for US dollars, and there is an exchange rate that varies from time to time. So in essence, one can earn Linden dollars in virtual reality and convert it to US currency.

brief history and summary

explanation of linden dollars <--> real money

>>> leading to business opportunities (capitalism)

1. real estate : virtual property

2. Skilled jobs 3. stock exchange 4. real life laws imposed on second life 5. Second Life Shadows 6. Rights

NARROWED:

1. real estate: virtual property (examples, programmers for architecture) 2. Banking and financial (money management): stock market, banking, 3. General Service Sector

EVEN MORE NARROWED:

1. real estate: virtual property (examples, programmers for architecture) 2. Banking and financial (money management): stock market, banking, 3. Retail and Avatar Alteration services

Research :

Virtual Estate

Types of Virtual Estate?

What can you do with virtual land?

What is the Land Store?

Who is Anshe Chung?

- there are two types of virtual estate in Second Life: - Main Land: owned and managed by Linden Lab - Private Estate: leased from Linden Lab and managed by Private owner - you can rent land (pay monthly fee called tiers) or buy land (pay large amount at beginning and lower tiers)([|http://wiki.secondlife.com/wiki/Land_Buying_FAQ)]

What can you do with land? - store your second life items/creations on it as well as display and host gatherings. - owning or renting land increases the amount of virtual possessions you may have as it is a place of storage. - for example, if you have a fashion business, you could display your merchandise on your land.

Land Store: Much like ebay, the Land Store is a online shop that allows you to bid for a piece of desired virtual land. You can also buy this land right away and each region costs US $1675 which will give you ownership rights immediately. However, if you reserve, or bid, for a piece of land, then the auction starts at US $30.

Who is Anshe Chung? - Anshe Chung is the first online avatar " with a net worth exceeding 1 million US$" in 2006 (Anshe Chung Studios). Chung started her business in 2004 by buying land in bulk and building themed lodgings and environments in the virtual space. Themes such as Gothica, Arabia, Mediterranean, China, Dreamland etc. were created. Architecture and lifestyles that emerged, appealed to thousands of residents whom pay her company to reside on her land. The creation and maintenance of her virtual space is overseen by her real life company, Anshe Chung Studios, which employs over "80 people full time, and is extended by a huge network of virtual reality freelancers world wide. " - Anshe is the richest avatar in second life and her business continues to grow today, spreading to other online mass-player games such as IMVU and There. - her success is proof of how the lines between first life and second life begin to blur, as her first life career is now all about her second life.

- Owning land in Second Life allows you to build, display, and store your virtual creations, as well as host events and businesses.

Become a part of history by purchasing land and developing your own piece of Second Life. The Pricing and Fees are simple; you pay $9.95 a month plus a Land Use Fee proportional to the amount of land you own.

Whether it's a modest nook for a relaxing cottage, or an entire island to build your dream amusement park, land is for everyone.

Banking in Second Life Why do residents place their money in virtual banks?

What is the Ponzi scheme?

Why does unregulated banking no longer exist?

The controversy?

Why do residents place their money in virtual banks? - the unregulated banks that existed in second life promised extremely high interest rates, some up to 95% return per year ([|Reuters)]

The Ponzi scheme? - A ponzi scheme occurs when an organization asks for deposits of money in promise of high interest rates that are returned to initial members that joined, by using the money that is put in by new members. This scheme will inevitably collapse one day, as there is no real method for the organization to make money (therefore unable to return interest) other than taking other people's money. In the end, the organization takes the money and leaves it's members, scamming them of their cash.

Why does unregulated banking no longer exist? - Linden has placed a ban on unauthorized banking: "As of January 22, 2008, it will be prohibited to offer interest or any direct return on an investment (whether in L$ or other currency) from any object, such as an ATM, located in Second Life, without proof of an applicable government registration statement or financial institution charter. We’re implementing this policy after reviewing Resident complaints, banking activities, and the law, and we’re doing it to protect our Residents and the integrity of our economy." (Linden) - this was spurred by the shutdown of Ginko bank that said they "would be unable to repay approximately 200,000,000 Lindens (U.S. $750,000) to Second Life residents who had invested their money with the bank over the course of its three and a half years of existence. " (Fugazzi) (Reuters) - this bank has been speculated of operating on a ponzi scheme as their return rates were close to 40% interest - the ban on unauthorized banking has also caused a run on the banks as everyone rushed to withdraw their Linden dollars. - The loss of money greatly affects the image and economy of Second Life, which continuously boasts that many people are making a living off of their world (Naone)

the controversy: - It's time real regulations were imposed on second life, this game involves real money transfered into fictional currency, which in the end, is still money. - Real life regulations should not apply to second life, linden should just have better judgement in overseeing this world. Some poeple play second life just to escape their real life, and it would flow against Second Life's motto "Your world. Your imagination."

3. Retail and Avatar Alteration services Why the avatar alterations? What can I purchase? Why the purchases?

Why the avatar alterations? - Humans as social beings have a tendency to want to look a certain way or give off a certain impression. By altering the second life avatar, one is controlling the impression they give off in their second life; possibly because they cannot control their impression in first life. - For example: one can pay to have a professional alter their hair color, style and specs. - Perhaps there is a job for the virtual playboy magazine that requires a pretty face and curvy body, perhaps one's avatar is a virtual celebrity (singer) and needs to change their image.

What can I purchase? - One can purchase just about anything that can be created, food, clothing, guns, transportation, buildings, designs etc. - For example, a frequently advertised clothing line in second life is FNKY Cake - Items are purchased by Linden dollars

Why the purchases? (they are not tangible) - People consume to show status, this is no different in second life especially since there are product lines that have established what class of society they belong to. - The rarer the items you have, the more expensive home you live in, then the higher up in society you seem to be - Once again, the purchases are used to build a life and niche in a world that has the motto of "Your world. Your imagination." Second life are used by many to satisfy what cannot be satisfied in first life.

Like first life, Second Life is a work in progress. (knowprose)

Gladwyne Partners also owns a stake in virtual world development studio Electric Sheep Company.










 * html/css notes:**





My pdf file that has the whole website on it:

Works Cited "Anshe Chung Studios." Anshe Chung Studios. 3 Mar. 2008. 3 Mar. 2008 <[|http://acs.anshechung.com/>.]

Babin, Janet. "Second Life's Economy Slows Down, Too." Marketplace. 22 Jan. 2008. 26 Feb. 2008 <[|http://marketplace.publicradio.org/display/web/2008/01/22/second_life/>.]

Fugazi, Nobody. "What Happened to Linden Lab?" Your2ndPlace. 18 Feb. 2008. 4 Mar. 2008 <[|http://www.your2ndplace.com/node/906#comments>.]

Gardiner, Bryan. "Bank Failure in Second Life Leads to Calls for Regulation." Wired. 15 Aug. 2007. 2 Mar. 2008 <[|http://www.wired.com/gaming/virtualworlds/news/2007/08/virtual_bank>.]

Hof, Robert D. "My Virtual Life." Business Week. 1 May 2006. 29 Feb. 2008 <[|http://www.businessweek.com/magazine/content/06_18/b3982001.htm>.]

Hutcheon, Stephen. "Jitters in Second Life as Bank Shuts Doors." The Age.Com. 10 Aug. 2007. 1 Mar. 2008 <[|http://www.theage.com.au/news/web/jitters-in-second-life/2007/08/10/1186530581488.html>.]

Hynes, Aldon. "The Future of the Second Life Economy." Orient Lodge. 9 Jan. 2008. 28 Feb. 2008 <[|http://www.orient-lodge.com/node/2716>.]

Knowprose.Com. 4 Mar. 2008 <[|http://www.knowprose.com/secondlife_consultant%29>.]

"Land Buying FAQ." Wikispaces.Com. 29 Feb. 2008. 1 Mar. 2008 <[|http://wiki.secondlife.com/wiki/Land_Buying_FAQ>.]

Linden, Ken D. "New Policy Regarding in-World “Banks”." Second Life. 8 Jan. 2008. 1 Mar. 2008 <[|http://blog.secondlife.com/2008/01/08/new-policy-regarding-in-world-banks/>.]

Ludlow, Peter, and Mark Wallace. The Second Life Herald. 2007.

Mark. "Making a Life in Second Life, Mark Van Doorn Philips Research." Experience Economy. 20 Feb. 2006. 4 Mar. 2008 <[|http://www.experience-economy.com/2006/02/20/making-a-life-in-second-life/>.]

McGoun, Clive. "Hyperreality." Cultural Identity. 7 Jan. 2008. 3 Mar. 2008 <[|http://culturalidentity.wordpress.com/term-2/case-study-1/hyperreality/>.]

Naone, Erica. "Money Trouble in Second Life." Technology Review. 8 Aug. 2007. 3 Mar. 2008 <[|http://www.technologyreview.com/Biztech/19193/>.]

Reuters, Eric. "High Risks, High Rewards in Virtual Finance." Reuters. 6 Dec. 2007. 4 Mar. 2008 <[|http://secondlife.reuters.com/stories/2007/12/06/high-risks-high-rewards-in-virtual-finance/>.]

Reuters, Eric. "UPDATE 3 - Linden Bans Second Life Banks." Reuters. 8 Jan. 2008. 1 Mar. 2008 <[|http://secondlife.reuters.com/stories/2008/01/08/breaking-linden-bans-second-life-banks/>.]

"Second Life." Second Life. 28 Feb. 2008 <[|http://secondlife.com/>.]

Wong, Grace. "Second Life's Looming Tax Threat." CNNMoney. 9 Mar. 2007. 24 Feb. 2008 <[|http://money.cnn.com/2007/03/02/technology/sl_taxes/index.htm?postversion=2007030914>.]