Bank Run in Second Life

Jamie found an interesting bit about a bank run in Second Life. The recent ban on gambling combined with a $12k theft from the 2L stock market has caused people to try to get their money back. The article mentions that this could supposedly affect 8.5M players even tho most estimates of actual hard core players in the system are in the 5 to low 6 figure range.

Comments

Re:Vast exaggeration

[morgan_greywolf]

No, no. What they're saying is that banks like this (not just Ginko, there are others like it) will have an effect on the economy of the game. Think about it. If there were real banks doing this what effect would it have on the economy? Think 1930s America, because that's almost exactly what happened.

The most interesting part of the article to me, though was this tidbit:

Because the Linden dollar has no commodity backing, he says, the Second Life economy is in danger of crashing when provoked by any sufficient shock.

Now, s/Linden dollar/U.S. dollar/ and s/Second Life/U.S./ and the sentence would still be correct. Go ahead, try it. Read it again. Because the U.S. dollar has no commodity backing...

Re:You don't think debt is a commodity?

[Control Group]

Yes, debt is a commodity of sorts, I suppose. But debt, like Linden dollars, is still virtual, right? If not, post a link to a picture of debt. Point is, there's no physical commodity backing dollars at all. It used to be back by gold, but it's not anymore.

That's a bit disingenuous - I challenge to post a link to a picture of "value." The very notion of value is virtual, since the universe certainly doesn't care whether there's gold in them thar hills.

And don't fall into the trap of thinking that gold is somehow magical in its ability to have value. Gold is only valuable because people say it is, just like the US dollar. The only difference is that the scarcity of gold is based on physics and the relative difficulty of building a supercollider, while the scarcity of US dollars is based on the desire of the US to have a functioning economy.

If you don't believe me, think about how you'd value the following if modern civilization were to collapse - potable water, food, matches, ammunition, tobacco, liquor, coffee, paper, gold. Now imagine everyone else thinking the same thing (because civilization has collapsed).