Tuesday, January 22, 2008

Et in Second Life ego

I am just as out of touch and clueless as members of Congress and other lawmakers who are befuddled and have no idea what to do about recent financial scandals on Second Life:
Stephanie Roberts knew Second Life was just a computer game, but she couldn't resist the virtual world's promise of a real-world interest rate of more than 40%.

The 33-year-old from Chicago, who played the game as a raven-haired vixen called Zania Turner, deposited $140 in Ginko Financial and waited for the money to grow. Instead, it vanished five months ago when Ginko, perhaps the first Ponzi scheme in history perpetrated by three-dimensional online avatars, left Second Life.

"I was foolish," Roberts said.

So were many others. Ginko took with it about $75,000 in real-money deposits, shaking faith in Second Life's venerated lawlessness -- no cops, no courts, no government -- and unnerving Linden Lab, the usually laid-back San Francisco company that created it.

Recently, Linden Lab banned all virtual banks from the online role-playing game, giving them until today to shut down, fearful that Ginko wasn't the only one paying crazy rates of return to some with the deposits of others.

Within moments, there was a meltdown. ATMs didn't work when players rushed to withdraw their Linden dollars, which can be exchanged for U.S. currency at a rate that hovers around 270 to 1. Stocks plunged and so did real estate prices.

This is such a weird story. I had some vague idea that people were using "Lindens" as currency on Second Life, but I had no idea that people were spending thousands purchasing "real estate" on Second Life, and that there were ATMs and banks on Second Life. I feel like a total geezer.

People are always messing up their utopias.

1 comment:

toddy said...

Apparently, American Apparel had opened a shop in the program.