Can We Use Bitcoins in Second Life?

Bitcoin, and the ideas behind it, will be a disrupter to the traditional notions of currency. In the end, currency will be better for it.

Edmund Moy, 38th Director of the United States Mint

         

          “Where are the bitcoins?”

          I asked this question in my last story about bitcoins in Second Life (SL) and I still haven’t found any.  (Significant Other thinks that it’s very vain of me to quote myself.  My

retort is who else writes about this stuff but me?)

          A recent search inworld revealed a few groups that discuss bitcoins purportedly but since many of these were associated with Bitcoin exchanges that had long since closed in

SL, I don’t have any hopes of anything going on.  

          I’ve done a fair bit of reading about Bitcoin since my last story.  (Anyone who’d like a great reading list just drop me a note!) What I’ve come away with is the question, “Can we use bitcoins in SL?”

          Before I answer that question, let me restate the problem first.  

          The only alternative currently for economic transactions inworld is Linden Dollars (L$).  Linden Lab (LL) has a monopoly.  Also, because of fairly stringent U.S. Treasury regulations on virtual currencies used in games and financial exchanges, LL has incentive to run a tight ship.  (Anecdotally, I’ve heard that while Federal penitentiaries are nominally better than state pens, one is best advised to avoid incarceration therein.  Again, my knowledge is strictly anecdotal.)  

          If someone tried to use another form of exchange there have been issues with these.

          Real Life (RL) cash or commodities like gold are impractical.  How would exchanges or delivery be made?  How would foreign exchange fluctuations be factored in?  How would one legally work around LL and US Treasury regulations without spending a fortune on paperwork?

          Credit cards while addressing some of the functional and regulatory issues noted above have another set of problems.  Anonymity and security for starters.  Would you give your credit card number blindly inworld to an anonymous resident?  (If you would then please look me up.  I have a virtual bridge that I’d like to show you!)  Then there’s the cost.  RL financial institutions charge a fee for each transaction charged to a card payable by the merchant.  Which raises another slight problem.  How many RL banks or credit card issuers

would issue a merchant account (Necessary to conduct credit card transactions.) to an anonymous business inworld.  (My guess is that their first phone call after a request like that would be to either the FBI or the Secret Service.)  

          OK, so those are all the traditional RL ways to possibly engage in financial activity inworld.  All non-starters.  

          Which brings me back to my original question, “Can we use bitcoins in SL?”

          The answer could very well be, “Why not?”

          Once one has obtained a bitcoin wallet in RL, one can use bitcoins.  Modifying kiosks or other payment devices in SL to accept bitcoins is a relatively straightforward exercise.  (Says a non-programmer.) Multi-signature bitcoin transactions and escrow services could be used to guarantee that all parties complete the transaction before payment is made.  

          Yes, some complexity and if escrow services are used then there would be some cost involved.  But, compared to what would be involved with any of the former payment methods that I’ve described, a relatively simple and inexpensive exercise.  

          Bitcoin can be a digital currency used across the Metaverse.  

          Bitcoin is secure and anonymous while eliminating the “play money” step with all the costs and inefficiencies that virtual currencies bring to the table.  Bitcoin would be faced with introducing its technology to virtual worlds, gaining adoption by a significant number of parties, and conversion of existing pricing to a one denominated in bitcoins.  

          A few disclaimers.  There’s always a few!  (Significant Other’s worried that I’ll be responsible for the next Great Recession.) 

          I’m not an attorney.  I don’t work with foreign exchanges in RL.  I’m advancing a few ideas here that are probably going to be the focus of some debate around the LL Terms of Service (ToS) and US Treasury regulations.  (Not to mention all the other governments in the world.)  Income earned inworld would still be subject to taxation.  I haven’t a clue how this would all work!  

          But, it’s a great discussion to have, isn’t it?

          I would love to hear from anyone who has any knowledge in this area!  

          Better yet!

          I’d really love to hear from anyone who has actually done anything with these ideas in SL or any other virtual world!  I’m sure my loyal readers (All three of them would like to hear as well!  OK, maybe just two of them, the other really enjoys my stories about nudist resorts inworld.)  

          One final thought, I’m not one of those who subscribe to the conspiracy theory that Bitcoin is a scam put together by the CIA and NSA.  

As always, I’m grateful to all inworld for their kindness and time in stopping to talk with a stranger who was passing through their lives!  

          My Twitter handle is @webspelunker.  Please feel free to follow me and I’d be happy to follow you.

I can be found on Google+ as webspelunker Ghostraven.

My flickr Photostream is located here.

On Skype I’m webspelunker Ghostraven.

I welcome feedback from readers, please either comment on my blog or e-mail me at webspelunker@gmail.com . 

          If you would like to read about my other adventures in Second Life please click here. 

          Open roads and kind fires!  

Looking Ahead to 2016 in Second Life

Life can only be understood backwards; but it must be lived forwards. 

Søren Kierkegaard 

 

          The ball has dropped in Times Square and people have done whatever else it is they do in Real Life (RL) to mark the end of the Old Year and the start of the New Year.

          I’ve already looked back on my misadventures in Second Life (SL) which was a good year and is now slowly passing into memory. (I ignore Significant Other’s comment that it’s

only a polite way to say that I’m already forgetting about it.)

It’s now time to look ahead to what I plan to do in 2016 inworld!

There will be two themes for my blogging in the New Year.  (Significant Other thinks I’m overdoing this.)

The first will be my friends.  (Contrary to what Significant Other says, they’re not afraid to admit publicly knowing me.  Well, maybe some are.) I’ve known many for almost five years now in SL.  They have active lives inworld and contribute much to the fabric of SL.  I’ll focus, with their permission, on their lives inworld and their contributions therein.

Next will the communities that make up SL. These are vibrant groups of people drawn together inworld for some common purpose.  This could be social, an activity, or educational.  They may stay only within SL or carry their impact out into RL.  I’ll highlight what they do and the results of their efforts.  An important aspect of many of these communities is how their members help one another or others.  This will be called out in my stories.  Contrary to what many think in RL, there is more to SL than either mindless dancing or endless copulation! 

I will be introducing new topics to my stories in 2016.  These will either be ones I haven’t blogged about before or are new to SL. I’ll also try to be edgier in the stories I write, pushing the edges of the envelope once again. 

A few of these new topics are a dungeon crawl series (I keep finding dungeons as I

visit castles inworld so I thought it was time to write about them!), a deeper look at role playing with stories on trials and jousting, another new series about China inworld, and looking into how we relate to one another in SL. 

Of course many old favorites will return!

Perryn Peterson and the Mieville community’s holiday celebrations will be covered as well as a closer look at their world.  Regular series like Great Castles, Great Gardens, Sex and the Single Avatar, and Erotic Art will be returning.  I’ll continue to look into the BDSM lifestyle.  I’m going to try to reinvigorate interest in my voyage across the seas of SL.  (I only need a crew!)  I’ll have new perspectives on Bitcoin inworld. Finally, this year will be fifth blogging about SL and I’ll do something to mark that.

So, a full slate of stories plus a few other ideas that I haven’t gotten around to finalizing yet!  I hope this will satisfy all three of my loyal users! 

As a community or a collection of communities, I’m happy to report that SL is alive and well!  The diversity of places to go, people to meet, and things is do is virtually (No pun intended!) unlimited.  I enjoy wandering across the Grid and bringing back my stories to my readers and I plan to do so as long as there’s a SL! 

Happy New Year! 

As always, I’m grateful to all inworld for their kindness and time in stopping to talk with a stranger who was passing through their lives

My Twitter handle is @webspelunker.  Please feel free to follow me and I’d be happy to follow you.

I can be found on Google+ as webspelunker Ghostraven.

My flickr Photostream is located here.

On Skype I’m webspelunker Ghostraven.

I welcome feedback from readers, please either comment on my blog or e-mail me at webspelunker@gmail.com . 

          If you would like to read about my other adventures in Second Life please click here.

          Open roads and kind fires!

 

Are Lindens Really Worth Anything in Second Life?

 All money is a matter of belief.

Adam Smith

  

          For the purposes of this story. I’m talking about the Linden currency in Second Life (SL) and not the Linden Lab (LL) Real Life (RL) staff who purportedly have “Linden” as their avatar’s surname.  (I say purportedly because I’ve never met one Linden in all my years inworld.  But, that’s another story for another time!)

          Today, I want to talk about Lindens as a currency, a store of value, in SL and if they’re really worth anything.

          Lindens are a centralized, virtual currency.

          In other words, LL holds all the cards.

          Unlike some virtual currencies, such as World of Warcraft, LL does permit Lindens to be exchanged for RL currency. 

          Now, LL doesn’t like that classification because of the US Treasury Department’s interpretive guidance on virtual currencies released in March 2013 by its Financial Crimes Enforcement Network (FinCEN).   (I’ll bet you don’t read too many articles about SL that reference US government websites, huh? Significant Other sighs nearby.)

          These regulations deem that LL is now a Money Services Business (MSB) just like Citigroup and Deutsche Bank.  Who knew?

          LL now terms Lindens as “transferable licenses” under its current Terms of Service (ToS).  I suspect they’re trying to avoid the onerous reporting and compliance rules that accompany being an MSB.       

          Apparently, FinCEN trumps LL and they make the call.  (Somebody wins one with LL!  I’m impressed that it took the full weight and majesty of the Feds to do this.)

          So, going back to my original question, “What are Lindens really worth anything in SL?”

         

For the ordinary resident, Lindens are a way to make small purchases (OK, maybe some aren’t so small, I’m trying to make a point here.) and to be able to walk around with some money in one’s pocket Lindens are useful and are as valuable as the individual holding them thinks they are.

          For the financial speculator with dreams of grandeur inworld that leech over into RL, I’d really keep my expectations in check.

          Remember, Lindens are centralized, (Don’t believe me?  Remember that LL has had a fixed exchange rate for like forever!)  anytime things get out of whack with the SL economy and money supply (And they do, even in RL, just ask Alan Greenspan.) LL will do whatever it wants with the supply of Lindens and the holders have no recourse.  (Sure, there’s probably some schnook in RL who’ll spend real money to get his virtual money back.  All I have to say to him is good luck!)

          Virtual currencies like Lindens are really only intended for gameplay.  Given the recent interest in them by various Treasury authorities around the world, I suspect that game developers will become more restrictive on how they’re used and can interface with RL. 

          Now, I do believe that sooner or later, a viable virtual economy will arise somewhere in the Metaverse. 

          The rise of true digital currencies like Bitcoin will see to that.  Lindens and their ilk will be fondly remembered for what they are, “play money.”

          Interestingly, while researching this story, I went back to the Bitcoin exchanges I’d visited in my earlier Bitcoin story only to find them all closed.  Further, any other references to Bitcoins that I could find just led to dead ends.  Currency exchanges only traded in Lindens for RL currencies. 

          Where are the bitcoins?

          Maybe there’s another story here! 

          Enough of the dismal science for now, although, I’ll return to this topic from time to time as RL events dictate.  (Significant Other wonders why I couldn’t just stay with the nudist resport.)

          As always, I’m grateful to all inworld for their kindness and time in stopping to talk with a stranger who was passing through their lives

My Twitter handle is @webspelunker.  Please feel free to follow me and I’d be happy to follow you.

I can be found on Google+ as webspelunker Ghostraven.

My flickr Photostream is located here.

On Skype I’m webspelunker Ghostraven.

I welcome feedback from readers, please either comment on my blog or e-mail me at webspelunker@gmail.com . 

          If you would like to read about my other adventures in Second Life please click here.

          Open roads and kind fires!

                                             

 

Bitcoin in Second Life

When it’s a question of money, everybody is of the same religion.

Voltaire

 

          I’m blogging about a topic in Second Life (SL) that I haven’t written about in a while and it’s money.  (Yep, figured that would get everyone’s attention.  After sex that’s always a good one!)  In particular, I’m writing about bitcoin.  The virtual currency that’s been in the press a lot lately. 

          Bitcoin is a recent Internet phenomena.  (Alright, maybe 2008 ain’t “recent” in Internet terms but you get the idea.)  Supposedly, it was engineered by a developer, Satoshi Nakamoto, which is supposedly a fictitious name.  The idea being to create a virtual currency independent of any governmental or regulatory authority.  Comes in handy if you’re a drug dealer, terrorist, or American Libertarian.  OK, that may be judgmental, there’re probably good reasons for this like you live in a dictatorship and need discrete funds for your revolution or afraid a government might confiscate your monies. 

          The recent financial crisis in Cyprus  seems to have revived interest in bitcoin as a hedge against confiscation of monies by governments or devaluation.  This is turn seems to generated a flurry of media articles about bitcoin.

          Naturally, when something happens in Real Life (RL), there’s a follow on effect in SL.  Wagner Au recently posted an interesting story on his blog in which he talked about the implications arising for virtual currencies like Linden Dollars because of increasing government scrutiny of currencies like bitcoin. 

          All this got me thinking about if I could find bitcoin in SL.  Seemed reasonable to me.  After all, SL is a virtual world.  Stands to reason that other virtual currencies could be found inworld.  Why another currency is needed in SL is another question but who knows?  (Would Linden Lab ever confiscate Linden Dollar balances?)  Seems the FBI has long considered SL to be a hotbed of money laundering. They also think it’s a great place for RL gangs to hang out.  Don’t believe me?  Check out their website. 

          So, using SL’s handy dandy search function, I go looking for bitcoin inworld.  Turns out there’s a fair bit (no pun intended) of bitcoin activity going on.  There’s a user group dedicated to the currency as well as a couple of currency exchanges.  There are a few references to bitcoin mining whatever that is.  (Don’t worry, I’ll try and find out.)  I find a link to a website where it’s possible to trade in Linden Dollars, bitcoin, Euro’s, and US Dollars in addition to a variety of other SL financial transactions.  (I need to spend more time looking over the financial services industry inworld.) 

          I drop in to visit The Rock Trading Currency Exchange.  It reminds me of any one of a number of faceless bank branches scattered across America’s suburbs.  All polished metal and marble with lots of glass.  Currency transactions are available.  A bank guard, a bot, stands stiffly in a corner.  (Must be something valuable around whenever there’s a guard.)

          Data boards flash prices for the different currencies.  I’m not sure what folks would do with bitcoin inworld.  I’ve only ever seen prices denominated in Linden Dollars.  Linden balances can be held with Linden Lab in SL.  I’m assuming that people keep their balances with the exchange.  An interesting concept.  Something else for me to check out in the future. 

          So, I find bitcoin in SL.  I’m not sure what people do with it or even what its future is.  Given the inferences on Wagner Au’s blog and those on Alex Kadochnikov‘s blog there may be some changes afoot for Linden Dollars and bitcoin.  Maybe depending on how the global financial crisis is resolved will determine their fates. 

          I’ve included a few pictures from my visits to the inworld financial institutions, The Rock Trading Company and GMG Financial Center, should anyone be curious about these locations. 

 As always, I’m grateful to all for their kindness and time in stopping to talk with a stranger who was passing through their lives.

I welcome feedback from readers, please either comment on my blog or e-mail me at webspelunker@gmail.com . 

     If you would like to read about my other adventures in Second Life please click here.

Photo No. 1  The Rock Trading Currency Exchange

Photo No. 2  The Rock Trading Security Guard

Photo No. 3  The Rock Trading – Bitcoin Trading Board

Photo No. 4  The Rock Trading – ATM

Photo No. 5  The Rock Trading Lobby

Photo No. 6  The Rock Trading Bitcoin Exchange

Photo No. 7  The Rock Trading Bitcoin Exchange II

Photo No. 8  GMG Financial Center – Bitcoin Trading Board

Photo No. 9  GMG Financial Center – Payment Options

Photo No. 10  GMG Financial Center Bank Floor