What is up with virtual currency?

[Abigail Longmeadow]

There has been a large drop in the value of most kinds of virtual currency today, but not in Lindens. It looks like Lindens are holding steady, according to the Buy Lindens web site. Has anyone bought or sold Lindens today? I suspect that Linden Research has long be regulating the exchange rate, freezing it to the US dollar as much as they can. They want to keep it steady. Is it connected to the speculative nature of crypto currency (Bitcoin, Ethereum, Dogecoin) vs. Lindens being more of cash substitute?

 

[GoblinCampFollower]

It makes sense Lindens would be very isolated from stuff like crypto since it's not really an open market. It's very regulated by LL as you said, and was never really marketed as a cash substitute for real world stuff.

 

[Veritable Quandry]

Lindens are an in-game token sold to allow users to buy in-game goods. Linden Lab controls the exchange rate.

Crypto are intended to be a currency for general use but are in fact an investment asset. No one controls the price directly, it fluctuates with the investment market.

With the overall market down, investors are becoming more conservative and moving money to more traditional things like stocks and bonds.

 

[Noodles]

Linden Bux are more like World of Warcraft Gold than Cyrpo Currency. It's not Crypto at all actually. So it's not going to be volatile like Crypto.

 

[Imnotgoing Sideways]

Currency only has value if someone says it has value. Gladly, the people who say the US dollar has value also have nuclear bombs. =^-^=

 

[Free]

Currency only has value if someone says it has value. Gladly, the people who say the US dollar has value also have nuclear bombs. =^-^=

The Department of the Treasury have nuclear bombs?! No wonder they're so antsy when the Fed thinks about raising interest rates.

 

[Beebo Brink]

Lindens are an in-game token sold to allow users to buy in-game goods. Linden Lab controls the exchange rate.

The value of Lindens is that other SL residents will buy them from you (using US$) so that they can make in-world purchases of user-created furniture, clothes, hair, etc.

It's like poker chips, only instead of the LL casino exchanging them for real dollars, it's other players who pay you for your chips so they can play the casino games. Take that poker chip out of the casino and it's worthless, just a cheap plastic disk with the casino name painted on it. No other casino will accept it as a playable asset, no local store will take it in exchange for goods and merchandise. It only has value for playing games in LL casino.

When LL finally closes shop (as all businesses do, eventually), Lindens will immediately and permanently devalue to 0. Because who would buy a virtual game token for a game that can't be played anymore?

 

[Abigail Longmeadow]

That makes sense. However the exchange value of Lindens to the US dollar has remained completely stable, while all crypto currencies have fallen a lot. That must mean something. Crypto currency (like Bitcoin) seems to be a speculative investment, while Lindens have been amazingly stable. I suppose that says something about the financial strength of the lab and Tilla. I was expecting there to be something like a "run on the Linden bank", as players rush to cash out their Lindens. That is clearly not happening.

 

[Veritable Quandry]

There will not be a run on Lindens until Linden Lab is in some kind of financial distress that makes their continued operation questionable. And even if that happens they will collect fees as people cash out, propping up the Lab for a short time. If LL is in danger of bankruptcy, the TOS gives them the ability to cancel all Lindens. That will only happen when the company is about to cease operations, as it will destroy all of the businesses that SL relies on to keep the in-world ecomony open.

Lindens are not connected to speculative markets, and people who hold any significant balance in Lindens do business in SL. They are not attractive to investors because (1) the value is stable so no potential for significant profits (2) LL collects fees to buy and cash out Lindens and (3) the SL TOS allows LL to wipe out all Lindens without notice as they are in-game tokens only.

 

[Beebo Brink]

However the exchange value of Lindens to the US dollar has remained completely stable, while all crypto currencies have fallen a lot. That must mean something.

They are completely unrelated systems. There is no connection between cryptocurrency and Lindens, in any way. it's like wondering why your dishwasher still works even though your car battery has run down.

 

[Free]

it's like wondering why your dishwasher still works even though your car battery has run down.

I'm sorry, but if you're running your dishwasher off your car battery, I'd consider that a goddamn miracle.

 

[Caete]

I'm sorry, but if you're running your dishwasher off your car battery, I'd consider that a goddamn miracle.

Nonsense, it may violate some human rights/geneva convention "suggestions" but jumper cables attach to most things...

 

[Veritable Quandry]

At 12 volts, it probably doesn't have enough to start the motor. You need 10 car batteries in series to work.

 

[Bartholomew Gallacher]

There has been a large drop in the value of most kinds of virtual currency today, but not in Lindens. I

Which virtual currencies are you talking about?

 

[Free]

At 12 volts, it probably doesn't have enough to start the motor.

American ingenuity and laziness smashes reality again!

 

[Argent Stonecutter]

The value of a Linden is based on the demand for land and goods in Second Life. There's no reason to expect it to be connected to the crypto fraud ecosystem.

There was this one short story by Cory Doctorow where it was a successful world currency, along with his imaginary reputation-based currency (Whuffie) and e-Gold and other online currencies of the '00s. But that was fiction.