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FEATURE FOCUS LENDING
The Linden Dollar - Learning from the development of virtual currencies
The Linden Dollar (L$) is the currency used in the virtual world of Second Life and gets its name from the development studio of the platform, Linden Labs
Junior Reporter Henry Vilar
multiplayer online role-playing game, but its creators prefer not to view it that way. In this world, users create their own avatar, pursue some self-imposed goals and interact with other users through the different systems made available. One of the most important methods of indirect interaction is through the world’s economy, which weaves into the physical world via Linden Dollars.
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Like any other currency, Linden dollars can be used to buy, sell, rent or trade land or goods and services with other users, or ‘residents’. What is especially interesting about this particular currency is that it can be traded on market-based currency exchanges. According to Linden Labs reports, their currency generated US$3,596,674 in economic activity during the month of September 2005. Linden Labs reports in a forum post that last year alone 2016, users processed credits amounting to $60 million from the Second Life economy.
How the Second Life economy operates
Residents can create their virtual content – furniture, art or even clothes – and sell them in the in-game marketplace, or set up a shop in the virtual world. Similar businesses were created around services, such as entertainment and wage labour; and Second Life’s virtual estate market. Even though it is a digital world, virtual land can be bought and sold.
In regards to the virtual estate market, Second Life sees fluctuations in land prices, according to the popularity and
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econd Life is similar to a massively
activities taking place in that area. Some residents have even been known to earn large incomes from the Second Life real estate market.
To better understand how all these
elements interact, here’s an example: Second Life user Chase01 tells a fellow resident, who wants to sale avatar poses and shapes from a shop:
“The shape business doesn’t require an in-world presence to be successful. As a new business with a lot of competitors (I am not even going to try and guess), the safer route in my opinion, is to take the business to the marketplace (MP). The in-world location will not only require capital to get rolling, but it will also carry a weekly expense.
Putting up shop doesn’t draw business as it used too several years ago. A lot of consumers don’t frequent malls, and a lot of people don’t necessarily explore the complex they find themselves in. I have changed my shopping behaviour
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