As featured in The Wall Street Journal, Money Magazine, and more!
     

The Virtual Reality Economy of Second Life

This article was written by in Economy, Internet. 4 comments.


Second Life logoI heard on the radio this evening that Reuters is opening a “bureau” to cover news in the virtual world — an online role-playing game — called Second Life.

This world is so immense and detailed, it allows the “players” to participate in any activity they could in the real world. You can open businesses, participate in communities, buy land, and hire people to build homes in 3-D through the Internet. This virtual world uses its own currency, called Linden dollars. Each day, the exchange rate between US dollars and Linden dollars is calculated based on supply and demand. Your membership fee is charged in US dollars, but to own land or to make other purchases, you pay in virtual Linden dollars.

However, Lindex dollars aren’t exactly virtual. Thanks to the many people who play the game, there is a demand for the fake money. The fact that people are willing to buy Linden dollars to participate in the game legitimizes the currency. One prominent virtual real estate broker makes $100,000 a year. In real money. This income isn’t even taxed! Have no fear, Congress — the real, not virtual Congress — is looking into that.

Adam Reuters, the Virtual Life citizen representing the Reuters organization, interviewed the CEO of the biggest (possibly the only) bank in Second Life. To me, it seems like this economy is not quite ready to be legitimate. Nevertheless, you can currently trade L$275.5 for US$1.

Want more Second Life news? Visit the Second Life Reuters News Center, headed by Adam Reuters (also known in the real world as Adam Pasick). Here is his interview with Marketplace, a real-life radio program.

Updated December 20, 2011 and originally published October 16, 2006. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

Email Email Print Print
avatar
Points: ♦127,500
Rank: Platinum
About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 2 comments… read them below or add one }

avatar GaryP

If he earned $100,000 in the real world – then it is taxable – now, he may be hiding it from the IRS but that is another story.

Reply to this comment

avatar mbhunter

A friend from work is a land-owner — he’s just in the black this month. Crazy black hole for time, though.

Reply to this comment

Leave a Comment

Connect with Facebook

Note: Use your name or a unique handle, not the name of a website or business. No deep links or business URLs are allowed. Spam, including promotional linking to a company website, will be deleted. By submitting your comment you are agreeing to these terms and conditions.

Notify me of followup comments via e-mail. You can also subscribe without commenting.

Previous post:

Next post: