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Second Life Economy, Banks Crushed
David Utter
Staff Writer
2008-01-23
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People who plugged real money into the online world Second Life and its virtual banks promising rich returns have been left holding the bag.
ATMs in Second Life allow no withdrawals of Linden dollars, the virtual currency. A full shutdown of the Second Life banking system has participants who made deposits wondering if they will get their money back.
The Wall Street Journal said these banks, operated by other players in Second Life, promised interest rates for a return on investment. Security pros will be unsurprised to learn what happened next:
While some banks paid interest as promised, others used depositors' money for unsuccessful Second Life land and gambling deals.
The shutdown has caused a real-life bank run by Second Life depositors. Though some players managed to get their Linden dollars out, others are finding that they can no longer make withdrawals from the make-believe ATMs. As a result, they can't exchange their Linden-dollar deposits back into real dollars.
The gambling investments crashed when Second Life banned gambling throughout its world last summer. The Journal said that led to a run on one bank that invested heavily in gambling.
That cascaded into the ban on withdrawals seen today. Those who bet on an easy way to score huge returns learned one of life's routinely administered lessons: no such thing as a free lunch.
View All Articles by David Utter
About the Author:
David Utter is a business and technology writer for SecurityProNews and WebProNews.
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