Gigs Shrugged

Linden Lab either is extremely smart, and has a plan and ulterior motives, or they are very short sighted and really are just making this stuff up as they go along.

Humps made an excellent post on SLU:

A few months back, (or however long it is since LL announced their new openspace policy/pricing), LL in one fell swoop almost ruined Sarah’s business along with many other landlords/estate owners. Who in their right mind would want to rent a quarter sim, with neighbours when for the same tier they could have an entire sim with privacy and the same prim count. Back then Sarah and her peers were justifiably annoyed. FUCK YOU said LL. This is how it is going to be….get on with it.

So ever resourceful, Sarah (along with many of her peers) completely altered their business model. Converting full islands into open spaces and buying new ones in order that they could salvage their business in some form or another. LL could not fail to recognise what was happening. It was after all the only viable thing for estate owners to do, or be left with empty regions which still need to be paid for every month. I would go so far as to say that LL actively encouraged this as the way forward for estate owners. They even brought in additional, new measures to help facilitate this… i.e. the transfer owner to payer option.

For them to turn around now and say that ANYONE abused the situation is a second FUCK YOU from LL. They have happily taken the orders (and the fee’s), happily taken the tier every month, so to say they were unaware of the problem this might cause down the road is simply naive. At best it is rank opportunism on their part.

The central bank is an institution of the most deadly hostility existing against the Principles and form of our Constitution. I am an Enemy to all banks discounting bills or notes for anything but Coin. If the American People allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the People of all their Property until their Children will wake up homeless on the continent their Fathers conquered. -Thomas Jefferson

Linden Lab Raises Openspace Island Prices With No Grandfathering

I think you could make a pretty compelling legal argument that there is a tortuous injury here.

The right to use a Second Life region is an asset. It’s a limited license right that can be transferred, subleased, and generally has value as an intangible asset. If Linden Lab damages the value of that asset for their own gain, then it seems to me you could pretty easily sue to recover the damages. Your intangible asset was impaired by the actions of another.  Linden Lab can reasonably foresee that raising the price of OpenSpace regions from $75/month to $125/month will damage those who invested in the up front fee to acquire these limited license rights to access Linden Lab servers.

Something to think about, especially if you are Linden Lab.

Massively has other coverage of the story.

I once registered a domain… pdlibrary.com.  I had planned to make it a repository of public domain documents.  That never happened, and I think some domain squatter has the name now, as I let it expire.  Thankfully, these people have picked up where I dropped the ball, and have posted things like Fire, Plumbing, and Electrical codes.  No need to pay $75 for the NEC 2008, just download it here.  The courts have found that the law can’t be copyrighted, as it should be.  We shouldn’t have to pay to know the laws we are legally obligated to follow.

Government Public Domain Documents

Avatar data, authentication information, identity data, inventory, and many other services necessary to create the Second Life experience reside on our backbone services servers and their associated databases.  Our current architecture does not anticipate moving these services away from Linden Lab’s servers.  Our Architecture Working Group is working on open protocols that will enable external servers to connect to the Second Life Grid. (Source)

If it was not clear before, it should be clear now.  The AWG isn’t about an open metaverse, it’s about coming up with ways for people to connect servers to the proprietary Second Life Service ™.

At some point, Linden Lab was espousing the idea that they would play a central, but small role in the open metaverse, something like Verisign.  Philip Linden declared that Second Life would become “bigger than the web”.  There were talks about standards bodies and standardizing the protocol.

All those concepts have faded away now.  It has become increasingly clear that Linden Lab is interested in one thing: Preserving the walled garden.  Right now Linden Lab gets money to host servers: region servers and centralized servers.  Maintaining all those region servers sure is expensive, and it’s running into limits of scale.   Linden Lab seems to be increasingly viewing the open metaverse as simply a way to farm out and distribute pesky and relatively expensive region servers, while still collecting rents on the central services.

Of course, this was always part of the plan.  It was always assumed that Linden would provide a way for third parties to connect region servers to their grid, eventually.  What was not clear that this would be the entire purpose and focus of the AWG.  We gave Linden Lab the benefit of the doubt.  We assumed there would be a quid pro quo.  After all, Linden Lab would still have a massive advantage over any alternative service in terms of social critical mass.  Now we can see that Linden Lab isn’t designing anything here other than a way for people to help scale their proprietary walled garden.

(Photo: Robert Scarth.  Second Life is a Registered Trademark of Linden Research, Inc.)

A reader writes:

I can’t fathom what alternative monetary system you are implicitly advocating. I mean even gold was a fiat system because gold had its primary value in that others believed it had value and not for its intrinsic properties, right?

This is a good question. Your thought stems from the assumption that what makes something a fiat currency is simply that everyone agrees to accept it as money. That’s not correct. That’s a property of all currencies.

A fiat currency is defined as one that has a higher face value than the underlying commodity value of the metal. Surprisingly, pennies don’t currently meet that definition of fiat currency! The metal value of a penny currently exceeds its face value. This is a common occurrence as governments devalue their currency more and more, until only the cheapest steel coins are feasible.

So some of this is semantic. A fiat currency is defined by not being a representation of a particular quantity of metal, usually gold. That’s just how it’s defined.

So why gold? Gold has a few attractive intrinsic properties. It is finite in supply. It can’t be created out of thin air or synthesized (well, not in an economically meaningful quantity). It isn’t consumed. Other than that though, no, gold isn’t really special. It’s just a particular commodity that we (and economists) have designated to be defined as the sound money base.

Silver was just as important, when you look at the British empire and its silver base. It has all the same properties that gold has above, except that it has been consumed at a higher rates in the past and converted into forms that “bind” it and are harder to recover (such as photographic films). This consumption makes it a little more volatile since there is more market demand for it as an actual commodity. So you see, actual intrinsic usefulness is sort of a liability for a money base.

This idea that we need an ever-expanding monetary base is artificial and relatively recent. It would take some adjustment for people to stop expecting their wages to go up every year, but once they saw that prices also were going down or staying the same rather than going up, it would be fine.

Sustained use of fiat currency is the unprecedented experiment. Throughout human history, gold and silver were money. In the last 60 years or so, there has been this massive move toward fiat currency world wide. Prior to that, fiat currency was only used by insolvent governments who could not meet their obligations in hard money. Even that use was temporary.

Everyone is talking about recapitalizing the banks as if that will be the one magic bullet that will “save the stock market”.

It won’t. Things are going to get worse before they get better. The Fed is out of wiggle room with interest rates, right now they are effectively on the floor.

The next step will be to change the fractional-reserve rate.

The current rate is 10%. As you can see from this chart, $100 deposited magically turns into over $900 that the banks can loan out in short order. You will also note that it’s pretty nonlinear.

Reducing the reserve rate to 7.5% will effectively create massive amounts of new money, exactly what the fed wants to do.

This is a drastic measure. I’m sure it will be spun as “necessary”, and there’ll be lots of FUD promising more stock market losses if it isn’t done.

This will be one more step on the road to massive inflation. This is money out of your pocket, and into the government. This fundamentally will change the rules.

But it’s not just a tax on you, inflation is a flat tax on everyone that deals in USD. This includes petrodollar interests overseas. At some point, they might not be intimidated by our military threats any more, and will stop using USD. Because of this, no matter who gets elected will continue to threaten overseas oil interests with military intervention. If any of them drop the use of USD for oil, we will see a quick military response.