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Virtual Future or Ponzi 2.0?



January 25, 2007 – Comments (1)

Could it be that the much-hyped Second Life is nothing more than a giant Ponzi scheme, predicated on cybersex and virtual gambling? This article (http://rando...fe_revo.html) makes a pretty interesting case that Second Life is a good old-fashioned Ponzi scheme, which suggests that corporations clamoring to look hip by entering the virtual world have no idea what they're getting involved in. The "Hey, look at us! We play in here, too!" crowd reportedly includes IBM (NYSE: IBM) Nike (NYSE: NKE), Sony (NYSE: SNE), Sun Microsystems (Nasdaq: SUNW), ABN Amro (NYSE: ABN) and others. Could the press, stumbling over itself to be the first to give us a glimpse of the new, new future, be missing the forest for the trees?

Naw, I'm sure they're all too smart for that.

But I do note that on the Second Life home page, there seems to be a lot of emphasis on the promise of building virtual fortunes. How much would you be willing to pay for an island in a world where creating more real estate is as easy as clicking a mouse?

1 Comments – Post Your Own

#1) On June 03, 2007 at 2:42 PM, maestrobri (< 20) wrote:

Six months later, I'm a little surprised this blog post got no comments at all (until mine).  Perhaps that says something about the relative credibility of Linden Labs and Second Life, but I have to say, after a pretty extensive personal investigation (my Second Life name is MaestroBri Anatine), that this post raises many of my similar concerns.  Certainly there is money being made in Second Life.  That fact is undeniable. But when the availability of virtual real estate, and the availability of the L$  that you buy it with are both controlled by Linden Labs, and as Seth points out, when these markets can be flooded with the click of a mouse (and have been), one has to wonder about the efficacy of such a "world".  Couple that with relatively tight control over the conversion of L$ to US$ (not to mention a hefty discount rate), and a few yellow flags start to go up.  I'm not ready to wave any red flags yet, because I have tremendous hope for the potential of the 3D web, and for Second Life in particular.  (I'd even like to see a Motley Fool presence to lend some sanity to the Second Life World Stock Market and others that have sprung up, in addition to several, apparently unregulated banks.)  I enjoy the early-20th-century feeling of limitless business potential on the virtual streets of Second Life cities.  I think it's a little early to cry "Ponzi" at this point, but hopefully most of us are going in with our eyes open and our pockets zipped shut.

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