Virtual World News: OpenSim Development: Show Me the Money!

September 24th, 2008  |  Published in Second Life News  |  3 Comments


By Sigmund Leominster, News Editor

At this year’s Second Life™ Community Conference (SLCC) in Tampa, Florida, a group of OpenSim developers and Linden Lab® employees ran a session called “Open Software for Open Worlds.” One of the topics that came up was whether the OpenSim environments would be able to use Linden™ dollars. From a financial perspective, Second Life business owners wanting to set up in alternative environments would benefit from having one currency. In the same way that Europe now has the Euro as an across-the-board exchange medium, so some sort of common monetary unit across virtual environments would be valuable.

In the recent article The 4C’s of 3D’s, one of the suggested key factors for success in a virtual world is the ability to handle Commerce, which in turn requires a unit of currency. Second Life resident and businessman, IntLibber Brautigan, described money as Second Life’s “killer app,” the fundamental substrate on which a business can not only be built but thrive.

On the Linden Lab side, Rob Lanphier, the “Open Source Busybody,” said that he was unsure at this stage how porting the Linden into OpenSim worlds could be done. According to Lanphier, “We’re not going to pretend we know how to export that in a way that protects Second Life’s economy. I can’t project a timeline.”

This is something of a step back from comments made in a Reuter’s article in July by Linden VP Joe Miller:

“I could see Linden offering economic services, trading services, search services,” Miller said. Some OpenSim worlds may respect Second Life’s intellectual property protections and commerce functions. The Linden Dollar, with a years-long reputation of solid financial backing, may be positioned to become the gold standard of virtual currencies. (Reuters).

Knowing that the number of virtual environments is likely to get larger, it would be prudent for LL™ to take on the role of “international banker” and become more involved in providing a virtual banking system based on the Linden dollar. Experience in the real world suggests that there is a tendency for monetary systems to converge, not diverge, and the costs involved with having multiple currencies and concomitant exchange rates would have businesses wringing their hands.

But over on the OpenSim developer’s side, Adam Frisby said that he didn’t see money as being an essential in the early stages of a sim. “Money doesn’t belong in the core [OpenSim] product build.” Frisby is also the Director of Research for DeepThink Labs, a company that provides customized services to virtual worlds.

For private sims that are simply an extension of a real-world company, used for conferencing, testing, development and so forth, there is unlikely to be any need for a monetary exchange system. But in the world of public sims, attention to the needs of in-world commerce in terms of a domestic currency may be critical. Waiting, as Frisby suggested, to “ask again in six or nine months” may be de-motivating for current owners of virtual businesses. What they want to do is expand into new worlds and start making a return on investment as quickly as possible: If there is no means of realizing a ROI, why would they bother?


  1. Robbie Kiama says:

    October 4th, 2008at 1:15 pm(#)

    Great post, but I am wondering why Paypal wouldn’t be a good way of using existing currencies and creating commerce on these new OpenSim worlds???

  2. Sigmund Leominster says:

    October 6th, 2008at 2:02 pm(#)

    Good point, Robbie. You can already switch Linden(R) dollars into your PayPal account quite easily. To do this costs some money – I know Linden Lab and PayPal both take a cut – so someone in the OpenSim world would have to take on the task on making the link between the in-world currency and PayPal. I also wonder whether the reluctance to jump into currency transactions is simply because of the potential complexity. Although it appears simple to a resident to click “pay” and then get their stuff, I suspect there is a fair amount of “backroom work” going on to ensure accounts are debited and credited appropriately, goods are transferred, records are keep, and – when necessary – exchange rates are properly applied.

    If all these things can be addressed, then it should be no problem to have a “real” economy ;)

  3. Virtual world economy says:

    October 13th, 2008at 12:47 pm(#)

    It is essential to have an economy model for opensim words in order for them to be able to compete with other virtual worlds. No matter how you look at this each virtual world does have an in world payment system so that currency can be exchanged between avatars. Paypal is one way and the most obvious way to fund an avatar account but there are many other possible solutions such as echecks, bank wire transfers and so on. Opensim is looking to enable the economy model for the platform but wants everything to be secure before they release such a module. At the moment there is already an economy module present in Opensim so the groundworkd has been done already.