Good points from reader Erik Mondrian, on how Linden Dollars help drive the success of Bitcoin, and why L$ is still more often used than BTC to buy goods and services:
The other issue that I think is important to bring up in this context is exchange rate, which weighs the scale even further toward the Linden Dollar. Thanks to its rate remaining relatively stable, Residents can pretty much assume that 1 USD will be worth about 250 L$—now, tomorrow, next week, next month, and next year—an assumption that has a lot to do with the health of the Second Life economy and the willingness of people to accept and rely on Linden Dollars as a form of payment and stored value.
Contrast that stability with Bitcoin—its infamous fluctuations and the astronomical rise over the years in how many thousands upon thousands of US dollars you'd have to pay to get just 1 BTC—and it should be obvious why using the latter as a currency is ridiculous. It's much more like investing in the stock market and then hoping that enough other people will want to buy in that the value of your "asset" keeps going up. (And also hoping, of course, that a certain billionaire CEO doesn't tweet something that sends its value falling again.)
Seen in that light, comparing daily transactions is almost beside the point, since these two "virtual assets" represent entirely different expectations and mindsets. Bitcoin evangelists, like those cited in the article above, celebrate the so-called milestones of BTC reaching ever higher exchange rates and total amount invested. Meanwhile, in Second Life, we use the reliable ol' Linden Dollar to do what people tend to do in any society with a functioning currency: buy and sell goods and services (and pay our rent), trusting that the money we use to do that with will still be worth more or less what we gave or got for it the next time we're asked to open our wallets.
The key reason that Linden Dollars remain stable against the US dollar, versus Bitcoin?
Linden Lab the company effectively acts as the Linden Dollar's government, imposing restrictions on its use and controlling how much of it is minted into or withdrawn from the economy. Unable to do either -- or rather, designed not to do either -- Bitcoin is always a victim to wild external fluctuations, including (as Erik notes), Elon Musk mood swings.
Erik, by the way, wrote his whole CalArts MFA thesis on Second Life, so you can take his virtual currency opinion to the virtual bank.
When Bitcoin was new, I was mining on a desktop. I had accumulated at least 6 whole BTC. Back then there were dozens of exchanges that would swap fiat in any denomination for L$, or IMVU credits, or Gaia gold, WoW gold, etc. Early days. I personally considered the L$ to be more valuable than BTC (L$-0.004 compared to BTC-0.00000010 if I remember the price when I got in. Don't quote me.). An exchange I was relying on was VirWoX. I would buy L$ with BTC. When I finally sold the last of my whole BTC, I got $60. I thought I got a great deal for play money. Yes, I had my Pizza pie moment. I do try to shrug it off. FinCEN stepped in and wiped out the online game exchanges shortly afterwards. The point of this is that either nations or individuals using BTC as purchacing power aren't thinking too clearly as well. If you must use a crypto for purchases, at least use a stablecoin. Frankly, I could see the likes of the Linden dollar, or IMVU's VCoin, or even Entropia Online's PED being traded as stable crypto on mainstream exchanges like Coinbase.
Posted by: Joey1058 | Monday, June 21, 2021 at 04:56 PM
Yes but.....
Keep in mind that once we could gamble with L$ then one day the feds visited the LL offices and the next day we couldn't.
The lesson is, respectability means accepting a collar, and some people will not.
Posted by: Joe Guy | Monday, June 21, 2021 at 05:16 PM
For those living outside the US the Linden dollar fluctuates just as much as the US dollar and could not be considered stable any more than the US Dollar is. And with the recent takeover of LL is likely to become more circumscribed not less. The result for many of us non US players is that we either don't spend in SL or have moved to OpenSim muves.
Posted by: Johnnie | Monday, June 21, 2021 at 06:35 PM
"the Linden dollar fluctuates just as much as the US dollar"
You mean because many/most global currencies fluctuate in value related to the US dollar?
Posted by: Wagner James Au | Tuesday, June 22, 2021 at 09:57 AM
Every time someone talks up cryptocurrencies, I keep thinking back to the Ginko Bank debacle.
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Posted by: Andi Duferense | Friday, October 15, 2021 at 04:13 AM
A lot also has to do with the >2.1 million virtual products and services available to purchase with L$ through a single in-app SL Marketplacee. Bitcoin has more offerings - however they are spread across a slew of platforms that don't necessarily talk to one-another (except through the blockchain itself). On one end, you have Overstock with a formal interface - and on the other, you have the wild west of Local BTC or ummm, "darker" transactions.
Posted by: wuffy68 | Monday, November 08, 2021 at 05:03 PM