New World Notes

Comparing the BTC Apple to the L$ Orange (Comment of the Week)

Reader Joey1058 has a fair point about my comparing the oranges of Linden Dollars to the apples of Bitcoin:

The US designated crypto as a commodity. So asking to use BTC as a currency is like asking to use gold and silver as an everyday currency again. The L$ is an inworld currency, and has been planned that way from the outset. Broadly speaking, Second Life holds it's own sovereignty, so exchanging Lindens for USD is like exchanging GBP for USD.

Both BTC and L$ require an exchange to convert to USD. Once converted, they get taxed. The difference in exchanges is that LindeX/Tilia do a full transaction disclosure to the Feds. Crypto exchanges do not. Which is why the Feds are attempting to regulate crypto. If you are not reporting your crypto cash-outs to the Feds, you are in violation of whatever rules the IRS deems to slap you with.

This is roughly right. Though overall, I'd still say L$ and BTC is a comparison of tangerines and oranges, i.e. citrus fruit with more overlap than apples:

Shock Web3 Stat: Way More People Still Buy Virtual Items in Second Life Than Buy NFTs on Coinbase & OpenSea -- Combined!

Shocking or hilarious (depending on your point of view) stat of the day from the sarcastically-named Web3 is Going Great blog:

[Though Coinbase] claimed to have 3 million users on its [NFT marketplace] waitlist, the public marketplace release has gone shockingly poorly given Coinbase's existing reputation. The platform has yet to see more than 200 transactions in a given day (compared to OpenSea, which regularly sees more than 100,000 transactions a day, or its smaller competitor LooksRare which sees more than 1,000 daily).

As I noted back in January, NFT sales compare quite poorly to virtual item purchases in Second Life, which hasn't been considered a "hot" platform in tech since at least 2010. But Second Life still attracts about 200,000 daily active users, and it's fair to estimate each of those users buy an average of 1-2 virtual items per day. (At a conservative guess; 3-5 per day is probably more accurate.) In other words, at least twice the daily sales than OpenSea, and 1000x more the NFT sales on Coinbase.

Somehow this reality hasn't registered with the many companies, brands, and celebrities involved in NFTs:

On its site Coinbase claims 65 million+ users, and is currently getting 47 million+ monthly visits, according to SimilarWeb. OpenSea gets even more visits: Nearly 78 million/month! Then there's all the promotion of NFTs by celebrities including Snoop Dogg, Grimes, Emily Ratajkowski, Eminem, Reese Witherspoon, Gwyneth Paltrow, Mila Kunis, and Paris Hilton. (Who cringe-ingly declared herself "Queen of the Metaverse".)

Despite all that attention, NFTs are attracting less actual sales than the platform known by most people as "Oh yeah, that thing from The Office, right?"

Metaverse Content Creators in Developing Nations Can Do Quite Well -- Once They Break Into the Market (Comment of the Week)

Great comment from a reader based in Brazil, expanding on my point (and that of a fellow Brazilian) about the difficulty for metaverse content creators in the developing world to succeed, due to high costs of entry:

It works the other way round too, the $ is very valuable and gets me a higher standard of living than using that dollar in the USA.

I can eat well, afford rent and my bills, all from Second Life content creation. Adobe prices their monthly subscriptions in the local currency too, but yes [avatar software creation tool] Marvelous Designer is very expensive compared to Adobe's monthly subs.

Reader "Reiille" from Mexico, echoes that point:

 1 USD is worth 20 pesos to us, which of course, if you earn that back in revenue, it can be a huge financial help. I myself have been trying to break into the market, but the investment to be made to put a new brand out there is more than I can afford, so it's been a slow burn. 

So while breaking into a relatively static market* like Second Life is difficult for creators in the developing world, once they do break in, they have a tremendous edge:

For Metaverse Creators in Developing Nations, Second Life's Costs to Entry Have Grown Too High (Comment of the Week)

Important comment from Brazil-based reader "Moanna", responding to my economics survey which suggests that the cost of entrance into the Second Life economy has become so high, it's difficult for newcomers to break in.

For people in developing nations like hers, those costs are far higher than what they'd be for creators based in the EU/North America. She breaks those expenses down in terms of Brazil's currency, the Real. (Currently valued at 20 cents USD per 1 Real.) 

I've been trying to learn because I want to enter this market.

To create something good, we spend on courses (I paid 600 Reals), programs (Avastar, Marvelous Designer, brushes, molds) and other things that need to be purchased (image services, tables, furniture, parts, equipment, all quoted in US dollars in Brazil). It's very difficult to find support...

I still analyze it from a different angle, because I'm Brazilian. My country has a very undervalued currency. So imagine that we have to pay 4.7 times more for a Linden Dollar... 

1,600 SL creators earn over USD $10,000/year from their virtual content and services. However, that's 3X more than what a Brazilian earning minimum wage in their country makes:

Surprising SL Economy Survey: While Most Creators Get a Better Revenue Split Than Competing Platforms, Most Pay Linden Lab a Lot

Of all the metaverse platforms active on the Internet today, Second Life by far offers the best overall revenue share to user creators on the platform. As a whole, the creator community makes about as much revenue from Second Life as the company itself, and 1,600 user creators earn over $10,000 a year -- a higher number than ROBLOX, even though ROBLOX has vastly more users.

Speaking of which, ROBLOX takes an eye-punching 70% cut of revenue from its creators, while recent entry Core boasted that its cut is only... 50%. By contrast, an SL creator could sell goods and services in the virtual world, and only pay the 5% fee for cashing out Linden Dollars into US dollars.

But the story of Second Life's economy is more complicated than that.

To get a clearer picture, I recently surveyed SL content creators on two questions: How much of their revenue is absorbed by Linden Lab through additional costs, for listing products on the web-based Marketplace, for renting virtual storefront land from Linden Lab, and so on -- and how that translated into real dollars.

Here's the results:

SL Content Creators: Last Chance to Take My Survey on Your Revenue Share With Linden Lab!

Click here to take by tomorrow Noon PT. (Use a laptop/desktop for best results.) Details published and discussed soon after!

Bring New Excitement to Ancient SL Locations With a Discovery & Exploration Game (Comment of the Week)

While Linden Lab has saved Tempura, we discussed how preservation does not guarantee survival. Reader "Nadeja", however, thinks Tempura has better than average prospects:

Tempura is arguably a special case. Visitors know they can meet someone always there, so the traffic has always remained high even without any event (25K today). It is also a romantic place with a nice atmosphere, but it has a good design that seem to encourage meeting and hanging out: it's spacious, there is a large tai-chi area where many people go, someone meet at the mediation circle, the bridge with a spot with sits (and divination) in the middle, and so on. Also a bunch of people at the entrance; but there are quieter spots here and there, for couples or to relax by your own, some even cute/funny such as the giant nest.

Different preserved places were meant for a different usage, they were interesting or fascinating, but left to themselves they died out. Svarga stopped working correctly. The SS Galaxy was also a mall, with rentals and DJs in the ballroom and the pool. After the preservation, the mall and the rentals were gone, obviously, as well as the DJs and dancing and clubbing. The traffic is about zero now.

What's the solution for sites that don't have as much native stability as Tempura? Nadeja has the glimmering of a great idea -- turn preserved SL sims into a grid-like game:

SL Content Creators: How much of your income does Linden Lab take?

With so much online conversation over hat's a fair revenue split between a metaverse platform and content creators on it -- thanks to Meta and its just-announced 47.5% cut for Horizon -- I'm curious what the share is for Second Life. It can be as little as the L$ cash-out processing fee, or as much as monthly tier to rent a whole private island (or several).

Two survey questions below. (Use a desktop/laptop for best performance.)
 

Endangered Second Life Sims Need Other Options Than Just Non-Profit Preservation (Comment of the Week)

While it's great that Linden Lab swooped in to save the much-loved private sim of Tempura, there are still concerns as to whether that's the best way to preserve great virtual locations. Echoing thoughts from her own blog, longtime reader Nodoka Hanamura reflects on some of the challenges, citing an SL community project inspired by New York's legendary Hotel Chelsea arts nexus. 

In real life, unlike in SL, cities do not exist within a vacuum. They rely on state and federal funding as well as local taxes and other things such as Occupational License fees (OLF) and other financial endeavors to survive. They also depend on regional and federal agencies and entities to do things such as maintain the power grid, build and maintain roads, establish and regulate infrastructure. To run a city in Second Life is a wholly independent endeavor, which is offered little to no support by Linden Lab. Now, some will point to the SL Region Preservation Society, or SLRPS, but the reality is that SLRPS does not support infrastructure in Second Life in any capacity outside of the protection of historically important properties.

Which brings us to Second Life's Chelsea Hotel project:

The Challenge of Saving Beloved But Financially Unsustainable Virtual Places

Tempura, the popular and much-loved Second Life island, is now gone from the grid, with only screenshots and video to remember it by, another victim of SL's high monthly server maintenance fees. As when any other beloved virtual place meets a digital death like this, community members post well-meaning if belated ideas on how to save it:

Could these amazing regions be resurrected in OpenSim (Kitely)? Seems such a shame to lose them altogether. --  Kaylee West

Hypergrid and OpenSims are using SL's open source software and are in most cases entirely free. SL has the largest infrastructure but its been killing creativity and beauty in the name of profit for over a decade. Tempura can exist at no cost or $5 a month really. -- Domino Effect 

OpenSim definitely is an option! The first challenge there is, the original owner/creator would have to expedite that process, and be prepared to see their works "ripped" and copied by others for uses in other worlds -- content theft in OpenSim remains an ongoing problem. The other challenge is that OpenSim continues to have a small active userbase, with the top 10 OS grids attracting fewer than 20,000 active users. (Active users in the aforementioned Kitely: Fewer than 1300.) An OpenSim version of Tempura may not attract enough regular visitors to justify even a $5/month fee, especially when you add on the (presumably free) community management time.

Another option, as longtime SLer Saffia Widdershins writes, is plead for patronage from Linden Lab: