Did Anshe’s Anshe$ Strike Fear in the Wallets of LL?
by Alphaville Herald on 01/04/06 at 11:11 am
by Dow Jonas (with additional reporting by Walker Spaight)
Even before today’s suspension of Second Life land baron Anshe Chung’s account, SL forum-watchers had been riveted to a thread started by Anshe two days ago, entitled “Second Life Needs Stable Currency.”
In the thread, Anshe toys with the idea of releasing her own currency if Linden Lab does not take action to stabilize the Linden. Backed by “silver Euro,” the Anshe$ would be accepted it as payment in Anshe’s vast land empire, instead of Linden dollars. The Linden had sunk to the value of L$300/ US$1.00 yesterday, although the rate had recovered to L$295 by late last night. Anshe said that if it goes below $300, her business will face “insurmountable economic pressure to switch land sales, rentals and content sales to one more stable currency platform and offer the same opportunity to every other business in Second Life.”
Most SL businesspeople recall the value of the Linden regularly reaching as high as L$2.50/US$1.00 (US$4.25/L$1,000) last year on Gaming Open Market, an independent currency exchange operation which closed its doors last September after LL introduced its own currency exchange, the LindeX.
Although rallying from a slump brought on last fall by the introduction of point-to-point (p2p) teleportation, the Linden remains limp against the US dollars, causing thousands of content-creators and service-providers in the virtual economy either to hoard their Lindens or raise their prices and cash their income out quickly. A number of land-owners pay tier by allowing Lindens to accumulate in their account until they can exchange them for dollars; when their tier due dates hit it is common for the LindeX to spike.
SL’s economy has apparently grown at an astonishing rate, with a claimed 170,760 residents, of which 5,053 were online lastnight, with the day’s tally of transactions reaching US$380,771 — some eight times the norm of only six months ago, before p2p was introduced. Yet the influx of new residents and the high turnover hasn’t rescued the languishing Linden, say forums posters, because the Lindens continue to “print money” by delivering L$500 to every premium subscriber once a week. Calculating the value of an annual stipend payment (L$500 per week * 52 weeks == L$L$26,000) against the minimum cost of a premium account (US$72) puts the notional value of the Linden at L$361.11 per one US dollar (L$26,000 / US$72 == 361.11). But many accounts pay more than US$72 per years, so that value may be lower. Conversely, there are a large number of free accounts on the Grid that may be working to absorb currency and drive the value of the Linden up. In any case, many believe the Linden will fight its way to that L$361 value or worse unless the Lindens cut back on stipend “welfare.”
Dissenters claim that the stipend should remain to keep customer rentention, and say that the glut of land for sale on auction and in-world, as well as the failure of many vendors to raise prices, are more serious causes of inflation.
The forum thread, with more than 325 responses, is filled with personal and even racist attacks on the Chinese-German immigrant Anshe Chung, who has built a private island rentals empire in the virtual world that has dwarfed many of the Lindens’ own projects.
Spotted at a meeting yesterday that she hosted with Internet guru Howard Rheingold on a sim she has named for him, Anshe declined to comment on whether she was really prepared to release her own currency. But she has already begun exchanging Lindens for credits in IMVU, another Internet-based virtual world, and believes she has the financial might and programming power to create a viable cross-world exchange.
What’s interesting about the scheme is that it just could work. Though Anshe advertises her currency as being backed by “silver Euro,” it’s not actually necessary that a currency have any backing at all in order to fly. Most real-world currencies are not backed by any tangible goods anymore, but their value is set by broad agreement in the form of the billions (trillions?) of dollars of transactions that go on each day. The value of the Linden Dollar is set the same way, and there’s no reason the value of Anshe$, as she refers to them, couldn’t reach a comparable level, were it to be adopted by sufficient numbers of people.
The other interesting features about Anshe$, and the place Anshe’s scheme diverges from the Lindens, is that they would be able to be used on “any other platform accessible via XML-RPC,” according to Anshe. In that there could be the seeds of a broadly accepted virtual currency the likes of which we’ve not seen before.
SL’s businesspeople have put a number of relentless questions to the self-proclaimed “Business Girl” about the authority under which she will offer the currency; what float she will maintain; what regulations she will observe and which transparency practices she will follow. These are the sort of questions few people have answers about even regarding the LindX itself, and the Lindens’ own plans remain murky.
In an indirect response to the firestorm over Anshe’s announcement, LL CEO Philip Rosedale (aka Philip Linden) commented on the forums that he felt the economy was doing fine and the rapidity of the changes in currency rates were tolerable, “In the last 5 months or so, the Lindex has moved about 20 percent in terms of the exchange rate. Most world currency markets move less than that, but not tremendously less,” he said.
Bob the Tomato
Apr 1st, 2006
Anshe needs Linden Labs (and SL) because with no SL, there’s no opportunity for profit.
LL does not need Anshe, because there are plenty of other people who would be happy to have the opportunity to work hard and make big in-world yet with her sheer size are simply unable to acheive anything.
Whilst perhaps there can be sympathy for the residents of Dreamland… perhaps ‘the dream’ is over?
Bob
Szentasha Salome
Apr 1st, 2006
Does anyone here actually believe that Anshe is crazy enough to start her own currency? If Anshe were to create a competing currency that was more or less stable, and required her renters to pay rent in that currency and the L$ continues to decrease in value, she would have to lower her rents to compete with other rental property based on the Linden. Her currency would be stable, but her revenue would rise and fall over time with the L$. What is to gain?
Angel
Apr 1st, 2006
Virtual economies are perhaps one of the signs we are entering the point where the technological singularity or the internet singularity. (Ghost in the Shell: generic Cyberpunk).
I like to think this is a good idea. The USD is in MOST areas the standard of currencyt, although some european countries are comparing their economic strength to the Euro.
This is the same, a single comparason currenccy that will make gathering wealth easier. I think also LL is perhaps acting like old computer geeks: using a virtual economy as a infinte way to bolster their membership. This is a HUGE MISTAKE. If I was the USDotT I’d FORCE LL to take on some REAL experts (not that the ‘experts’ are experts. hell… can we get Alan Greenspan to help these geeks? Just asking…)
So this is a lesson in the REAL WORLD ECONOMICS! Now.. I will say that thsi is a good idea for stability, although she must take in the questiosn of a department of the treasury or a national bank ON HER OWN. Just keep those last two thoughts in mind when dreaming of a virtual economy (which I will say most first/second world countries almost have already.)
So to 250 or 200:1 being low.. I think not. but the LindX needs to improve.
Kelly
Apr 1st, 2006
http://secondsightofsl.blogspot.com/
Angel
Apr 2nd, 2006
Can I point out whoever you are that claiming somebodies reply is NOT a good ideA? The thoughts and opinions expressed above do not belong to the blog posted.
Angel
Apr 2nd, 2006
I think that Anshee should start demanding her currency be used in game and perhaps even make a third ware app to mod SL so it will read off how much of her currency is there. (That or a in game app to be used of virtual screens. And hope LL doesn’t delete it.)
Also because this will be ‘cross game’ I wonder if she realizes that momentously STUPID problems that creates. (And what server farm she’ has in her basement to take note of who has Strange idea #1.. team up with Google if she’s has a partial success in this operation. I can see it now: The Anshee$ is now called the Googlpi.)
If she keeps volume low and makes it’s worthwhile, she might be able to make something of her currency.
About the company she had making profit, then perhaps she should consider it as only needed for special services nobody else can offer, like the cross world services.
Meh.. I’m rambling about things I’m sure you’ve heard from other sites. I’m tempted to call Kramer or other money nerds in here….
New ideas: Corrective measures should be taken. my idea for this is as follows(is LL listening?)
A) STOP GIVING NEWBIES 5k! this is vital.. give newbies 400 hundred or maybe even make them work for the first currency units. (Assuming this is a non dividable currency like the yen(
2) Make the current players realize that this is good for them and no fortunes are lost.
3) Make cheaper housing in the long run, put a stop in the market of virtual economies. make cheap LL funded housing. *hey! It’s not like your BUILDING REAL housing.. just programming in new housing and saying your building it.) Remember, this is NOT real life. It’s is computer simulated things.
Might be a good idea) Teaming up with a few companies to provide REAL WORLD things using the LindX currency. Provide spending options other than ‘convert into USD then spend’. Thsis with make HARD GOODS part of your economy.
VTOR - Virtual TO Reality
Apr 2nd, 2006
Anshe$ vs. $Linden someday?
Some April 1st drama in Second Life that appeared to be anything but an April Fools joke. The land baroness Anshe Chung, toted as Second Lifes richest resident, was temporarily suspended allegedly for being in arrears on tier fees to Linden L…
Someone
Apr 4th, 2006
Don’t be so quick to conjecture a conspiracy by L.L. Keep in mind that Chung would not be talking about making her own currency if she was doing “just fine” with the L$. In other words, if she weren’t having economic “issues,” then she wouldn’t be complaining about the L$; and when people have economic issues is when their accounts would tend to go into arrears, am I right?
Further, it seems ridiculous to me that someone could create a “stable” currency, since quite frankly, there is no such thing. I think that if she tried to do this, she would come up against the harsh forces of economics. What would happen to Chung if one day, everyone decided to stop using her currency? How would people convert it back to real money? What if everyone converted it back to real money at the same time and switched back to the L$? How would she control how many A$ there were in the world, and how would she avoid the forces of inflation as the numbers of A$ rose higher and higher?
I can understand how someone would be frustrated by the market value of the L$ falling if they had LOTS of money tied up in L$. If you have $100k USD as 29,000,000 L$ at 295L/USD, and then the value falls to 300L/USD, then you just lost $1,666.66 USD, or 500,000 L$!!! That’s enough to make me sweat, just thinking about it! So I can see where Chung is coming from.
Since Mar. 5, it went from 280L/USD. In that case we’d be talking about not $1,666.66 but $6,666.66!!! That’s basically 2,000,000 L$ (at 300L/USD) lost. That’s about three months’ salary for a person like me, IRL, although in China or many other countries it’s a good yearly wage!
Whether or not Linden Labs is profiting off the fact that their currency is falling, at the expense of those like Chung, you can’t feel too sorry for anyone who makes their living playing A COMPUTER GAME in a currency that doesn’t even fall under income tax laws… seems like the price of a shrinking L$ may be the price you pay to make your living from playing a computer game.
That said, one can certainly understand Chung’s position, and why a stable currency would be valuable to someone like her. Unfortunately she may be learning the hard way that you don’t bite the hand that feeds you, even when it is perhaps taking some money out of your pocket.
Just my thoughts on the matter…
- Anonymous SL N0oB
Nikolai Malthus
May 4th, 2006
I just think back to the Episode of Family Guy where Peter secedes from the United States and makes his own country. That was at least funny. The fallout of this idea will just be plain ugly, because her little money maker is on Linden Labs’ servers and for all intents and purposes is their property. A slum lord, no matter how pretty or low-maintainence the slum, is different from the dress maker, the weaponsmith, the animator, or the scripter. In the latter My sword is my intellectual property, if I sell it to someone then it is still an asset that can’t be taken away except in the case of an act of God, or in this case Linden. In the former, you’re not really creating a damn thing, you’re profiting off of an investment that you have made. There’s no intellectual property to be had there unless you designed all of the houses on those pieces of land that you have invested in, and in that instance, if the land is taken away from you then you’ve got a buttload of digital houses and no place to put them.
Let’s say you lived on US soil and you decided you wanted to pay your property taxes in WonkoBuxx, a currency you printed that is based off of the large sum of Silver in your basement, because you don’t trust the US Dollar. They would:
A)Laugh themselves sick
B)Appropriate your land, the silver, the house, the dog who just crapped in your yard and then sell them at pennies on the dollar to make up the amount you owe them in property taxes because you chose to hand them a wad of WonkoBuxx, even though you say that those WB’s are backed by the silver that they have just recently appropriated.
C)If there is any left (and it’s a big if), give that remainder back to you in US Dollars and allow you to take it to any exchange you choose from then on to put it in the currency of your choice, which will then screw you for an exchange fee.
I’m starting to ramble, unfortunately, and I hate that… But I look at SL as a really nifty opportunity. A place that is actually pretty libertarian where I can make, do, and go whatever, whenever and wherever I wish to so long as I do not impinge upon the rights of other people that I have to live with. We have a body more powerful than us that pretty much sits around making our lives easier and only really ever drops the hammer when someone is making it difficult or nearly impossible for the main body to enjoy their freedoms. Just like a real economy, they have to worry about things like inflation, even more so because avatars don’t need to eat, have comfy beds for their herniated disc and wipe their asses with digital toilet paper. The real economy keeps itself in check by having supply and demand based on things we need combined with luxuries we want, a digital economy like this is strictly about luxury. Frankly I’m impressed that the Linden is as good as it is, considering everything you create yourself is either free or has a minimal fee because of the images you choose to import, and everything you buy is a luxury that you’re willing to drop money on because you didn’t think of it first. Also since it is a digital currency that just happens to be tradeworthy for real money, if it was actually capable of competing with a real currency then one if not several governments would be expected to step in and deal with it. That’s just my 2 zoologs, however, but those are also fictional currency…
Nikolai Malthus – Professional Drifter
anoobie
Sep 10th, 2006
Its cool to want to have the linden be backed by something, but then it would be more solid than the darn dollar which is backed by thin air,
if she wants to make her own currency, cool but this is a game, all this economics crap takes the fun out of it, first land vultures circling over nubies in flat green sims.
Her prices on the mainland are laughable, she has to police plenty of islands how can she even be having fun anymore?
She can tie her currency to anything she wants but she may be tanking because people dont want to buy her land, i dont play SL for its economic fun, i dont buy land with her stamp on it because i dont like to support the squishing of something i enjoy.
the linden dude owns the game, not her and any time they feel like it they can put a cap on how much land any one person can own. If she wants to start her own game so she can have her own little pyramid scheme, cool, then she can leave everybody in peace.
//METAVER.SE
Nov 11th, 2006
Anshe Chung Studios, Ltd.: 3oo sims+, so far
Well, if theres one avatars name that became truly famous in second and real life, its Anshe Chungs: The Anshe Chung Studios, Ltd. [SLurl], founded by her and her husband Guni Greenstein, is the 800 lb. gorilla of th…
Mystyc
Apr 14th, 2007
To be honest, I’m glad she got suspended. She’s wholely unethical, an idea thief and a monopolizer. She’s on another 3-d chat where the developers are single individuals trying to eke out a sort of living off of their products and her multi-million dollar conglomerate has a nasty habit of stealing ideas, over-charging her products and getting people banned when they second guess her viewpoints. Anshe Chung deserves that and more one getting her account suspended. Remember, I don’t think the german woman posing as a chinese woman is even making the stuff. She has a staff of 10 working on products just for the 3-d chat program I mentioned earlier. I’m curious how many she had enlisted for SL. She has a staff of 30 working on these chat programs.
IMVUdeveloper
Jun 13th, 2007
Anshe got her Pro developer status suspended today at IMVU.com for exploiting a known bug to drastically lower the prices on her derivable products that others paid her to derive from and sell, thus undercutting them all.
She has been able to do things in the past that would get other developers suspended or disabled entirely. It is great to see IMVU finally holding her responsible to their terms of service.
A
PostChick
Jun 15th, 2007
Anshe did not have prior knowledge of the bug and lowering her prices did not harm the people who derived from her, as they only needed to lower their prices in turn. IMVU staff themselves admit that she did not engage in a bug exploit. I heared the reason her Pro developer status was suspended was her inability to restore the original prices fast enough. She states a slow network connection from China and lack of records with the old prices as a reason why it took her several days to go through 1500 products one by one.
IMVUDev2
Jun 22nd, 2007
The company ACS knowingly exploited the bug. Once a product is derived from, it’s supposed to lock and yet they didn’t. Every other dev never tinkered with it and yet she did. She’s reported to have broken the ToS many times over, has her assistant speak for her, is very non-competitive and copies everything that’s made that will be a huge seller. Do you know how many devs got ripped off by her copying furniture and poses?
IMVU offered to help her out with changing the prices and reimbursements. Also realize that a few devs got disabled for far less than that company has done. She’s a business woman and should know better. Even if someone does not read the tos, they are still expected to adhere to it and she did not. That’s no one’s fault but her own.
Many people are disgusted by the outcome of what happened. Many people would like to see her gone. I, for one.
I also don’t get the lack of records bullcrap. Any SOLID business person would keep record of EVERYTHING. That is purely irresponsible on her part. I’m glad she’s not my boss. I’d've quit a long time ago.
Time to grow up anshe and face the facts, you’re all washed up.