Economy - lickx/opensim-lickx GitHub Wiki

This wiki entry is meant to make you form your own opinion about inworld currency, without giving advice at all. I myself don't really side for or against currency. I can see that at this moment it can't work for any opensim grid, but also see the usefulness once a big userbase is established.

You should also read this on the official OpenSim wiki.

What is money, and why is it useful

Money is the successor to the barter system. With barter we exchanged one good or service against another person's good or service. Often it was not possible to complete a deal because one party had no use for the good/service that the other person offered in return.

That's where money comes in. It is a temporary placeholder for a good or service. That way the seller of a good/service can exchange the money given by the buyer for a good/service that is of use to the seller. This deal can always succeed. But it only works, if money keeps changing owner.

When does money become evil?

Money becomes a problem, when people start to hoard it. Someone who has a lot of money, can buy himself anything: a political position, forbidden entry, sex, or even a hitman to kill an unwanted person.

Is monetary greed relevant to virtual worlds? No, not at all. Research by Bonniebots has shown that only the top 100 sellers on SL marketplace make a livable income out of selling virtual products. All those hundreds of thousands other sellers only made a few $ per month, supplementing their regular real job income with a bit extra. Unfortunately the data had to be taken down legally but I'm sure you can find some hot discussions about it by googling or on the SL forums.

So now you see why it doesn't make sense at all to call a virtual product creator a 'dirty greedy capitalist'. The capitalists are the big multinationals, not hobbyists who create to earn a bit extra, in order to meet the end of the month in already difficult times.

Systems available

Obsolete systems

  • OMC$ - Open Metaverse Currency module - handled by Virwox
  • V$ - Virtual bucks? - handled by ?

2 types of selling, both don't work in OpenSim.

  • High price, low volume - This won't work for digital assets as it scares away most prospective buyers. If a product is non-physical people are not willing to give much for it. Maybe the only exception would be a built-to-order custom made product.
  • Low price, high volume - This works in SL because they have a huge userbase with anywhere between 25000 and 45000 people logged in (depends on time of the day). The hypergrid (all OpenSim grids together) only has few active users (1000 users total at most).

As a merchant, ask yourself what is more gratifying: wait 5 years until you sold your virtual t-shirt to 3 opensim customers, netting you an equivalent grand total of USD 3,- (the price of a coffee or milkshake) OR within no time see 50 happy users of your product when you give it away for free.

I know of at least one merchant who is active in both OpenSim and SL; he only charges in SL, and gives his products away freely in OpenSim. This seems to be a nice middle ground. One advantage of this is you get proper credited for your work, it's on the object/item properties in the Creator: field.

So what could currency then be used for?

  • Land sales. This works fine with Gloebit and opensim.currency module.
  • Rental boxes. Several options exist for this, some open source.
  • Upload fees. This would be fair, considering the asset database only grows forever, never shrinks. Assets are forever, and grids need to upgrade storage volumes for those in time, as well as replace failing disks. Only one problem: you have 3000 competing grids, who ask no upload fees!
  • Tips. This works if the person being tipped is able to spend it on something or can cash out to fiat/crypto.

What system should I use?

  • I used to recommend Gloebit, but it seems to be dying. It took me 2 years and 8 emails to be granted cashout status (the ability to convert G$ to paypal). Support was slow and unresponsive. Anyone wanting to earn gloebit would have to request this 'status' and wait that long. Every transaction has commission fees: 2% goes to Gloebit Inc., and 1% goes to the sim/grid owner. So if you sell something for 100 G$, you receive netto 97 G$.
  • Your own currency backed by Podex looks more reasonable. They have have all the qualifications being a money processor. So far I haven't heard any complaints yet from grid owners. 2% of inworld transactions go to the grid owner. Podex itself makes their living out of fees on currency exchange (grid to other grid currency), and currency payout (to paypal).
  • You could run your own currency and handle all the legalese of an exchange yourself, but prepare to pay up for some long sessions with a lawyer! You'll have to conform to all sorts of laws because it makes you a money processor.
  • You could also run your own currency as a mere toy currency: meaning don't offer residents cashout to fiat/crypto. There is one well known grid who does this (buying currency is possible, selling for fiat/crypto is not). They offer the option for their residents to use their inworld balance towards region rentals.
  • Some people have experimented with crypto as inworld currency. I have yet to look into this, I don't know what kind of module is being used and if an API with an exchange is needed (meaning commission fees to the exchange!) or if a grid needs to run their own wallet.