Second Life Buries The Lede: It’s the Virtual Economy, Stupid

I haven’t been following the recent controversy over Linden Lab’s decision to change the terms of service (ToS) to prevent third-party virtual currency excnanges from selling (and more importantly, buying) Linden dollars (that’s $L to those of us inworld).

I do know that this change has caused a lot of agita for those fortunate or hard-working enough to have a successful inworld business; people who are great content creators can make a small trickle of real world cash, and people who are REALLLY great content creators (like several people recently profiled in the Drax Files videos) actually make their real-world income from making virtual trees, animations, and so on.

The problem that let to all the third-party exchanges in the first place was that LL has a cumbersome system for buying Lindens in your home currency, and an even more cumbersome and slow system for SELLING Lindens and turning it into US dollars, Euros, or whatever your local ducats are called. Once a transaction is completed, it can take days for the funds to hit your local bank account, and at every step of the way, LL takes a little percentage. You can’t just click a button on the website and request that an amount of LL gets put in your bank account as US dollars; you first have to convert it to a US dollar credit on the website, and then cash out from that to whatever entity – PayPal or your bank – you’ve set up. I’m actually not that clear on how it’s done, as I don’t have a very successful business (mostly because I don’t devote as much time to it as I should – it’s “play). I do know that turning $L into Euros or yen or kronor is a LOT harder and takes longer through the official Lindex, but was much quicker (though there were fees) to do it through one of the alternative exchanges, such as Podex, VirWox, or so on.

In today’s blog post, clarifying what has become a pretty turbid and murky stew, the emphasis is on a new “authorised reseller” kind of way to buy Lindens for cash – and how easy that will be once they get some resellers to request authorization through email (yeah, THAT’S SECURE). Only at the bottom does it address what many international Residents see is the big problem: it will still only be possible to SELL Linden Dollars through Linden Lab’s own Lindex currency exchange. And yes, it seems to be tied to some security and fraud prevention issues. At least they finally admitted that the cashout process takes an unacceptably long time, and make a vague promise to do something about it.

We successful and not so successful virtual shopkeepers hope they don’t hand off this task to the same team responsible for running the SL Marketplace, which has a poor reputation for transparency and responsiveness when there are problems. Just when the US (and it’s to be hoped, the world’s) economy is finally recovering, Linden Lab does its best to screw up the virtual economy and cause Residents to lose confidence in their ability to make a bit of cash from content creation.

Now, to give users more options and make it easier to purchase L$, we’re launching a pilot program of Authorized Resellers of L$. These sites are authorized by Linden Lab to purchase L$ on the LindeX and then resell those L$ using a variety of international currencies and payment methods. To be clear: per the Terms of Service, these resellers will not be allowed to purchase L$ outside of the LindeX (i.e. they will not be able to buy L$ back from users and cash people out). The list of Authorized Resellers participating in the pilot program is available here.

 If you would like to receive an application to the program when it formally launches, please send an email to

We know that users are also concerned about the length of the LindeX’s cashout process and the limited choice of currencies when selling L$. We’re currently investigating ways to improve that experience for users while still providing superior fraud protections, and hope to hasten the cashout process and offer new currency options in the future.


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