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Virtual lips and law enforcement

May 15, 2008 By

Two interesting but totally unrelated pieces of information:

1. For the academically inclined, the Virtually Blind blog has an excellent piece on virtual law enforcement with a link to the paper written by a Dutch Assistant Professor at the University of Leiden, Bart Schermer. It’s a fascinating read best summed up in Schermer’s own words:

From this article we may conclude that in order to combat cheating and crime in virtual worlds, ‘artificial police agents’ may be employed. As of yet, these systems are not very advanced and can be used mainly to assist human beings in governing virtual worlds. However, as we move closer to the vision of strong artificial intelligence, more advanced software agents may be employed to combat crime in virtual worlds. When these intelligent systems arrive we must ensure that the legal basis for their use is codified within the law of criminal procedure.

To date media coverage of law enforcement has been about controlling the spread of real-life legal issues in the virtual sphere. There’s a much wider view that needs to be taken including virtual world-specific legal issues.

2. The ability for an avatar’s mouth / lips to sync with their speech has been something sought for years and there’s some light on the horizon on the Second Life front. Massively’s Tateru Nino has been trawling Second Life’s horrific development database cum bug-tracker to discover lip sync is on the way. I’d be doubtful it’ll deliver anything particularly realistic but it’s at least a start.

Filed Under: General News Tagged With: ,

Linden Lab further clarify trademark policy

April 2, 2008 By

We mentoned last week that Linden Lab had launched a brand centre designed to clarify what’s acceptable use of trademarks like the Second Life logo. The response since has been forceful and arguably negative in the majority as the reality of needing to change domain names becomes apparent for some business people.

Today, Linden Lab have further clarified their policy and there’s certainly so sign of them resiling from their initial stance. One aspect that interests me revolves around what is appropriate use of the term ‘SL’:

3. Can I use SL with my product, domain or organization name?

Yes, under our special license to use “SL.” You can use “SL” with your own trademark. So, if you own the “Dell” trademark, you could call your presence in the Second Life world “Dell SL.”Or, you can use two common nouns with “SL.” For instance, SL Ballet is not ok (only one common noun) but SL Ballet Troup works. And SL China Portal is not ok (”China” is a proper noun), but SL Chinese Residents Association works. You need at least two common nouns so others don’t think you’re an “official” Second Life organization or website.”

Is it just me or is this taking things a little too far? Take our own original domain name: sloz.info – if we were still running this site under that domain it’d need to be changed within 90 days. It seems farcical to me. Say there was a blog called Sleaze that covered virtual sex (there’s an idea!) – would this meet the guidelines? I’m not certain – Linden Lab have certainly provided clarification of some aspects but i don’t believe clarity is anywhere near achieved.

Australian Second Life resident Shai Khalifa makes a pertinent comment on the Linden blog announcement: “So transitioning a web domain name – does that mean LL will compensate those who have to fork out real money for registration of a new name – and paying web developers and graphic designers to re-do work?? This after-the-horse-has-bolted approach is going to have a detrimental effect on a number of active and useful sites I’m sure.”

The whole issue isn’t a show-stopper but it’s certainly going to cause some friction in part of the Second Life community. What are your thoughts – are Linden Lab cutting off their nose to spite their face?

Update: New World Notes are running a poll on the issue.

Filed Under: General News Tagged With: , ,

World Stock Exchange communicates after lengthy hiatus

February 25, 2008 By

Controversial Australian Second Life resident LukeConnell Vandeverre (RL: Luke Connell) gave an update on the World Stock Exchange, which has been offline since January.

I wasn’t able to attend the live event due to its time although I was offered a preview over the weekend which I also wasn’t able to make. Nobody Fugazi from Your2ndPLace has a scathing critique of the information provided today: “this seemed like a monotone message of desperation with an Australian accent”.

I’m hoping to glean further information in coming days but it’s safe to say that WSE’s future is still far from assured.

Update: the Second Life Herald has also covered the announcement.

Filed Under: Australian News, Business Tagged With: , ,

Does Second Life need a Republic?

January 19, 2008 By

The Metaverse Republic is a new site that states its purpose clearly:

“The Metaverse Republic, currently work in progress, will be a legal system for Second Life, with real powers of enforcement originating in user-created tools, and a democratic parliament.

There are many disputes and potential disputes in Second Life that could benefit from formal resolution: disputes about broken agreements, land use, alleged griefing, extortion, etc. The Metaverse Republic aims to provide an effective and fair system for resolving such disputes.”

That’s one hell of a brief and it’s not an initiative likely to receive widespread support for two reason. First, there’ll be automatic scepticism toward one model of goverment put forward by one group. Secondly, apathy rules – a resounding majority of people in the real world find politics a boring, meaningless pastime with no direct relevance to their daily lives. This is unlikely to be any different in the virtual world context – our own reader survey conducted last year showed just that, a real lack of interest in the politics stories we run.

That said, such an experiment doesn’t deserve outright condemnation – at the very least it should be considered a useful experiment.

The Virtually Blind blog has an interesting discussion underway on the whole concept. What do you think – does Second Life need a government?

Filed Under: General News, Politics Tagged With: ,

World Stock Exchange to continue business

January 12, 2008 By

As promised earlier in the week, we managed to catch up with Australia-based CEO of Second Life’s World Stock Exchange (WSE), Luke Connell (Second Life: LukeConnell Vandeverre). I’ve interviewed him a couple of times and the stories always garner a lot of attention.

I need to preface this interview with some kudos for Luke Connell – I IM’d him without notice and he took part in the interview below. Nothing particularly laudable about that. What I found impressive was his agreement for an unedited transcript to appear. As we wrapped up he did ask for the interview to be used as background only, but when I reinforced my intention to publish in full, he agreed. The WSE rightly receives criticism for a lack of transparency in some of what it does but in this case some light has been shed on the thoughts of someone who’s a significant player in virtual world finance. It’s also worth having a listen to the audio announcement currently front and centre on the WSE website as it sets the context for the interview.

If you’d rather not read the whole thing, the main points were:

1. That the WSE is continuing with its current upgrade and intends on reopening as planned.
2. I spent quite a bit of time querying the whole fictional currency argument, to which Luke Connell repeatedly maintained the WSE is a purely fictional exchange. His argument essentially was that if people are investing in virtual stock markets or banks with a view to making real-life profits then there’s a fundamental issue in the way that service has been promoted.

Now for the transcript – the only changes are corrections of spelling:

[20:22] Lowell Cremorne: Hi Luke, happy new year. Was just interested in any comment you had to make on the Linden banking policy – have you got any further clarity from Linden on whether WSE is acceptable or not?

[20:23] LukeConnell Vandeverre: Hi, sure, www.wselive.com then turn your speakers on hehe

[20:30] Lowell Cremorne: thanks for that – have had a listen – is it fair to summarise WSE’s view that the new policy doesn’t affect WSE’s operations and that WSE will no longer offer ATM’s with interest

[20:31] LukeConnell Vandeverre: exactly
[20:31] LukeConnell Vandeverre: our WSE ATM will remain
[20:32] LukeConnell Vandeverre: we will no longer be paying interest on deposits from those ATMs

[20:32] Lowell Cremorne: and I know we’ve discussed this many times before but I notice you really emphasise the fictionality of the currencies being traded – can you explain how you intend on ever being profitable if you truly believe that WIC and Linden Dollars are fictional – i.e. I’m assuming you’d never cash out Lindens for US dollars as can occur on the Lindex?

[20:33] LukeConnell Vandeverre: it’s profitable in terms of fictional currency
[20:34] LukeConnell Vandeverre: The WSE has linden dollar and world internet currency profits only
[20:34] LukeConnell Vandeverre: therefore the virtual business does not deal in real currency
[20:35] LukeConnell Vandeverre: if the license to use those currencies were to be no longer exchangeable for real currency then there would be no real currency involved in the process of acquiring fictional currency

[20:36] Lowell Cremorne: but you know as well as I that setting up WSE would have utilised real world funds and therefore there’s a need for a return on investment – how can you possibly claim you’d never cash out Linden Dollars for US dollars?

[20:36] LukeConnell Vandeverre: setting up wse did not utilise real world funds, it was all done with linden dollars
[20:38] LukeConnell Vandeverre: i’m not saying i’ve never sold my licensed right ot use linden dollars, i’m saying that side of the business has nothing to do with the service I provide

[20:38] Lowell Cremorne: but you must have used real world money to buy the island WSE is now situated on?

[20:39] LukeConnell Vandeverre: yes that part is not WSE though, that is Hope Capital Island

[20:40] Lowell Cremorne: i’m not trying to catch you out on anything here – I’m just always fascinated at your absolute adherence to a view that the currency is totally fictional when the tax office, ASIC and pretty much anyone in the sector has the opposite view

[20:40] LukeConnell Vandeverre: they don’t have an opposite view
[20:40] LukeConnell Vandeverre: firstly ASIC made no official statement and neither has the tax department
[20:41] LukeConnell Vandeverre: ASIC is not involved because the WSE is not providing real life investment services or securities services
[20:42] LukeConnell Vandeverre: The ATO will only tax real life income from real currency

[20:42] Lowell Cremorne: ok let’s put this another way – if you were so convinced that the tax office and ASIC don’t have an opposite view then why the concern about ever admitting that the WIC or Linden Dollars traded on the WSE can be used to make real world profits?

[20:43] LukeConnell Vandeverre: what are you talking about
[20:43] LukeConnell Vandeverre: I think its just that there is confusion
[20:44] LukeConnell Vandeverre: What I am saying is this: the WSE and HCL make fictional currency profits

[20:44] Lowell Cremorne: There is definitely confusion – you maintain that everything you do is fictional in nature yet both yourself and anyone making profits from the WSE as an investor can cash out tomorrow in US dollars

[20:45] LukeConnell Vandeverre: the license to use that fictional currency can be sold for real currency just like any other product and then I can receive real currency, that is how the system works
[20:46] LukeConnell Vandeverre: sure you’re buying a right to use the fictional currency (game tokens) and the value of that right is based on an assigned exchange rate and the amount of fictional currency under control at the time the license is exchanged.
[20:47] LukeConnell Vandeverre: if you end up with more fictional currency (game tokens) and there are sufficient buyers for your licensed right to use the currency then you can sell your license
[20:47] LukeConnell Vandeverre: these are simply the terms and conditions that apply, much like an unlimited internet service provider says Unlimited however conditions apply
[20:48] LukeConnell Vandeverre: what is important here is not the license or the real currency exchange, it is how the service is being presented to the customers
[20:49] LukeConnell Vandeverre: We make it clear to our customers who use the services we provide that it is not real, holds no real value and it is not an investment and does not provide investment opportunities
[20:50] LukeConnell Vandeverre: that is being very candid, open and honest to our customers so that they can enjoy the service, and so that they do not claim that they were misled or tricked into thinking it was anything other than what we say it is

[20:50] Lowell Cremorne: well I’d argue it’s all equally important as most people who decide to invest Linden Dollars with you or anyone else tend to realise it equates to real life money they’ve spent – hence the latest Linden Lab policy on banking. I personally would be surprised if virtual stock exchanges don’t in future get a lot more regulation because there’s no more guarantee of keeping your money than the ATM’s that have just been banned

[20:51] LukeConnell Vandeverre: how?
[20:51] LukeConnell Vandeverre: they invested linden dollars in a game not a real market
[20:51] LukeConnell Vandeverre: it’s not a real investment
[20:52] LukeConnell Vandeverre: the only investment they made was when they paid the fictional currency provider for the licensed right to use that currrency knowing full well the terms of service of that currency provider

[20:52] Lowell Cremorne: Because if I invest $50 000 Lindens I automatically do the maths and realise that equates to X Australian dollars. Given entities like the WSE have no real regulation, there’s no reason you can’t close the WSE tomorrow and I lose my money

[20:52] LukeConnell Vandeverre: and buying fictional currency isn’t an investment it is purchasing game to participate in the fictional economy which is a feature of a product provided by linden lab

[20:53] Lowell Cremorne: which is not the way the majority of people tend to see their investment

[20:53] LukeConnell Vandeverre: No need to speculate on why Linden Lab released their policy other than to go by what they said were the reasons, virtual banks have resulted in the loss of linden dollars from residents in the virtual economy and that has a negative impact on the user experience in their virtual world

[20:54] Lowell Cremorne: Absolutely – so from the audio announcement on the site you’re supportive of that and I assume that if/when LL expand regulation to virtual stock exchanges you’ll be supportive of that?

[20:54] LukeConnell Vandeverre: Hang on, you keep saying invest 50,000 lindens? you mean to participate in the WSE?

[20:55] Lowell Cremorne: Yes – say I chose to invest $50 000 Lindens in purchasing shares via the WSE

[20:56] LukeConnell Vandeverre: If Linden Lab feel that fictional stock exchanges are no longer providing a positive impact and a unique service to residents participating in their virtual economy then they would likely release a new policy and the WSE would close, exactly

[20:57] Lowell Cremorne: Although it’d be nice if instead of a ban they proposed some transparency and regulatory mechanisms to protect potential investors – that’d assist both you and investors

[20:57] LukeConnell Vandeverre: Then by spending L$50,000 lindens on the WSE you would be well aware that the WSE makes it very clear it’s not real and not to be used as a real investment opportunity to make money and that if you do it, then you take it upon yourself to take the risk that you may or may not be able to acquire more linden dollars than you started with and that you may or may not be able to sell the license to use them on the currency exchange
[20:59] LukeConnell Vandeverre: there are no guarantees at all that there will be a buyer for your license to use the fictional currency you control but not own

[21:00] Lowell Cremorne: Of course – I was more interested in the fictionality argument but I think we’ve thrashed that one to death ;)

(I then thanked Luke for his time and stated a story would be run this evening etc)

[21:12] LukeConnell Vandeverre: you’re welcome, btw further to your previous article the Office of Fair Trading/Consumer Affairs/ACCC would only investigate an allegation of false or misleading conduct and the World Stock Exchange makes it very clear to the user that it is not real and we do not promote it as a real investment opportunity.

[21:12] Lowell Cremorne: no probs – will add that to the story
[21:12] Lowell Cremorne: bye

[21:12] LukeConnell Vandeverre: OK bye for now

What are your thoughts – do you invest in such exchanges as purely a fictional game playing exercise?

Update: Nobody Fugazi at Your2ndPlace.com is running a follow-up story with some interesting allegations.
Update 2: Tateru Nino at Massively has also elaborated on the story.
Update 3: Nobody Fugazi has an interview with Arbitrage Wise from WSE competitor SL Capital Exchange on the Linden banking policy.
Update 4: This post pretty much refutes the whole fictionality argument – fascinating reading.
Update 5: SLNN are querying whether there’s legal action underway against WSE.
Update 6: This blog post by a Senior Economist at the Joint Economic Committee, U.S. Congress poses some interesting questions about Linden Lab’s new policy on virtual banking.

Filed Under: Australian News, Business Tagged With: , ,

World Stock Exchange faces an uncertain future

January 9, 2008 By

After today’s arguably overdue intervention by Linden Lab in regard to virtual banking in Second Life, I dropped by the World Stock Exchange to see what was going on. There was only one other person wandering around and a very short notice from WSE about Linden Lab’s announcement.

wse-bankclosure.jpg

The notecard states:

“LL has introduced a new policy on banks. The FAQ says that stock exchanges “may” or “may not” be included in this policy. We are currently investigating how this new policy affects the WSE’s operations and we will update the market once there is more news.

WSE – Management”

The pivotal question is: if WSE is found to be part of the new ruling on virtual banking, how will investors on the exchange get their money back? And all criticisms of the WSE aside, expecting any financial institution to pay out to all investors at once is unfeasible.

Filed Under: Australian News, Business Tagged With: , ,

Virtual banking – Linden Lab intervenes

January 9, 2008 By

Linden Lab today announced that any virtual banking facilities offering interest on Linden dollars deposited would now be banned. Initial reaction from a significant number of residents falls into the ‘about time’ category but like the July 2007 gambling ban the impact on the Second Life economy will be enormous. I’d be surprised if any of the financial providers are able to refund residents’ investments in full which means this decision will have a direct financial impact of a large number of people.

From an Australian viewpoint, the World Stock Exchange will be severely impacted by the move as far as in-world activities – we’ll attempt to get some comment on that throughout the day.

The full announcement:

“Please read this if you operate, or have transferred L$ to, an in-world “bank” or financial company.

As of January 22, 2008, it will be prohibited to offer interest or any direct return on an investment (whether in L$ or other currency) from any object, such as an ATM, located in Second Life, without proof of an applicable government registration statement or financial institution charter. We’re implementing this policy after reviewing Resident complaints, banking activities, and the law, and we’re doing it to protect our Residents and the integrity of our economy.

Since the collapse of Ginko Financial in August 2007, Linden Lab has received complaints about several in-world “banks” defaulting on their promises. These banks often promise unusually high rates of L$ return, reaching 20, 40, or even 60 percent annualized.

Usually, we don’t step in the middle of Resident-to-Resident conduct – letting Residents decide how to act, live, or play in Second Life.

But these “banks” have brought unique and substantial risks to Second Life, and we feel it’s our duty to step in. Offering unsustainably high interest rates, they are in most cases doomed to collapse – leaving upset “depositors” with nothing to show for their investments. As these activities grow, they become more likely to lead to destabilization of the virtual economy. At least as important, the legal and regulatory framework of these non-chartered, unregistered banks is unclear, i.e., what their duties are when they offer “interest” or “investments.”

There is no workable alternative. The so-called banks are not operated, overseen or insured by Linden Lab, nor can we predict which will fail or when. And Linden Lab isn’t, and can’t start acting as, a banking regulator.

Some may argue that Residents who deposit L$ with these “banks” must know they’re assuming a big risk – the high interest rates promised aren’t guaranteed, and the banks aren’t overseen by Linden Lab or anyone else. That may be true. But for all of the other reasons we’ve set out above, we can’t let this activity continue.

Thus, as we did in the past with gambling, as of January 22, 2008 we will begin removing any virtual ATMs or other objects that facilitate the operation or facilitation of in-world “banking,” i.e., the offering of interest or a rate of return on L$ invested or deposited. We ask that between now and then, those who operate these “banks” settle up on any promises they have made to other Residents and, of course, honor valid withdrawals. After that date, we may sanction those who continue to offer these services with suspension, termination of accounts, and loss of land.

We will not apply this policy to companies who submit a registration statement, charter, or other applicable license from a governing regulatory authority, or who are merely conducting marketing or education, but not accepting payments.

You may report a violation of this policy through the Help/Report Abuse feature in your Second Life viewer, and follow the instructions given.”

What are your thoughts? Is this a long overdue intervention or an unwanted intrusion?

Filed Under: Australian News, Business Tagged With: , ,
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