"A currency is a unit of exchange, facilitating the transfer of goods and services." - Wikipedia.

"'Fictional Currency' is used as game tokens and have no monetary value in and of themselves and as a result are not be taxable as income. In most cases a fictional currency constitutes a limited license right for use by account holders and is subject to the terms of each Fictional Currency provider. The World Stock Exchange supports the "Linden Currency" (Linden Dollar, LND$, L$, Lindens) and the "World Internet Currency" (WIC, WICS, W$)." - LukeConnell Vandeverre, Chairman and CEO, World Stock Exchange.

Vandeverre is right ... and wrong when he says "have no monetary value". You see, as long as he sticks to first party tokens (W$, in this case) he's right. We're just talking game tokens. However, any interaction with Linden Dollars (L$) or other currencies messes up the statement.

Here is the first of the economy posts I'll be making regularly. I'll be using US$ for all the units throughout.

You will notice small discrepancies in the money numbers I give you: there are errors in the queries that we use to generate these figures from the databases, probably small changes in time that affect the results in this fashion. The numbers are still useful and the errors are small. I'm rounding the numbers a bit to account for this.

• Yesterday transactions in SL amounted to $997,000 at an exchange rate of 269 L$:1US$.
• Lindex saw a total of $192,000 in transactions, with a low of $3482.60 at 1am and a high of $16.893.22 at 10am.
• About $600 was exchanged by market speculators, $142,000 in market buys and $47,000 in market sales. (This means about 3 times more money was shifted by people willing to wait a little for their money than people who needed the cash right now - market buys are the patient ones, market sells the impatient ones.)
• The new search tool makes finding a good mean price for land hard, but a random survey across the mainland suggests a mean price of around L$17/sqm is a fair estimate.

Zee Linden has pushed out a bundle of figures for us to chew on. It covers a broader range of figures than previously.

November's anomalous growth in premium accounts (30%), has stabilized to an average 16.5% per month so far this year, which is more in keeping with Second Life's normal premium account growth. Second Life's average user age continues to creep upwards, now up one year to 33.

Overall land area grew 22.8% in January, compared to 15.2% in the previous month, and Lindex activity continued to rise; by 28.5% through January.

I don't know quite what to say. You'd think this one would be a non-issue. You'd hope this one would be a non-issue, but apparently one of the Second Life media myths is as strong or stronger than ever. Let's not beat around the bush here:


If you hear otherwise, you've either misunderstood or are being misinformed.

Today, Zee Linden talked a bit about the Risk API. If you spend much time on secondlife.com, you'll have seen it appear in the sidebar more than once. You might have poked at it to find out what it was all about. Basically it's a system for monitoring account activity, conditions and funds transfers that indicates fraud. Why should you care? After all, you don't commit fraud.

Because Zee Linden says that griefers are using the Risk API as a form of techno-social judo to have the accounts of innocent people mass-suspended. In fact, it's even better than goo attacks. Zee's initial message is "Be smart, don't get scammed", but by the end, there's obviously no way to prevent it, since your consent is not required.

The new LindeX system of buying and selling Linden dollars went live yesterday.  A new section of statistics has been added to the website for SL. Everyone awaits with interest the effect of the changes on the economic stability of Second Life.