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TR: While your model is built around people building in-world content, such as airplanes and furniture, some residents have also built financial institutions, such as stock exchanges and banks. Recently, there was a run on Ginko Financial, one of these virtual banks. What do you think about this?

JZ: There’s really no purpose for a bank in Second Life. The fact is, Linden Lab is the bank. We’ll hold your Linden dollars for you, and we’ll keep them secure. We’re obviously not giving you an interest rate on them, because there’s no way to earn an interest rate from them. If they’re offering a high interest rate, then it’s too good to be true. I would warn our residents against doing speculative things like that because they’re risky. I don’t know, but there could be fraudulent activity going on there. If we became aware of it, we’d shut it down.

TR: Linden Lab recently shut down the Second Life gambling industry. How has this affected the in-world economy?

JZ: We’ve always restricted illegal activity in Second Life, and now we’ve specifically called out gambling. I think gambling might have been 10 or 15 percent of the economy, so there is probably an overhang of economic activity that’s no longer happening. Last month, we sold L$159 million on the exchange. We haven’t sold very much at all yet on the exchange in August. I think it’s got to work its way through the system. In terms of it affecting other aspects of the economy, so long as the exchange rate stays stable–and so far it has–it shouldn’t affect other parts of the economy.

TR: I’ve heard that some casino owners were upset about the loss of their businesses. What do you think of this?

JZ: They shouldn’t have been operating casinos because they’re illegal in the real world, and they’re illegal in Second Life. If people are operating illegal businesses in Second Life, they’ll eventually get shut down. If people are operating legitimate businesses, then just like I hitch my fate to the success of Linden Lab, so do they.

TR: What’s the nature of the property people hold within Second Life?

JZ: When we say “land,” it sounds like property, but it’s not physical property. It’s intellectual property. People don’t have property rights in Second Life because there isn’t any property.

TR: What about the emotional value of these words? Even if the land is virtual, don’t people get attached because it’s called “land”?

JZ: I think virtual worlds can have a very emotional impact on people. The more time I spend in Second Life, the more I view my office space in Second Life as a real place. In that way, Second Life is having a profound impact on how people think and how people feel. The fact that it can seem so real to people is exactly what makes me most excited about working here.

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Credit: Linden Lab

Tagged: Business, social networking, Second Life, financial systems, Linden Lab

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