Wednesday, June 06, 2007

Second Life .

Second Life .
Andre Willers .
4 June 2007

See previous “Prodigies” I to V , “Dehydration” , Itarin2” , “The Religious Experience and Proximal rewards “etc .

Synopsis :
Second Life is an intuitive , three-dimensional environment where mini-personalities can be expressed . This enables the exploration of personality paths that literally cannot be done in First Life .

It is literally a New Frontier for all those suppressed potentialities that could not be expressed in the Old Country .

Note the analogue with America in the 1700 – 1900 ‘s .

A further advantage is that you can remain at home and emigrate as many avatars as you can handle .

Discussion :

Second Life is at the start of an exponential expansion . Whether it will be a short-term bubble (ie short time axis) or a much longer term bubble , or an unending inflation only time will tell .

What is sure , is that early users in the expansion phase cannot help but make money .

There has been a lot of talk of Second Life on the SA talk-radio shows
(like Radio 567 , 702 ) . Once it gets to this level , we are in the start of an inflation bubble .

This is driven by the new availability of affordable broadband in SA needed for the connection .

The Main Driver :

You can make profits , convertible to real-world money .

Why ?
Internal characteristics of Second Life .
Ownership rights are secured as well as in real life .
Property rights in Second Life have already made at least one woman a US $millionaire . Why would people be willing to pay a premium to a purely intellectual landscape which is potentially infinite ? Take a drive outside a city and contemplate the prairie or the karoo .
Getting in on the ground floor of the coming property boom would be almost like buying New York ground in 1780 .
Intellectual rights are the same as in the host country . But the developmental cost of commercial artists like couturiers , architects , landscapers , etc is a fraction of the real one . Indeed , having fifty different layouts cannot be done in Real Life , but is much cheaper in Second Life .
Tax . Ahem . Is a Second Life dollar taxfree ? There are numerous law firms in Second Life to advise you (at a fee , of course) . You know Second Life is serious when these arrive . When there is enough money around to pay for specialists that reduce costs . (This is true even at biological level : enzymes .)
Legitimacy : In Human societies this can be huge stumbling block . Taiwan , for instance , has literally $billions in surplus , yet it has no legitimacy . Vuanatu , which is about to disappear under the rising seas , is a legitimate nation . Go figure .

However , Second Life already has this legitimacy , as at least two countries (Sweden is one) have registered full Embassies .Many others are getting on the bandwagon as it is starting to roll . Second Life Passports will not be far off . Many Corporates already have full agencies .

Inverse Legitimacy : Avatars in Second Life become more famous , wealthier , etc than their real-life originators . This has already happened to a degree with celebrities like rock-stars .

A new state of existential anxiety .
If a part of you is more successful than you , what does it say about you or your society ?

Convertibility of Currency . The true test . Linde dollars are convertible at variable rate to US dollars (a true currency) .
Independance . At the present moment , Second Life is becoming a separate country under the control of Linden Laboratories . As they become more successful , pressure will grow to create a representative government . This will be interesting ! How will they allocate votes to a potentially infinity of avatars ? Remember , the system has a qualified franchise : nobody can get on unless they have access to broadband and is minimally computerate . Note that this problem has already been solved in the brain during waking stage , when one of the mini-personalities has to become aware .
See previous “Prodigies” I to V

Unions will be next , as well as the whole panoply of social systems characterizing human society .
Ho-Ho-Ho and another Ho !
Life Insurance . How do you insure an Avatar ?
This is a serious question . An insurable interest can exist , since the property vested in an avatar can be convertible to a real currency .
Calculating the qx(ie the probability of extinction within a time period) of somebody like Avatar 251 of Elvis Presley will be an interesting exercise , but possible . Hence , it will be done .

Insurance companies are faced with steadily decreasing profit margins because of medical knowledge . They can slice up the statistical population in increasing risk groups , but are not allowed use the knowledge . The politicians will force a subsidy from the low-risk group to the high-risk group , because of humanitarism .

But , this does not apply to avatars . The Insurance Company can charge what the market will bear . Very profitable . But , they will have to nimble and know what they are doing (ie competent ) . Like they were when they started .

Continuity :
One of the main functions of insurance is to smooth money-flow across discontinuities (like death) . It reassures creditors that they will be paid . A customer buying something on credit or with a long-term guarantee likes to have an earnest that the vendor Avatar is not going to disappear . A large policy on the Avatar (with a publicized equivalent) premium and policy will do this . Of course , Credit Card companies will take the lower-risk end of the market .

But there is an obscene amount of money to be made in the higher risk , individually tailored risk-environments .

An added advantage , is that everybody will treat it like Monopoly money at the start ,ie they will take higher risks than they would with “real” money . But convertibility means it is real money .

Asset Inflation .
See previous ”Wealth , Riches and Money .”

Surplus money (not wealth) has found an outlet from real assets like property , to virtual assets like Second Life property . The destruction of money in a virtual environment has the major benefit that only avatars are affected .

No widows and orphans are evicted . (Until avatars are defined as sentient)

This is a better steady-state system than the stock-market .

The short term effects (0-5 years) are that Second Life property values will get wildly inflated , then crash .


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