There has been some interesting discussion lately about the economy in Second Life.  For those of you who haven’t visited SL, Linden Labs has it’s own currency called Linden dollars, and each resident gets a stipend every week.  (Free accounts get $L50 and paid accounts get $L500.)  You can buy currency in world, or you can earn it by generating traffic to a site, selling goods that you’ve made, or by providing services. 

As cool as it is that LL has developed an economy out nothing, some problems are starting to appear.  Inflation is rampant in SL, as the LL are creating currency as people sign up as well as making payments for generating traffic.  As in the real word, creating money out of nothing leads to devaluation.  if you flood a market with currency and don't take any out of circulation, it is inevitable that inflation will be a problem.

There are quite a few people who are operating businesses in SL and the problem is that it is hard to cash out and make any money.  People are also experiencing raised rates and prices because of the devaluation of currency.

I simply don’t have the time to hangout in SL very much, but I am intrigued by the metaverse as it is developing here.  LL are dealing with social, economic and technological issues as the world grows and develops.

 I’m still waiting for a SL application for Palm OS so I can go in world over lunch.  I suspect it is a few years out though.