See this Fortune article which discusses Second Life and how Ms. Chung became a successful real estate developer there (thanks to our correspondent Malcolm for the tip). The lengthy comment section is particularly amusing, with many commenters showing a lack of understanding of the fundamentals of money and value, and a visceral disdain for virtual reality.
While I don't have time to visit Second Life, I wish I did. It seems like a tremendous outlet for people's creativity. Why shouldn't an island or skyscraper designed by Ms. Chung be worth some amount of "real" money? What exactly makes the $20 bill in your pocket valuable, except other people's willingness to exchange things for it?
Sure, there are problems with scarcity -- Linden Labs, the creator of Second Life, could flood the virtual world with copies of any object, or new real estate, but the Fed could also decide to increase the USD money supply as well. (Perhaps to inflate away our $1 trillion in obligations to China!) Among the comments you can find discussion of legal and financial issues: Should the IRS tax virtual profits? (certainly, if they are ever converted back into USD), Will Lloyds insure virtual homesteads? (why not? just compute the expected cost of such a policy and charge a big premium), Can I be sued for killing your avatar? (Unh... not if it's allowed by the rules!)
What I want to know is, when can we start having physics conferences and seminars in (the improved HD, 3D, holographic, immersive) Second Life, so I don't have to schlep around in economy class and deal with baggage screeners all the time? Note some companies already have Second Life offices for meetings and marketing purposes!
Podcast of talk by Linden Labs founder Philip Rosedale. Another, with their VP of product development.
