The Bankwatch

Tracking the consumer evolution of financial services

Second Life | can it be a test bed for real life?

An interesting bit of research on virtual worlds and using them to model the real world.  Real people were using virtual money bought with real money to participate in a banking scenario within Second Life.  The outcome was a banking crisis that could have offerred lessons to the real world.

Click through to msnbc for their research and analysis.

Second Life bank crash foretold financial crisis | msnbc

The end came when panicked investors began withdrawing their virtual money, known as Linden dollars in the game and exchangeable for U.S. dollars at a rate of roughly 250 Linden dollars to one U.S. dollar. Ginko did not have enough reserves to pay up. When the bank finally announced it was finished, an equivalent of $750,000 in real-world U.S. dollars went up in smoke. The collapse not only wiped out time spent earning Linden dollars in the game, but also hit the wallets of players who had legally paid U.S. dollars to buy Linden dollars.

Written by Colin Henderson

November 22, 2008 at 01:10

Posted in Innovation

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