Comments on: Death and taxes in virtual worlds

The taxman is coming to your virtual world. Hide your real wallet.

[Lawson English]

I've been involved in Second LIfe for about 18 months now. I had played WoW and EverQuest and EverQuest II, etc, for years before starting Second LIfe, so I'd like to think I can speak as someone experienced at all three.

What you miss about virtual money in Second LIfe vs virtual money in WoW and other games is that there ARE tangible investments in creativity and skill required to create things in Second Life that can translate into real life skills. While it is true that EQ or WoW experience as a guild or raid leader can be counted as a plus on a resume, it is very rare. On the other hand, the ability to create artwork, or scripted objects in Second LIfe, can lead to real life jobs in related real life industries based directly on your "in world" abilities. Certainly, as a EQ Shaman, I never was offered a real life job as a chemist based on my potion-making skills. However, as a scriptor, I *DO* get paid real money for scripting in Second LIfe, and have been offered real life programming jobs based on my reputation in Second Life.

Now, the in-world items are an interesting thing. They are paid for using Linden Dollars which can't be spent any other way unless you "cash out" your money and exchange L$ for real $$.

However, some people are talented enough in what they do in-world that they can cash out enough money every month to make a real life living. Some make a *reasonable* living working in-world, although likely nowhere as much as they would if they applied their talents in real life rather than Second LIfe--but it is more fun to design clothing for cartoonish avatars than to compete in the real world fashion industry, for example, and you can be far more creative while doing it. I have seen truly innovative avatar "costumes" designed to make the avatar look like a koi-like merman who swims through the air, rather than walks on the ground. Weapons design is a thriving industry in SL, as are virtual reality sex toys and animations related to either/both(?) fields.

All of this leads us to your final point: what happens if a companyy goes out of business? Linden Lab is working with companies like IBM, open source organizations like OpenSim, OpenMV and realXtend, as well as independent programmers, to devise a system whereby avatars can travel from one virtual world to the next and take a subset (at least) of their virtual property and appearance with them. The goal is to create a 3D "metaverse" analogous to the internet where people can retain a virtual identity regardless of which world they visit. Once that happens, the value of "virtual property" may become diluted by the access to the larger virtual universe, but the potential number of customers for virtual products and services will grow at least as fast as the value of items shrinks.

The records of many discussions on this topic (140+ at last count) are available online, and the above-mentioned groups and organizations maintain a presence in IRC< web forums, etc., so you can see for yourself what is going on in the arena of "interoperability" between virtual worlds.

Consult these wiki pages for more info:

http://wiki.secondlife.com/wiki/AW_Groupies

http://wiki.secondlife.com/wiki/Category:Grid_Interoperability_Chat_Logs

http://wiki.secondlife.com/wiki/AW_Groupies#External_Resources

Cheers.

[kcotham]

Is it "to hard to fathom" or "too hard to fathom"? Watch out for that spell check there!

[daverosenberg]

It was a typo--I fixed it

[aka_tripleB]

Can I pay all my taxes in gold I collect in WoW?

[FWord_Utorid]

People use regulated currency as a means of trade because it is convenient and lightweight, and has a generally accepted theory of value.

In theory, it has a fundamental value, because there is an organizational control of the amount of it in circulation. This control in terms of cash is limited by the amount of printed paper. In terms of credit, it is controlled by financial institutions, which we are subjected to believe issue limited amounts of credit.

The truth of the matter is: virtual currencies have no such limitations and controls. There is no centralized issuing authority. The accountability of such wealth is entirely variable, and the potential to create new 'products' from no materials whatsoever save time, talent, and imagination, creates a new value proposition on a level Ben Franklin likely never considered.

Short of total over the shoulder invasion of privacy, there is limited means by which governments can measure the trade of these forms of commodities. Overly intrusive government will simply lead to more forms of trade outside of the normally monitored chain.

In effect, we have a new form of virus which is now linked to the economic system in much the same way virii become linked to computer systems. The long term impact of such mechanisms, where economies are created freely and consist more of ideological elements rather than tangible goods, lends one to wonder if the old cliche of death and taxes being guaranteed remain constant.

http://www.imminst.org/ - the immortality institute

http://www.youtube.com/watch?v=7yeA7a0uS3A&feature=related - critical viewing material for the masses

[Len Bullard]

Treating virtual currency as if it were real is described in the same language that led to the poisonous leveraging situation that is driving real world economies to ruin. But Obama is appointing people who will tell you this is different because this is the web and the web is always... well ... different.

The irony is this is one time in the last two decades when it is a good thing to work for Microsoft which preserves its blazingly discomfiting but pragmatic culture of making real money for real work by selling real products with tangible value.

As to taxing the incomes of those who build these, certainly do that every time they cash in their Linden dollars.

[zgreenwell]

The ToS state that all items in the game are property of the publisher. So no matter how much gold a player manages to rake in they haven't gained anything and thereby can not be taxed on it.

[Earl Benzar]

> Besides, what happens if the game company goes out of business? It's not like you get to take
> your special sword to the Sponge Bob game if WoW suddely disappears.

Second Life should be viewed not as a game, but as a platform for content developers. The in world currency is for convenience. As for the red herring about going out of business, developers understand the risk. As for taxes, if I make money in Second Life and I withdraw it to my business account, I pay taxes on the income as do most developers. I fail to see what the issue is here or what might be your underlying agenda.

[daverosenberg]

No agenda here, just trying to understand the issues.

[Len Bullard]

"Second Life should be viewed not as a game, but as a platform for content developers."

Ok. Microsoft should not be viewed as a software developer but as a platform for content developers. That means given the current market of Microsoft, there is no need for PDF or ODF.

Cluetrain: If you develop content for a closed platform that does not have a standard means to export content, you or your customer are dumb. The word is "dumb". Look it up if you don't get that meaning.

The virtual worlds industry is the only content type that has few standards for import and export of content and for the most part, ignores the ones that exist. To develop for such platforms as Second Life, the smart developer doesn't use the platform tools, they use alternatives such as Maya or even the Vivaty editor that can save into different formats.

So your description of Second Life as a 'content development platform' is not a red herring: it is misleading and anyone who buys it is 'dumb'.

[Lawson English]

Len, the protocols to export items from SL to other virtual worlds are being defined. However, the legal/social issues are far more complicated. Example: the content creator owns the intellectual property right to the content they created in Second Life. They may have sold [licensed] the right to "rez" a piece of art in a SL world to some other avatar, but only in Second Life, not on some other world. How do you track the IP rights on the other world? How does LL get compensated for becoming the asset server to the universe? What kind of "permissions" system should be set up for inter-world creators? Should there be a forwards compatible mode for existing content, or only for new content? And what about avatar appearance as opposed to avatar possessions? Many SL avatars are heavily scripted works of art. How do you allow a SL avatar to visit another world without violating the licensing TOS for the original creator of that avatar? How do you handle cross-world sales/money/currency?

There are ways (they think) but the technical details need to be ironed out. More importantly, new licensing agreements *between* worlds have to be set up, and accommodations made for different kinds of licenses (or for no license at all).

It ain't an easy thing to resolve, but we in the Architecture Working Gorup have been arguing about these issues for over a year now and every point you think is new has been examined 20 different ways, at least. There's 140+ online chat-logs on these issues available for your review if you are seriously interested in these issues and how they might be resolved. Suggest you do a little reading and if you come up with a new angle or a better solution, join the AWG and attend meetings in-world.:

http://wiki.secondlife.com/wiki/Category:Grid_Interoperability_Chat_Logs