Currencies in OpenSim grids

I’m not an economist so I hope one will read this blog and correct the glaring deficiencies of my understanding. I’m also opposed to unrestrained capitalism. Please, any readers with the argumentative negativity of people like Prokofy Neva, please just go away now and stop reading. (As far as he’s concerned, he doesn’t like OpenSim, so why does he need to bother to talk about it so much? Just don’t go there, Prok: then nobody has to fight about it.) Gentle readers only past this point.

The feudal money printing that LL engages in is more than a little dodgy, we all know, but we put up with it because we realise it is a psychological inducement to some content creators, although in reality only a very few actually cover their costs, and even fewer actually profit. At any time, LL can take away your access to your content, despite promising that your rights over it remain – not that they defend them in any way from piracy unless forced by law. What kind of free market place is that? They can disallow a type of business at the moment it’s making money and profit from its demise.

OpenSim grids (not OpenSim itself, which is a server technology – don’t confuse the two) are generally socialist utopias from the economic point of view, where everything is given away. I suspect that those grids that are experimenting with money have a better understanding of the psychological need of people to have more than theoretical rights over their content but also a finer grained control than either (a) giving it away, or (b) not giving it away and waiting for the pirates who can come whatever you do. Ok, so there is crime – like RL, no? Live with it. Society still functions. Most people pay for stuff. People have different views about copying music. Who didn’t copy old magnetic tapes or record off the radio? Is music dead? It wasn’t then, but in the view of some, it may be now šŸ˜¦ Then again, it may be that time has left me standing on that one.

All the same, I think a balance between freebies and “economics” has been created in SL. To avoid the same feudal control and funny money that LL has got embroiled in, perhaps we could merely peg the OS$ at US$0.01? That way, you can’t have any confusion over exchange rates. Instead, you simply charge a percentage fee. Actually, think about it, it’s kind of like banking but more double-edged. In one way, you invest real money at real currency rates in a company who keep it for you, just like a bank. They use it for business, make a profit, then decide whether or not you deserve interest or just loads of bank fees ;-/ for the trouble of lending them your money. However, it’s also rather different because you can spend the tokens that you get, which kind of replace the receipt or bank statements saying how much you invested. That way, you transfer them to other people who can then then get the real money back instead of you. If you still have it, or in the unlikely event that you make any, you pay a fee for the right to get your own money back, which is again just like RL banking ;-/

Ok, so why would AcmeGrid or whoever want to open themselves up to this kind of risk? Clearly the central grid needs to enable the currency, though not run it. Presumaby the total amount of money in circulation would need to depend on how much certain banks invested in a central, not-for-profit trust account, preferably with an ethnical, risk-free portfolio. It would not have to be the same entity as the grid provider, only to have an agreement with that grid to operate there. They could reimburse investers whether inside or outside the grid – the grid merely provides an automated mechanism for as long as that currency is being used there. It could even transfer its operations to a different grid – if it didn’t mind all of its customers having no way to spend the money and unilaterally withdrawing it!

This way, there would be no more funny money, although it would not avoid banking scandals. But, hey, don’t we invest in banks all the time? This way, you just invest 100 times less. Bad investment = lesson learned. Anyway, most people only put in money that they are effectively spending on leisure pursuits that they can afford.

So, tell me, economists, why doesn’t this work? The price of an item in participating grids would simply be in a set fraction of the US$. If you like, follow the LL precedent and set it at 1/250 – the 1/100 idea was just to make it simpler. Of course, for people who don’t live in the US, it’s always going to need an exchange rate. But why do it twice, and why do it both in RL and across the RL-metaverse frontier? We need a bank to start this up. It could very quickly take over the currency, and I’d be surprised if LL wouldn’t want to outsource the L$ to the same bank, who do after all have the necessary experience. Is it really better to have a software company like LL running our money for us, or a similar copycat operation? Basically we are talking about an expanded “virtual wallet” – isn’t that exactly what PayPal already does? It works! This isn’t just a theory.

Actually, I don’t care about metaverse money, and I almost never make any. But I recognise that we need more people in OpenSim grids. I don’t want to keep wandering around in my virtual rags, so that I have to go back to SL every now and then to get my nice outfit back again. If those nice content creators can be persuaded, there will be stuff to buy and people will be able to look good, prosper, and spend their money on pre-made stuff for their sims. Meanwhile they can rent server space from anybody on the web, made easier if real money and metaverse money were equivalent. That means that servers get more reliable, people donate money to fund OpenSim development, and people have even more reason to come.

I was so annoyed when Prok called OpenSim a collection of rinky-dink servers. I don’t have the link to hand, I’m afraid, and I don’t know him personally – only through his disrespectful posts on other people’s blogs. Sorry, but abuse forfeits the right to reply here. So as not to seem illiberal, in the extremely unlikely scenario where he even sees this blog, he has exactly 100 words and one shot to convince, as does anybody else who indulges in abuse and negativity. If that doesn’t include a gentler means of disagreement (if not a retraction of the abuse), then so be it, only the 1st 100 words get published, possibly with strikethru if they really annoy me. I’m not a censor, but mine is a gentle blog, where people can disagree pleasantly if they like. I’m just trying to think how the market of ideas – not just of “money” – can be opened up in the metaverse.

State of theĀ metaverse

Reliability seems to be the issue at present. I remember well how unreliable SL was for much of 2007/8, and I shudder to think what it was like earlier – I must ask my friend who has a 2005 avatar. But of course it was always running on production servers, which distinguishes it from many of the OpenSim grids, the biggest of which are OSGrid (nothing to do with the British Ordnance Survey maps) and DeepGrid. Despite legions of dedicated developers, technical functionality is light years ahead of practical reliability because these ventures remain largely, if not entirely, unfunded. This should not detract at all from the nobility of the aim of bringing the open source metaverse to everyone.

Some open source endeavours have created a viable business model and I see no reason why the OpenSim grids should not do so in future. This is the real challenge facing these developers. It will not be long before their metaverse is technically superior to SL – in fact, in some respects, it already is. (You can already host your own server on your desktop, if you so wish, and link it to a public grid.) But today I have not been able to login to either of these two grids for more than a few seconds, despite many attempts. LL have a service oriented approach that they lacked in the early days, but this is essential to their success. In some ways they are still lacking, but this element will be vital if residents are to be tempted away from SL to OpenSim grids.

It almost doesn’t matter which grid these residents go to, since HyperGrid enables all but the “walled gardens” such as SL and OpenLife to be joined together with distributed asset servers. RealXtend can bring some of the visual glitz that SL lacks compared to impressive but fundamentally boring online games, and soon it will be available to be overlaid on top of OpenSim, following their recent co-operation. There are DRM issues to be resolved, of course. But it does matter that these grids must be much more reliable than they are at present. The average user does want amazing new technology – but only if it is good, and only if it is reliable and they don’t have to worry about it every time they log on.