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Interesting:

"US Congress launches probe into virtual economies

Sun Oct 15, 2006 10:10pm PDT

By Adam Reuters

 

SECOND LIFE, Oct 15 (Reuters) - Booming virtual economies in online worlds such as Second Life and World of Warcraft have drawn the attention of a U.S. congressional committee, which is investigating how virtual assets and incomes should be taxed.

 

“Right now we’re at the preliminary stages of looking at the issue and what kind of public policy questions virtual economies raise — taxes, barter exchanges, property and wealth,” said Dan Miller, senior economist for the Joint Economic Committee. “You could argue that to a certain degree the law has fallen (behind) because you can have a virtual asset and virtual capital gains, but there’s no mechanism by which you’re taxed on this stuff,” he said.

 

The increasing size and public profile of virtual economies, the largest of which have millions of users and gross domestic products that rival those of small countries, have made them increasingly difficult for lawmakers and regulators to ignore.

 

For example, in Second Life up to US$500,000 in user-to-user transactions take place every day, and the economy is growing by 10 to 15 percent a month."

= =

 

SO NOW, they want to tax virtual wealth too!

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I watched this on BBC2s 'Money program', last week.

 

http://www.bbc.co.uk/pressoffice/pressrele.../24/money.shtml

 

I'd have thought that it would be unnecessary to tax any gain within the virtual world, as it would be the actual gains when realised in the real world that would end up getting hit. However, it would presumably be possible to defer real gains, by hanging on to them in the virtual world.

 

There were examples of companies such as Reebok getting involved to advertise their wares, but nothing was said about banks, or whether virtual credit was possible, though there were virtual ATMs. I'm not up on this, but I would assume that there is a finite supply of virtual currency generated within the game world, so presumably no inflation? I think this aspect would have been a far more interesting slant for the beeb to take.

 

It was also interesting to see that it is possible to generate an income from 'gold-harvesting' within these game worlds. The example shown was a sort of high tech sweat shop, with Chinese workers clocking in to perform mundane virtual tasks at their PC work-station, accumulating virtual wealth, whether via the in-game fiat currency, or valuable items. These items were then sold in the real world through e-bay to cash-rich, time-poor players in the west. Presumably the 'gold-harvesters' were paid per hour, with the employer creaming off larger profits. It may be worthy of note, that many in game currencies, especially the medieval fantasy types are the classic 'gold-piece', though in Second Life it's something called the Linden after the street where the developers were based.

 

Another point was that virtual property developers were snapping up areas of the game world, then sub-letting them to other players for real-world profits.

 

On a more philosophical note, if people get so involved with these, that it partially replaces their real world interaction, presumably we could end up with virtual worlds within virtual worlds.

 

TLM

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Is there a virtual stock market (as against these virtual stock market games)? If not, lets set one up, surely we can create our own virtual bubble.

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On a more philosophical note, if people get so involved with these, that it partially replaces their real world interaction, presumably we could end up with virtual worlds within virtual worlds.

 

TLM

Yes, very philosophical. What makes you think that we are not already in one now?

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Yes, very philosophical. What makes you think that we are not already in one now?

 

Great fleas have little fleas upon their back to bite 'em, and little fleas have lesser fleas, and so ad infinitum...

 

Until Morpheus sends me the phone, I guess I have to assume this is the real deal.

 

Is there a virtual stock market (as against these virtual stock market games)? If not, lets set one up, surely we can create our own virtual bubble.

 

apparently so, though looks limited at the moment:

 

http://www.slsolutions.org/?PHPSESSID=33db...b8fcd21e23d75ea

 

also virtual banks and credit cards looks to be a goer in SL too:

 

http://www.zdnetasia.com/news/internet/0,3...62015826,00.htm

 

TLM

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Yes, very philosophical. What makes you think that we are not already in one now?

 

 

There was a theory a few years ago that we were in fact living in a matrix like world created by humans in the future that had advanced far enough to create such a thing.

 

In theory online communities are interesting, they allow alternative models of existence to be experimented with. But from what I've seen, 2nd life is overwhelmed with people repeating the behaviours of the real world (which are determined by our economic and political structures to an extent).

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