Forum Link: Original Post

Town Hall with Philip Linden
Topic: Currency Exchange

Don Linden: Grid is opening up in 5 minutes. Lemme know if this shouldn't be the case
Jeska Linden: hey everyone :)
Jeska Linden: Hows everyone doing?
Jeska Linden: Thanks Torley
Jeska Linden: Hey Jack :)
Jack Linden: hello torley, someone let you back in then? *smiles*
Jack Linden: hi everyone
Jack Linden: That would be great Taln
Daniel Linden: You don't like Paypal, Angel?
Daniel Linden: I thought you used to request it....
Daniel Linden: ...but I might have that wrong.
Char Linden: sorry =)
Jeska Linden: We'll start in just a few minutes everyone :)
Char Linden: greetings wild and wonderful bunch!
Char Linden: indeed Tateru =) variety is the spice........ you know how the saying goes!
Philip Linden: hi all
Jeska Linden: Welcome to the Town Hall with Philip Linden. Philip will be discussing and taking questions on the future of currency exchange in Second Life.
Jack Linden: hi phil.
Jeska Linden: First some quick guidelines for the discussion. We will be focusing this Town Hall on the question of currency exchange, please don't submit your technical support or other off-topic questions, as they will be skipped over.
Philip Linden: Hi!
Jeska Linden: Questions can be sent to me (Jeska Linden) in the form of an IM. Questions will be answered in the order they appear on my screen. Also, when forming your questions, please try to keep them as concise as possible to allow the best flow of conversation.
Jeska Linden: I'd also like to ask those who have joined us in person to please hold down the noise and offers of friendship until after the meeting as it can be distracting.
Jeska Linden: Philip, take it away.
Philip Linden: Thanks!
Philip Linden: Well I'll leave the joking to my Tshirt.
Philip Linden: Thanks everyone for being here.
Philip Linden: First,
Philip Linden: for those who haven't been following along with all the excitement in the forums,
Philip Linden: let me give a bit of overview,
Philip Linden: and then I'll answer the questions which were posted in the forums,
Philip Linden: and then I'll take questions from everyone - IM those to Jeska.
Philip Linden: I announced in the forums on saturday that Linden Lab plans to deploy a feature which allows residents of SL to buy currency from other residents, using the credit card that they have on file with LL.
Philip Linden: We think that this is a very important thing to do, because we can make the process of buying so simple - minimally just a couple of clicks.
Philip Linden: We think that this will produce a signifigant increase in the amount of currency purchased, with the revenues from those currency sales going directly to SL content creators.
Philip Linden: We think this is both a way to make SL grow faster through content creators being able to make more money,
Philip Linden: and a way to remove a pretty big barrier to broader adoption of SL.
Philip Linden: As a more detailed example, consider the typical new user experience in SL:
Philip Linden: A basic user signs up, quickly spends their initial L$250 on clothing,
Philip Linden: and then runs into something that they would like to buy.
Philip Linden: Given that the average price of an object in SL is around L$100,
Philip Linden: they are wanting to buy something that is worth about 50 cents.
Philip Linden: We believe that the current process of visiting a third party site,
Philip Linden: creating an account,
Philip Linden: and giving out payment information
Philip Linden: is far more work than most people will be willing to go through to buy something that is worth 50 cents.
Philip Linden: This would be like visiting a third party website to buy currency to be able to return to ITunes and buy a single song track.
Philip Linden: So we think that if we make it really easy,
Philip Linden: we will put many more dollars into the pockets of content creators.
Philip Linden: And by doing that, grow SL faster.
Philip Linden: We do NOT have any intentions of restricting other sites or residents from selling currency
Philip Linden: - we think that a competitive market for currency sales totally makes sense.
Philip Linden: We also do NOT want to set or in any way control the price of L$.
Philip Linden: So this means we will create a simple mechanism that lets sellers of currency set the price they want, and they automatically passes along best price to interested buyers.
Philip Linden: For more information on this, see my forum posting in Feature Feedback.
Philip Linden: And I'll give some details in my answers to the forum posts.
Philip Linden: We realize that if we launch something like this, it will have an impact on the sites that have been created by residents to sell currency.
Philip Linden: This is something we have been very concerned about and thought a lot about.
Philip Linden: In the end, we just can't see a way where it would make sense to not deploy a feature like this to preserve the business(es) of specific residents.
Philip Linden: The addition of this kind of a feature is likely to make all of SL grow faster, and additionally this is the sort of things that if we didn't do, a competitor of SL would.
Philip Linden: It doesn't make sense to risk the whole world of SL on that kind of a decision.
Philip Linden: Also, as I have posted about in my blog and on the forums, many or most of our upcoming features compete with resident created businesses or content.
Philip Linden: Things like improvements to vehicles, new rendering models for trees, or better back-end API's for selling content via websites are some of the examples.
Philip Linden: So with that to think about,
Philip Linden: let me take some of the questions from the forums,
Philip Linden: and then come back to us here.
Philip Linden: Cristiano Midnight: In the new proposed system, who will the sellers be, the current exchanges or direct end users, and how will payouts be handled?
Philip Linden: Our thinking is that sellers will be anyone who meets a set of guidelines to minimally avoid fraud, probably meaning a minimum time with SL, and a selling history that suggests that money offerred for sale was obtained legitimately through in-world sa
Philip Linden: This seems the only fair approach - there isn't a reason beyond minimizing fraud to restrict the use of such a currency sale system.
Philip Linden: Payouts will be handled either by applying amounts obtained during the sale of L$ to your SL account balance, or by requesting a payment of funds.
Philip Linden: We aren't sure yet what exact mechanisms we will first support - mailed checks, ACH, paypal, etc.
Philip Linden: Merwan Marker: Is Linden Lab willing to provide us the results of any further discussions with GOM (assuming there are renewed discussions) released as a joint statement from both companies?
Philip Linden: As I said online, I don't see the benefit of such a statement unless there is some definitive relationship that is reached.
Philip Linden: Happy to keep working on ways to work together.
Philip Linden: As I said at the start, though, there is a fundamental challenge here in choosing between progress and complete non-competition.
Philip Linden: Sansarya Caligari: The issue of taking user-created code and innovation and making it integral to Second Life sets a precedent in regards to the now real possibility that Linden Labs will co-opt user-created innovations for the greater good of the virtua
Philip Linden: l community. With that in mind, is there a possibility that Linden Labs might create or support the development of legal patents for user-created
Philip Linden: content/services/innovations, support for in-world public companies for stock markets, and developer incentives specifically for those creators in Second Life
Philip Linden: who innovate new things which are eventually integrated into the basic services of Linden Labs?
Philip Linden: A: I can't see how this would be done without a full system similar to the US PTO (patent and trademark office) which could properly establish precedence and novelty in the many cases where there are many residents having built the same thing.
Philip Linden: We can't currently support the staffing such a system would require.
Philip Linden: Surina Skallagrimson: a) How does LL intend to counter the fraud threats that GOM has had to soak up? b) Would the currency exchange be open to trial user accounts? c) Would the exchange be avaiable on the teen grid?
Philip Linden: d) Would the exchange only be avaiable to "new" users, referencing Philips concirn about new users... e) What commission rate would LL be charging. f) Would LL charge "sellers" to use the exchange?
Philip Linden: (wow that's a lot of questions)
Philip Linden: a) It is somewhat easier for LL to track fraud, because we can see the detailed transaction history of both buyers and sellers and look for activity that may be suspicious.
Philip Linden: b/c/d) The exchange will be available to all residents having a valid form of payment registered with LL.
Philip Linden: e) We haven't yet settled on rates, or whether both buyer and seller will be charges fees.
Philip Linden: Vestalia Hadlee: Please comment on whether LL is in the process of attempting to develop an in-house currency exchange which directly re-creates, duplicates, or may otherwise be described a "carbon copy" of any existing third-party service.
Philip Linden: A: No.
Philip Linden: We are trying to build the minimal system which will allow residents to buy currency from other residents at the best available price.
Philip Linden: Other services like GOM will probably continue to offer many more sophisticated features, payment options, etc.
Philip Linden: Mulch Ennui: Is the Attorney General of the State of California aware that LL, by endorsing within the SL application, has given actual monetary Value of the currency being traded
Philip Linden: (ie creating it's own currency) and how will this effect things like labor laws for payments, sales taxe collection, legal issues pertaining to gambling, income tax and such.
Philip Linden: A: Without digression its lots of legal detail - We don't think we are breaking any laws, and certainly don't intend to.
Philip Linden: As a follow on though ... we should get our lawyer in here for a town hall. He is actually a fun guy ;)
Philip Linden: (wow this is a lot of cutting and pasting)
Philip Linden: I don't normally have to do it, but this is so important to answer everything...
Philip Linden: bear with me.
Philip Linden: Jeffrey Gomez: - Will this be "opt-in," or should we be concerned that our data may be used at any time?
Philip Linden: - If so, what warnings and "social-engineering" mechanisms will be put in place before a resident "accidentally" buys currency? - Will "shared accounts" now have to "trust" that other parties will not buy thousands of Lindens on the owner's credit card
Philip Linden: A: LL will not give payment information to any third party under this system - we will make any charges for currency purchases directly from LL to you.
Philip Linden: The same concerns about accidental purchasing currently apply to participation in land auctions, and we will warn in a similar way that currency purchases are real and irreversible.
Philip Linden: Jeffrey Gomez: If we are to continue doing so, we would like to see that our time is well-spent, and not being "used" as a testing ground for ideas that are later taken from us.
Philip Linden: A: There will be many cases beyond this one in which a feature that is of obvious benefit to the overall SL community will have the risk of competing with residents.
Philip Linden: I have posted in my blog and on the forums about this - I don't know whether there is a general policy or standard that the whole community can agree to.
Philip Linden: If we fail to add features to SL that make sense, we will risk losing everything we have all worked for to competitors.
Philip Linden: I am totally open to suggestions. Se my blog or the forums for some of the MANY other potential features that I think have this same risk.
Philip Linden: Moonshine Herbst: Will we still be able to get the USD paid to our PayPal accounts just like we can now with GOM & IGE?
Philip Linden: A: Yes, I think we should be able to offer the same capability.
Philip Linden: Maxx Mackenzie: What happens for users like me, where Paypal is not an option...
Philip Linden: A: I don't yet know what options we will have for payment. We'll make every effort to support the widest set possible, especially given that SL has so many international users.
Philip Linden: Lisse Livingston: Please clarify whether LL will be buying $Ls as well as selling them - and the methods that will be used to credit the sellers with their US$.
Philip Linden: A: Explained the payment-to-sellers options already. LL will always just facilitate a transaction between buyer and seller. We will not 'hold' the currency, set pricing, or create new L$ to sell.
Philip Linden: Jekyll McHenry: 1) When will you launch this service? 2) And is there any way to make you change your mind?
Philip Linden: A: We will launch as soon as we think we have a stable solution that will work and is tested. We think that minimally some way for users to be able to buy currency with their LL registered payment methods is very important for SL to grow.
Philip Linden: We aren't going to change our mind on that basic capability, but are totally open to ways to do it that support existing businesses.
Philip Linden: Hannibal Lektor: My question is from so far back you always said LL will not be involved in the sell or trade of $L. How do you defend yourself from your own history and how long til you aren't the middle man ?
Philip Linden: A: There is a difference between serving as a market between users and minting L$ currency to sell for our own profit.
Philip Linden: The latter is what we have always explained does not make sense for us to do, because it would make the economy unstable and provide no revenues for currency sellers.
Philip Linden: Serving as a go-between for sellers and buyers is something we have talked about doing since last year.
Philip Linden: Eloise Pasteur: So my question is, what actual demand rather than this hypothetical 90% demand are you seeing for this service from residents and is there sufficient demand to be acting in a fashion that the forum reaction tends to quite clearly demonst
Philip Linden: rate makes a large number of residents uneasy about the ethics of your proposal and it's impact on the ethos of SL?
Philip Linden: I already answered that I think in talking about the 50 cent value.
Philip Linden: We believe that lots more people will buy currency if we make it extremely easy.
Philip Linden: I agree we may be wrong, but I think it makes sense to find out.
Philip Linden: Gwyneth Llewelyn: The way I see this proposal is that in the very near future all content and services in Second Life will simply be paid in US$.
Philip Linden: No problems with controlling the in-world inflation, no problems with L$ sinks, no problems in "secure transactions" using L$, and bye-bye GOM, IGE, Anshe, or whatever system the residents come up with.
Philip Linden: Second Life will just become a new marketplace in the real world, offering 3D content for US$. Is that Linden Lab's ultimate aim?
Philip Linden: We think SL is like a country, and therefore should have it's own currency.
Philip Linden: We don't want to be subject to fluctuations in the value of the US dollar, for example.
Philip Linden: Also, one can live and work and spend money within SL without ever transaction to dollars - this is a very appealing aspect of a separate currency.
Philip Linden: Squagmire Stravinsky: Linden Lab has taken an idea (currency exchange) from a business existing within SL, and is re-creating it in their own vision. Are we likley to see more 'absorption' of resident made ideas in the future?
Philip Linden: A: I've talked about this subject pretty extensively in the forums already, and I am very open to ideas as to what is a great policy for SL.
Philip Linden: It is clear that to keep SL a viable and growing place for everyone, we will need to add features.
Philip Linden: These will very often compete with residents. If we do not do things like this a competitor will do them better and SL will cease to exist for everyone.
Philip Linden: Satchmo Prototype: If SL is to really become the next generation Internet platform we need open working groups that includes both residents and LL employees to develop API's everyone can use.
Philip Linden: Would Linden Lab consider creating an Engineering Working Group to develop open, secure, and well defined protocols for money exchange?
Philip Linden: Yes
Philip Linden: We'd be happy help and support that kind of a process. What I think would make sense would be for a resident to generate a starting proposal and gather support for it from other residents - we'd be happy to participate anywhere along the way.
Philip Linden: Apotheus Silverman: The system as it was explained a couple days ago preempts all the resident-created businesses, offers no avenue for advancement of the technology, and will likely be a step backward.
Philip Linden: Since this is a system that LL will likely not profit from, there will be no reason to improve it beyond basic functionality. Why was this path chosen over an alternative which would be an order of magnitude better?
Philip Linden: A: I completely disagree that the implementation has anything to do with the conflict with resident-created businesses.
Philip Linden: There is no way to implement a system of this sort which would not greatly affect existing businesses.
Philip Linden: Any system that makes it easy to sell currency to someone else will directly compete with the systems that have currently been built be residents to sell currency.
Philip Linden: Again, I would urge folks to read both my blog and forum postings for other examples of this problem.
Philip Linden: whew!
Philip Linden: that was a lot of stuff.
Philip Linden: OK I am back with my fingers.
Philip Linden: Ready for questions... Jeska?
Jeska Linden: Jarod Godel: Why did you go with an in-house trading system, as opposed to an "economic API" which would have allowed users to plug SL directly into things like Ebay?
Philip Linden: Such an API would logically have to have the same functions....
Philip Linden: sellers setting prices and
Philip Linden: matching with buyers.
Philip Linden: it doesn't matter much whether it is a website or API
Philip Linden: everyone can use a website,
Philip Linden: so that is the right first step.
Philip Linden: we'll add an API too.
Philip Linden: Something else on that topic...
Philip Linden: We can't just build an API that allows anyone to sell anyone anything
Philip Linden: and put it on their LL credit card account.
Philip Linden: This is because we would have chargebacks caused by resident disputes,
Philip Linden: and that would instantly put us out of business...
Philip Linden: you can't have a high level of chargebacks with your bank.
Philip Linden: So we can't just have a general API that says SellXtoYforZ()
Philip Linden: OK
Jeska Linden: Taco Rubio: Isn't this just another way for the exploitative class in SL to get richer at the expensive the the little guy? Why not simply open a market for linden based on the current auction model?
Philip Linden: Basically what we will do it an auction for linden....
Philip Linden: sellers set prices.
Philip Linden: remember that we are NOT selling new L$
Philip Linden: OK
Jeska Linden: Brad Vox: Are you guys going to implement the API system for currency exchange?
Philip Linden: Again...
Philip Linden: it really makes no difference.
Philip Linden: what we have protyped to date is a web page,
Philip Linden: but you can automate price setting and update things every second if you like.
Philip Linden: I highly suspect there will be folks wanting to do that.
Philip Linden: if we started with an API, we would set a barrier of being a programmer (or paying one) to use the system.
Philip Linden: I don't see how that makes sense.
Philip Linden: There isn't anything different between the API and HTML approach.
Philip Linden: The model is exactly the same - sellers can dynamically set pricing.
Philip Linden: I agree it is harder, yes.
Philip Linden: OK
Jeska Linden: Neptune Rebel: I want to convert my Lindens to USD. Is it better for me to wait until the new system is up or is GOM better? I understand that the new system should benefit newbies for BUYING lindens, but what about selling?
Philip Linden: I'm sure that GOM and others will offer features we don't have.
Philip Linden: All we are trying to do is have the minimal system allowing sellers to set their own prices.
Philip Linden: If we could do something simpler we would.
Philip Linden: OK
Jeska Linden: Adam Zaius: Question: with the recent devaluation of the L$ on various third party exchanges; what steps (apart from the formation of the Linden ordering system) are being taken to address the inflation rate?
Philip Linden: Separate topic - we are looking at what we need to do there.
Philip Linden: Not related to the exchange issues.
Philip Linden: OK
Jeska Linden: RaAusar Powers: How about allowing an option to sell our content for L$/ US$ or both? feasible?
Philip Linden: The problem with selling content is what I mentioned earlier...
Philip Linden: if we do something that is an API where you can sell "FairyWings" to someone for $3.00
Philip Linden: or something like that,
Philip Linden: what will happen is that sometimes
Philip Linden: people charge back.
Philip Linden: and then we get in trouble,
Philip Linden: because we can't have a high chargeback rate.
Philip Linden: So no, no plans to do that.
Philip Linden: that is what the L$ is for.
Philip Linden: OK
Jeska Linden: Wayfinder Wishbringer: I foresee 2 problems... con men selling L$ at exhorbitant prices to newbies, and folks who don't understand L$ value vastly underselling. Will anything be in place to stabalize these things? In RL we have the FED.
Philip Linden: That will not be a problem for two reasons:
Philip Linden: one is that the system will sell at the lowest price among sellers,
Philip Linden: so there is no concept or relevance to who the seller is
Philip Linden: the second is that we will impose basic checks on sellers
Philip Linden: to make sure that they are not committing fraud.
Philip Linden: as I discussed earlier in the first forum question.
Philip Linden: OK
Jeska Linden: Prokofy Neva: What steps are you considering to halt the seeming downward spiral of the LL rate vs. the dollar which seems in part precipitated by this very uproar over the GOM? And what assurances will we have that you won't decide to fix the rate of..
Jeska Linden: ...the LL at $2 US
Philip Linden: I don't think the drop is from the currency discussion.
Philip Linden: there has been a gradual decline over several months of about 6% in the value of the L$
Philip Linden: we are thinking about that and will make some announcements soon.
Philip Linden: But, we will NOT fix the price in any way with this market
Philip Linden: the price will be set by sellers.
Philip Linden: We believe free market is best for currency price setting.
Philip Linden: Like most countries.
Philip Linden: OK
Jeska Linden: Tasty Tapioca: How does this feature that is to be implimented protect a seller from "chargebacks"?
Philip Linden: We will cover chargebacks,
Philip Linden: because we are collecting from the buyers and then giving to the sellers
Philip Linden: you will be paid by LL, not the buyere.
Philip Linden: OK
Jeska Linden: Topa Herbst: What exchange rate will be used with countries over seas?
Philip Linden: I don't know - that is a great question.
Philip Linden: It will depend on how you demand payment.
Philip Linden: In some cases, like paypal, we can just pay in US$
Philip Linden: and allow you to choose how to convert.
Philip Linden: yes for buyers it will be automatic with the CC company,
Philip Linden: that is right.
Philip Linden: OK
Jeska Linden: Chase Rutherford: How do u think this change will affect the price of the L$?
Philip Linden: I'm not sure. Probably it will go up because there will initially at least be much more demand
Philip Linden: created by the new system.
Philip Linden: Our hope, again, is that this increases the total amount of currnecy buying.
Philip Linden: At present it is around US$300K per month.
Philip Linden: OK
Jeska Linden: finn Jensen: So this in general means that Linden Lab, can steal any business a user has created? Is this not somehow contravercial to how SL is advertised " come here and make money" "We provide the platform, you create the the content"?
Philip Linden: This is the big question that I agree is really tough...
Philip Linden: do we improve SL or not,
Philip Linden: in cases where someone else has done the feature first,
Philip Linden: in a less scalable way.
Philip Linden: Consider the trees in SL...
Philip Linden: this was a great example from the forums.
Philip Linden: We licensed this amazing tree code called SpeedTree...
Philip Linden: check out some of their demos.
Philip Linden: Now there are MANY People making money selling trees in SL.
Philip Linden: If we deploy the feature we will hurt their businesses.
Philip Linden: That sucks.
Philip Linden: Very hard decision.
Philip Linden: What would you have us do?
Philip Linden: The only thing I can see making sense is we release it.
Philip Linden: Because it we don't,
Philip Linden: a competitor to SL will.
Philip Linden: But I agree this is frustrating.
Philip Linden: OK
Jeska Linden: Barrister Kennedy: As opposed to establishing a LL PTO, are there plans to change the license to allow users to apply for patents covering their in-world creations/innovations?
Philip Linden: Anyone can patent whatever they want, outside the SL content system.
Philip Linden: this is a good thing to do in any case.
Philip Linden: we certainly agree that if there is a case where we need to license something, etc,
Philip Linden: that is exactly what we should and will do.
Philip Linden: OK
Jeska Linden: Osgeld Barmy: dont you think work with current buggy systems and the impending relase of 1.7 needs to be taken care of more than a system that most likley add into the already long list of annoying bugs?
Philip Linden: 1.7 is way ahead of this in terms of priority.
Philip Linden: We are releasing preview soon.
Philip Linden: within 24 hours almost certainly.
Philip Linden: so this is lower in priority,
Philip Linden: and is primarily web work.
Philip Linden: where we have less overlap.
Philip Linden: OK
Jeska Linden: FlipperPA Peregrine: LL's biggest challenge is open lines of communication. While secrecy is required for certain projects, things like the voting system could be expanded to a features system; what's being worked on, a wish list, etc....
Jeska Linden: ...This would allow feedback. Comments?
Philip Linden: I think that is a great idea. The voting system can be opportunistically used that way today,
Philip Linden: and we could add stuff to make it better support generalized discussions.
Philip Linden: OK
Jeska Linden: Beau Perkins: Does all this mean that less experienced residents that may want to one day develope web services for SL will not have the same opportunity?
Philip Linden: I don't see how...
Philip Linden: if anything stuff like this makes it easier for less experiences residents to do things.
Philip Linden: With respect to currency sales,
Philip Linden: this means that someone with lots of currency,
Philip Linden: but not a dedicated website or team,
Philip Linden: can also sell currency if they choose.
Philip Linden: OK
Jeska Linden: Newfie Pendragon: Aside from your 'feeling' it will be good for SL's long-term growth, what hard evidence (such as surveys, analysis, etc) have you gathered to back up this feeling?
Philip Linden: We haven't done any surveys.
Philip Linden: It doesn't seem like a topic that would work well with a survey,
Philip Linden: although I agree that might help.
Philip Linden: But honestly it seems pretty obvious that a single click way to buy currency would be a big win.
Philip Linden: We are really trying to make the first few hours easier.
Philip Linden: This seems like an obvious way to help with that.
Philip Linden: OK
Jeska Linden: Elle Pollack: Q: Have you read Jamie Hale's post to the GOM forums regarding your attempts to work togeather? If so, do you care to offer any rebuttals/clarifications/tell the story in your own words?
Philip Linden: As I said in the forums,
Philip Linden: I am respectful of Jamie as a long-term resident of SL.
Philip Linden: I have no intention of violating his privacy in the way I would need to
Philip Linden: in order to answer.
Philip Linden: And I just don't really see the benefit.
Philip Linden: There are always going to be cases like this,
Philip Linden: with other features, like I said.
Philip Linden: OK
Jeska Linden: Dnate Mars: Will selling only be open to preapproved people, or can anyone sell at any time?
Philip Linden: Preapproved means someone who is unlikely to be committing fraud,
Philip Linden: minimally.
Philip Linden: So we will want to balance restricting fraud with broad access.
Philip Linden: There will probably also be requirements around giving an address,
Philip Linden: etc,
Philip Linden: for reporting purposes, since we will b paying out money.
Philip Linden: OK
Jeska Linden: Mex Thorn: Why is there a sudden need for more transfer options it will just create more chaos and the valule of LD will drop even more with GOM and IGE it just follows the flow this will turn the flow around?
Philip Linden: I don't think the LD will drop, because demand will be dramatically increased.
Philip Linden: OK
Jeska Linden: Cristiano Midnight: With all due respect, there is much difference between a web page and an API. There is no easy integration with a web page, so why go that route? It is also insecure, as opposed to using standards based APIs like webservices
Philip Linden: I think a web page is a good place to start because it also allows people without web coding experience to use the system.
Philip Linden: OK
Jeska Linden: Anshe Chung: It seems IGE started to unload their 40 million L$. Are there any plans on behalf of Linden Lab to counter this huge amount of horded L$ now beginning to flood the market?
Philip Linden: No.
Philip Linden: The market, I think, is fairly efficient.
Philip Linden: Even a large seller will not affect the overall float.
Philip Linden: OK
Jeska Linden: Wayfinder Wishbringer: I think this will help prosper the economy. But in RL, the FED controls the value of the $. If L$ value is uncontrolled, predictable economy crash. Has LL got anything planned in way of setting value of L$ in such transactions?
Philip Linden: We manage the L$ just like the fed, by changing source and sink values
Philip Linden: to match GDP growth.
Philip Linden: Very similar to how it works in RL.
Philip Linden: There isn't a need to set the currency exchange price.
Philip Linden: OK
Jeska Linden: Morgan Albion: Heavy volume traders will want an official, documented API. They will not like the idea of web page, which is likely to change, breaking their scrapers. Comments?
Philip Linden: OK I agree. We'll be happy to take that on.
Philip Linden: But I don't think we need to do it out at first to have the system have a benefit.
Philip Linden: OK
Jeska Linden: Xandi Mars: lindens had no value untill they made them valuable - if sl sets their rate a bit higher it will bring the market thatn an option?
Philip Linden: No. We just don't think price fixing makes sense...
Philip Linden: there would always be different prices on other markets.
Philip Linden: I guess it works sometimes for China,
Philip Linden: but we don't think it is the right strategy for SL.
Philip Linden: OK
Jeska Linden: Tiger Crossing: Timeframe?
Philip Linden: Probably a couple weeks until some kind of limited beta...
Philip Linden: where we let a few people trade to make sure everything is working.
Philip Linden: But as I said before,
Philip Linden: the 1.7 work has priority.
Philip Linden: OK
Jeska Linden: Templar Baphomet: If the money supply gets out of balance, e.g. not enough sellers qualified to meet the demand of buyers, is it on the table that LL will stabilize by increasing the amount of currency in circulation? The reverse situation may be....
Jeska Linden: ...more likely, as now.
Philip Linden: I guess that is possible, but I suspect it will be unlikely.
Philip Linden: The market is pretty large even relative to more buyers.
Philip Linden: OK
Jeska Linden: Surreal Farber: With problems like the recent hack, how will concerns over security and beta testing be addressed
Philip Linden: I don't think probs with SL exploits relate to web services.
Philip Linden: But we face the same challenges there as other companies.
Philip Linden: Also we have lots of you guys to help us test.
Philip Linden: And many of you are experts.
Philip Linden: OK
Jeska Linden: Csven Concord: Assuming that the goal of this effort is to spur content creation by encouraging an increase in currency exchange, how will LL gauge the effects of this system on the overall content market?
Philip Linden: Well we can hopefully see changes in the overall market size.
Philip Linden: And there are indicators like number of object sales that will, if they follow,
Philip Linden: help confirm.
Philip Linden: we publish those stats on the community pages.
Philip Linden: OK
Jeska Linden: Malachi Petunia: Why do you expect chargebacks on items but not L$?
Philip Linden: Because in the case of L$ they are easy to explain, cannot be 'broken' or 'defective', and are guaranteed by us.
Philip Linden: OK
Jeska Linden: Shaun Altman: If you must grow your platform by nationalizing resident pioneered businesses, to generate revenue that you call insignificant to LL...
Jeska Linden: ...why don't you give that revenue to the poineers that you shut down, in the form of a royalty of some sort, forever?
Philip Linden: How would we decide how much and what to do in the case where there were many creators?
Philip Linden: For example...
Philip Linden: in this case...
Philip Linden: What % of LL would you recommend giving to GOM for their contributions?
Philip Linden: How much cash, knowing that every dollar risks the company's future?
Philip Linden: I don't think it makes sense to try and decide that in some automated way...
Philip Linden: for example,
Philip Linden: do we owe anyone else for innovating in currency exchange?
Philip Linden: There are other folks who have done work on this.
Philip Linden: right?
Philip Linden: OK
Jeska Linden: milady Guillaume: You said "I don't think the drop is from the currency discussion....." who on your staff has been telling you this? if not this "panic" then what IS the cause?
Philip Linden: The currency has been declining gradually for several months.
Philip Linden: If there is some fluctuations on this news,
Philip Linden: we'll just have to ride it out.
Philip Linden: OK
Jeska Linden: Gwyneth Llewelyn: Will the proposed system will be anonymous for both sellers and buyers?
Philip Linden: Thanks Jamie.
Philip Linden: I'm not sure whether anonymous or not. Good question.
Philip Linden: OK
Jeska Linden: Aluria Quatro: Will LL set a base rate for L$ which other businesses such as GOM/IGE or new blood to the field be able to speculate and attempt to make a profit at? If so how will LL handle currency valuation issues?
Philip Linden: Again - sellers will set prices,
Philip Linden: we will not hold, create L$, or make a market.
Philip Linden: OK
Jeska Linden: Mex Thorn: What about real world taxes? Wont LL need a licence to be able to do these transfers? Dont real taxes apply?
Philip Linden: It will depend on the way we pay you. Different methods require different reporting.
Philip Linden: If we are mailing checks, we will probably need to fill out 1099's, at least in the US
Philip Linden: OK
Jeska Linden: Chickun Bobbysocks: I am concerned if this system becomes integrated very well, a third party corporation with a lot of money could step in and begin buying up land or paying people to fly large blimps around with a banner that reads their brand name...
Jeska Linden: Would linden consider allowing such advertising?
Philip Linden: We reserve the right to not allow real world advertising.
Philip Linden: People can at least try that just as easily today.
Philip Linden: I don't see how this would change things.
Philip Linden: OK
Jeska Linden: Jarod Godel: Why didn't you do this in the beginning, like There? Were GOM and IGE "market research?"
Philip Linden: We didn't think that much about it.
Philip Linden: We weren't sure how quickly the L$ would really become valuable as US$
Philip Linden: And GOM came around really early and started doing it. I can't remember the exact date.
Philip Linden: It was surprising to see such a large amount of trading early on!
Philip Linden: We didn't think US$ trading would become as relevant as quickly.
Philip Linden: So we didn't think it was a priority.
Philip Linden: OK
Jeska Linden: Damanios Thetan: Will the L$ set for sale stay in your account until sold, or are they taken out of the economy, if so, who owns them?
Philip Linden: Yes... Dec 5 was really amazingly early.
Philip Linden: We had only just announced the land pricing changes.
Philip Linden: Whoa go easy with that thing ;)
Philip Linden: But let me answer...
Philip Linden: the L$ will go out of your account instantly when a buyer buys.
Philip Linden: Perhaps a bit of comic relief.
Philip Linden: OK
Jeska Linden: Taeja Diaz: You mentioned that you did notknow if these transactions would be anonymous. Does thatmean that it may be possible for just player information to be seen such as the names of avies...
Jeska Linden: ... conducting the transactions or will it bepbe possible for personal rl information to be seen such as names, addresses, etc?
Philip Linden: NEVER RL information.
Philip Linden: I was just saying I wasn't sure whether you would be able to see who you bought L$ from.
Philip Linden: My gut feeling is the right answer is NO.
Philip Linden: But let's test something out and see.
Philip Linden: OK
Jeska Linden: Jarod Godel: If SL is a country, if the Linden is its currency removed from US dollar influence, how long until Linden Lab employees are paid in Lindes?
Philip Linden: We would need a very transparent policy for that...
Philip Linden: so that everyone knew when we were putting money into the economy in that way.
Philip Linden: Very important to maintain that sort of separation.
Philip Linden: We can't just make L$ without telling people.
Philip Linden: OK
Jeska Linden: Tiger Crossing: GOM provides VERY detailed information on transaction history (even if the others don't)... What about LL, to start?
Philip Linden: GOM has a large and great feature set for experienced traders.
Philip Linden: All we want is for people to be able to buy currency easily from other people.
Philip Linden: So expect less capability in anything we do.
Philip Linden: OK
Jeska Linden: Aluria Quatro: Does LL have an economist in house now, ot has it been overlooked? If LL does, who is it?
Philip Linden: I am still looking for an external economist to serve as an advisor.
Philip Linden: Feel free to send along ideas.
Philip Linden: But no, we don't have anyone yet.
Philip Linden: OK
Jeska Linden: Taco Rubio: Will sellers be disallowed for 'any reason, or no reason at all' ?
Philip Linden: Nope... sellers will be subject to some published guidelines.
Philip Linden: nothing hiden.
Philip Linden: OK
Jeska Linden: Ricky Zamboni: Is the market going to be sellers only? Or will there be a "buy" side as well?
Philip Linden: Only sellers in the market,
Philip Linden: and a simple buyers interface aimed at someone wanting to just exchange some US$ for L$
Philip Linden: We would be risking the company if we bought at a fixed price with the assumption of later sale.
Philip Linden: We will not hold a position in L$.
Philip Linden: OK
Jeska Linden: Tateru Nino: So much of what LL and the residents do echo each other. Which is to be expected, we're both working towards the same goals, and LL has probably been working on these things longer....
Jeska Linden: SL is more agile than LL, and tends to preempt the plans... How frustrating is it to see SL residents fill the niche before LL can finish doing it themselves?
Philip Linden: I don't see it that way.
Philip Linden: It seems pretty balanced.
Philip Linden: Most stuff is done faster and better by all of you.
Philip Linden: But that is OK.
Philip Linden: I just don't like these situations we are going to run into where it makes sense to build something into SL
Philip Linden: and someone loses money or just has work replaced because of it.
Philip Linden: I am an engineer myself.
Philip Linden: I don't want to build something and then have it replaced.
Philip Linden: Plus if I lose a business opportunity... that is really frustrating.
Philip Linden: OK
Jeska Linden: Shasha Suavage: is this the new SL law of eminent domain?
Philip Linden: Like I said,
Philip Linden: I am pretty open to thoughts on this.
Philip Linden: But in general,
Philip Linden: I think that there will be many cases where this type of situation will come up.
Philip Linden: OK
Jeska Linden: Wayfinder Wishbringer: Let's say I want to sell 100k L$ today. On the GOM I could do that easily. How will the new system handle that?
Philip Linden: You will place a 100K order and set your price.
Philip Linden: The system will sell it to buyers as the order come in.
Philip Linden: OK
Jeska Linden: Csven Concord: Increased sales of current content don't mean an increase in new content. So is there is some mechanism or yardstick by which LL will measure an increase in NEW content? I don't recall the stats including this kind of detail.
Philip Linden: The rate of uploading of sounds and textures and animations is a good proxy for that.
Philip Linden: It can measure indirectly the rate of new content creation.
Philip Linden: So I can report on that.
Philip Linden: I'll go a few minutes more.
Philip Linden: couple more questions.
Jeska Linden: Roseann Flora: How easy will the new program work next how GOM works?
Philip Linden: Like I said... differently.
Philip Linden: All we are trying to do is sell currency from you to buyers in a fair way.
Philip Linden: For buyers the process will be very very easy because they will
Philip Linden: just pick an amount they want to pay and press OK
Philip Linden: and get the L$ in their account instantly and the bill on their credit card.
Philip Linden: For the seller the interface will be a basic ability to post a number of L$ for sale at a specified price.
Philip Linden: OK
Jeska Linden: Prokofy Neva: You've mentioned content like trees or vehicles that you think LL will supersede -- what areas do you think LL won't be working in that would be safer for investors to develop knowing you won't overtake them?
Philip Linden: Well clearly the contents of the world are way beyond our ability to influence
Philip Linden: Just look at things like the welcome areas... we just buy them from you guys nowadays.
Philip Linden: Features and tools that supercede content are the area of concern.
Philip Linden: As with the examples I gave in the forums and my blog.
Philip Linden: But I agree it is a moving target and frustrating.
Philip Linden: Our goal is simply for SL to grow as fast as it can...
Philip Linden: we are still a small community and a small company
Philip Linden: with lots of challenges.
Philip Linden: What we think about, all day long,
Philip Linden: is how to make SL work better for everyone,
Philip Linden: and how it make it easier to understand and 'get'
Philip Linden: OK that is about all the time I've got.
Philip Linden: We've gone an hour and a half.
Philip Linden: and I will sit down and hang around a bit.
Philip Linden: Thank you for coming
Jeska Linden: Thank you for coming out everyone, if you have more questions, please feel free to post them in the Hotline to Linden as well.
Philip Linden: and for your patience in listening.
Philip Linden: and in hearing me out.
Jeska Linden: We'll be posting the transcript to the forums shortly.
Philip Linden: I realize that this is a tough subject.
Philip Linden: I hope that I have been of some help in explaining my position on this.

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