Brands signature revisited :-)

[Tyler Durden]

Huh? You're good at coding-type comments, but from my limited brain you seem 
to have missed his main point. Can virtual-world economics impact/sink 
real-world economies? That's not entirely obvious to me. Or at least, it's 
by no means intuitive. Remember too that this is just ONE game here. Soon, 
there will be thousands, many of which may not even exist long enough for 
taxation to be enforced. And indeed, that might drive some worlds to become 
very temporary. And what if the exchange rate is no longer to USD but for, 
say, CPU time or disk space or gold or silver? Tim May's ghost will be 
leaping for joy. (Oh wait: Tim May IS Tim May's ghost.)

In fact, the only way for such an environment to be reliably taxed is for 
the feds to tax every computer interface that links to the net, and it's 
just too late for that. Or perhaps, the Feds will just grab a slice of every 
transaction that exits a bank account, irregarless of where it's ostensibly 
going.

As far as I'm concerned, these are just tip-of-the-iceburg issues here. When 
we start considering trans-world untaxed (ie, not by real-world governments) 
digital coinage then things become unclear very quickly (and despite the 
existence of trans-world exchanges, these are still closely bound to the 
USD). Oh, and it seems obvious that if these online economies keep growing, 
some of the game operators will want a tiny tiny slice of each transaction, 
which may drive them to make games free just to get the discount revenue.

But his essential points stand, even if the specific implementations 
suggested aren't yet feasible.

-TD




>From: cyphrpunk <cyphrpunk at gmail.com>
>To: cypherpunks at jfet.org
>Subject: Re: Brands signature revisited :-)
>Date: Tue, 17 Oct 2006 16:06:13 -0700
>
>> >On the way home today I heard NPR running a story about the new "desk" 
>>at
>> >Reuters: they have assigned a full time reporter to cover "business" in 
>>a
>> >virtual world (2nd life).  This reporter described his appointment as a
>> >normal reaction by Reuters to real "news" being made.  After all, this
>> >virtual world has a thriving economy that has an actual physical 
>>exchange
>> >setup to trade "Lindars" into USD (floating this A.M. at 207 Lindars to
>> >one USD).  It appears the USG is so worried about all the real cash 
>>being
>> >generated that they are *seriously* looking at setting physical taxes
>> >against these virtual currencies (wherever there is a point of 
>>exchange).
>
>What a moronic comment.
>
>First of all, the SL currency is not Lindars, it's Lindens.
>
>Second, Lindens have not traded as high as 207 to the dollar in a long
>time if ever. The current rate is 274 to the dollar which is down from
>over 300 to the dollar a few months ago.
>
>> >Lets take this to its obvious limit - why hire a spammer to send
>> >penisgrams when you can use that botnet to make Lindars?  Or, to quote a
>> >friend of mine, "Great!  Kim Jung Il needs only to hire a few kids to 
>>beat
>> >the embargoes!  Funny!!!".
>
>How exactly is the botnet going to make money playing SL? In general
>there is no reliable and automatic way to make money in the game,
>nothing that could be automated to the degree that it could be run by
>a botnet. You can make a few Lindens an hour by sitting your avatar in
>"camping chairs" which some in-game businesses run to attract traffic,
>but first of all that is an infinitisimal rate of pay in dollars, and
>secondly it requires considerable sophistication to maneuver an avatar
>to an appropriate location, identify occupied and unoccupied camping
>chairs, and sit in one. It is at or beyond the state of the art in AI
>research and would require extensive hacking even to get the game into
>a situation where it could be controlled by software rather than a
>user.
>
>> >If these currencies are crossing the virtual / physical interfaces then
>> >they have become real and real is (and always will be) taxable.  That
>> >means that forgery is a real issue - enter Mr. B.
>
>Forgery is not an issue. Lindens are not bearer certificates, they are
>merely accounting entries. The real financial threats are the same one
>as for other online services, namely breakins that steal real-world
>names and credit card numbers. The SL servers suffered such an attack
>a few weeks ago.
>
>> >I find this fascinating!  We just went at this the wrong way!  Fuck
>> >e-gold!  Gimme Lindars!!!
>
>Again you and other commentators have missed the real issue. Taxing
>money moving out of the game, if that ever happens, is going to drive
>commerce to stay within the game. There is no reason you can't buy and
>consume information goods like books, magazines, music and video
>in-game, supporting your habit by selling in-game goods and services
>of your own.
>
>Where this must lead is taxation of in-game transactions. The
>government is ultimately going to have to force SL to tax internal
>exchanges and send those receipts to the IRS. Or perhaps they will
>record the country of origin of each player and send taxes to the
>approrpriate national government. Imagine having to implement software
>to model every taxation system in the world. Not a pretty task.
>
>CP

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