Philip Rosedale Answers Your Second Life Questions

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Last week, we solicited your questions for Second Life creator Philip Rosedale. Your questions were excellent, as are his answers. Thanks to all.

Q: Do you have macroeconomists regulating the supply of Linden dollars? [Some virtual worlds do.] Are they Keynesians? Monetarists? Does the economy experience inflation?

A: We don’t have an economist on staff yet, but we’d love to hire a great one. That said, we do take macroeconomic analysis and the management of the economy very seriously. We have a dedicated team that monitors financial transactions in-world, as well as some automated circuit-breakers that help to keep the Linden dollar stable, at around L$270 to US$1. The GDP of Second Life is growing rapidly relative to the “outside” world, meaning that we have to aggressively increase the money supply to match velocity or we would see a rapid increase in the value of the Linden dollar. We do this transparently; you can see the changes made to the money supply and how they match economic growth here.

Q: What security measures do you take to prevent fraud and abuse? Do you have a dedicated security team?

A: Yes, we have a large team dedicated entirely to dealing with fraud and abuse. It is an important competence for us to build — any platform offering the capabilities of Second Life must necessarily also afford some ability to break the rules, and tracking and managing those cases is important to our success. However, much of the overall “security” of Second Life is provided by those using the platform, such as communities in-world that set their own “zoning” guidelines around content use.

Q: What is your position on “Rule of Law” in Second Life for promoting a stable economy? What role should the Lindens play in assuring that SL is a fair and just place to do business? I left SL a while ago because running a business eventually became too frustrating.

A: We need to create tools as a platform that allow people to self-govern. Though that process may be a bit rockier at the start, it is ultimately the only one that will scale. The Web, for example, felt similarly unregulated at the start. As time went by, people created their own customs and rules.

Q: What steps have you taken to prevent collusive or otherwise anticompetitive activity in Second Life? Do you have personnel dedicated to regulating that aspect of the economy? Do you ever wonder if we are simply characters in a Second Life in some other world?

A: Second Life as a platform is inherently less supportive of anticompetitive or monopolistic activities, which I think is one of the things that makes it so appealing. For example, there are really no “natural resources,” meaning that no one can corner the market on them. Genuine appeal and intellectual value tends to drive Second Life pricing more than distribution muscle and brand.

Q: How do you feel about accusations that by providing a literal “second life,” you’re contributing to a trend of physical isolation that’s damaging the social abilities of an increasing number of teens and adults?

A: Whether sitting in front of a computer is bad for you is a function of whether what you are doing there is more or less challenging than real life. If you are mindlessly shooting monsters, the environment has the risk of making you oversimplify the real world. If, on the other hand, you are confronted with a complex human environment with people from all over the world who are demanding of you in your interactions with them, you could actually be better off in front of the computer. Second Life can teach people new skills and connect them with new cultures in a way that the real-world environments of many places cannot.

Q: Linden Lab has talked before about the future possibilities (and challenges) of connecting to or communicating with other grids and virtual worlds. Do you feel that this is an actual possibility? What impact do you think this connection would have on Second Life’s economy?

A: We believe that virtual worlds with the kind of power and features that Second Life has will be a big benefit to human society, and also that we can continue to run a great business in a very open world. The Second Life economy will hopefully continue its strong growth regardless of our openness and interconnection with other worlds, because there is a tremendous “network effect” that will make people seek out the world with the largest economic opportunities. This is similar to the way eBay, as an auction site, enjoyed network effects that kept it largest in the face of strong competition.

Q: Have you ever read Snow Crash by Neal Stephenson? I don’t know much about Second Life but it sounds similar to the Metaverse in the fiction novel.

A: When Snow Crash came out, I was already really intent on the idea of creating a virtual world like Second Life — I had been thinking about it and doing what small experiments I could since I was in college. But Snow Crash certainly painted a compelling picture of what such a virtual world could look like in the near future, and I found that inspiring.

Q: What plans does Linden Lab have for educators who want to use second life as a virtual classroom?

A: There’s actually a vibrant community of educators already in Second Life, and we’re happy to see it continuing to grow. We’ve seen a range of academic and educational uses of the platform, from research to modeling to distance learning to real-time collaboration, and we offer a program called Campus: Second Life, which provides semester-long virtual land grants to educators that want to try teaching in the virtual world. Additionally, we have a very active e-mail list dedicated to education, on which Residents discuss best practices for in-world educators.

Q: How do people find the time for a Second Life? It seems like most people are too busy working multiple jobs and trying to keep up the payments on their credit cards and upwardly-adjusting mortgage payments.

A: Quit your real job and get one in Second Life! It isn’t possible for everyone, but there are more than 40,000 people who make money in Second Life every month.

Q: Are there any virtual goods which actually cost more than their real world counterparts (at Linden dollar/USD conversion rates)?

A: What a great question! Well, not too many yet, but unique items like virtual clothing from top designers have been sold at in-world charity events for thousands of real dollars.

Q: What has your experience led you to believe about the value, or lack thereof, of having a game-like goal orientation? Would you agree that most activity in SL involves games that people have created out of the materials available (i.e., running a business, speculating on real estate, trading custom content)?

A: People in Second Life have created over 1 billion in-world “objects” occupying total storage space of about 100 terabytes. I wouldn’t agree that these are mostly game-like; most derive their value from their intellectual, utility, or artistic appeal. If anything, Second Life is more diverse than the real world in terms of types of activities, not less.

Q: Why not open up Second Life and allow it to run on game consoles?

A: It is a great idea! We’ve open-sourced the Second Life client software in part with the hope that we can get it onto things like game consoles faster.

Q: If you do open-source, how will you make money? I’m sure there are a lot of developers waiting in the wings for this to happen, but can it be a win-win situation? Is an option like finding a middle ground between open API’s on one end and completely open-sourcing the code on the other a more realistic probability?

A: Because of the network effects that will tend to cause most people to prefer spending their time and doing their business in one virtual world, we think we can have a great business, even in a very open source/standards environment.

Q: Second Life is a fantastic place, and one of the reasons is the freedom residents enjoy to create their own environments. On the other hand, for those who are not yet experienced in Second Life, the learning curve is steep and a lot of first-time visitors seem to get lost. Do you consider it a task for your company to make Second Life a more welcoming place for newcomers, or should this issue be tackled by the residents themselves?

A: A little bit of both. We need to design the software to be friendlier, easier, and more pleasurable to use. The open-sourcing of the viewer code will definitely help with this as well – we’ve already seen a full alternative Second Life viewer created by a third party. But people are already making the content experience in-world better and better, which is exactly the idea behind the Resident-created world.

Q: Do you have a Second Life alterego?

A: Not one that I will tell you about 🙂

mikeD Streeter

Just a couple points and comments, yes many people do earn a very good living in second life, those who focus on quality items and know how to market seem to rise above, put the same effort that you would in your normal job and within a couple months you could probably realise the same income. The true reason in my mind SL hasnt had a higher retention is the absolutly confusing orientation centre starts award program most get stuck in orientation forever, then when you do pass they drop you in a welcome centre where not one linden employee is present, many in the community go there to help and of course to increase traffic and knowledge of thier places but honestly secondlife needs to hold the newbies hands a little better in the beginning and I bet you more than 1/2 that usualy quit would stay.
Anyone who wants to can IM me inworld and either I or an employee of mine will help you out anytime


Marly Milena

It is interesting what an emphasis there is on the commercial aspects and possibilities on SL
I go there to get away from all that, to meet people from all over the world,to create and witness the creativity of others, to revel in the potential of invention over time, to find music, art and other expressions that I would never have access to otherwise---and to do all this for free! What a bargain! I am also fascinated by the sociology and psychology of the place. Lots of gratuitous civility with the shorthands TY and YW. I am interested in seeing whether this can be a vehicle for cross-cultural understanding and a new way to promote peace and good will.

--Posted by Marly Milena

Bev Jenkins

I tried SL for a while, and might have a look back there again. My big problem is, I just don't get it. Unless you want to engage in sexual activity, or you are a computer whizz who can make cool stuff to sell, there just doesn't seem to be much else to do. I know all of you experienced SL buffs are not going to understand this, but for newbies there just doesn't seem to be any point.


What is going on here?
If this is all fake(virtual) how can anyone make money? How can anyone be doing this and make money?
Isn't the land and islands they are selling fake(virtual) existing only as drawings on the internet server? How can anyone live on that fake island or build a house on the fake land?
What is linden? what is going on here?
is this sane?


to aish,

not sure if it is sane or not. SL is a virtual reality - but only the basic stuff is free (a person with very little clothes and a limited body, no stuff and no home). If you want to set up a virtual home for your character you have to buy land and a house and furniture. You can also buy improved clothing, accessories, and skills for your character.All of this costs linden dollars. To get Linden dollars you buy them with real dollars OR you sell stuff in SL. So people who are good at programming can make furniture or clothes or tools and sell them in SL. The money they make in the game can be used in the game but it can also
be exchanged for real dollars ... hope that helps


to bev.

I myself enjoyed sl from day one. Any interest you may have in real life, there is a group in sl to match it. Some groups are more active, some less active. If there is not enough action in your field, just get involved yourself, organize some activity and definitely other people will join and will be grateful.

By the way. You do not have to be a whiz to build, especially things you do just for yourself.

Hope I changed your view about sl.

Txemator Tenk

Mr. Rosedale, I am still waiting for an answer of Second Life staff telling me why they used my credit card to charged me undue U$S25 for several months. They just disabled my account, nobody answers my enquiries, and the fact is at first at SL one had a fast way to comunicate with staff members, now is nearly impossible. It is like a bank, we have became just numbers. We are no more avatars, we are puppets. It seems it has become a good bussiness, so I am NOTHING for you, just a disposable puppet. Also if you don´t speak perfect american, you are done man. I thought it could be fun, but no more, it´s just like what my ancestors made with the american indians, show them some mirrors and took the gold home.
I hope I have contributed so you can enjoy perhaps a new Escalade.
Dissapointed, cheated, sorry but my english is poor as to find more adjectives.
Wish you the best for 2008.
Enjoy my inventory.



Im using 3dsMax, and i love it.
I have a lot of good 3d models with textures.

Please make something about the use of 3ds max model an textures in second life. thanks

Txemator Tenk

Hi Mr. Dollardale.
Anybody at home?
You will need a Third life to get rid of me.


glad to see some good answers.
im tickled that my answer got in!


Eh, I guess he believes in his product, but this Q&A did kind of turn into a PR stunt for SL. If I wanted a big list of how many things are great in Second Life and how everyone should be there, I could have stayed on the Linden Labs pages. It seems that Rosedale ignored some of the harder questions and gave overly rosy answers to the questions he answered that could have been more interesting.

Prokofy Neva

I see Philip Linden ducked my question about whether he believed in God, whether he considers himself god-like (he has talked about this), and what then the restraints on him should be. I'm not surprised. I will keep asking it, as I think it's important to find out the views and philosophies of people who have such tremendous influence on the world with a very powerful machine that will change the way people think.

I'm not finding the answers to the questions about open-sourcing the server code (as distinct from the client viewer, which was already done) very persuasive. It's been nearly a year since this was first discussed openly in February 2006 at Davos, and indication was given that open-sourcing could have a serious effect on the virtual land market.

Just assuming that people will stay on one virtual world platform because it was first and biggest isn't enough. There has to be a compelling business plan, and there have to be assurances that intellectual and virtual property established by the residents of SL are protected not only by forcing people off the platform to launch lawsuits, but on the platform itself with meaningful and workable tools that both prevent theft and griefing (vandalism) and devaulation (16 m2 sign extortion and land bots).

It's a bit scary that it takes the real-life major newspaper of record, The New York Times, to put questions -- and get answers -- from our game-god, who has not spoken to us residents of Second Life since August 2007, when he gave a keynoter at the SL Community Conference about plans to improve performance of the platform.

Now that the CTO has been fired, I really think it's time for Philip Linden to come inworld and hold a town hall, and answer questions in Second Life itself.




"Quit your job and start one in Second Life!"

Whatever. Even the author of An Entrepreneur's Guide to Second Life found about two dozen people who make a full-time living off of SL.

Some questions I would like answered:

1. To what extent is SL's growth dependent on the sex industry?
2. What is your *actual* user number, not just total signups? A good figure would be "number of users who were active a month after signup."
3. Does getting rid of Mr. Ondrejtke mean you're getting rid of the Virtual Property rhetoric?

Ryan Baker

Nice questions, intriguing answers!

I have a question (I know it's too late, but maybe some Second Life staff will look here) -- some percentage of the population (including me) cannot look at Second Life for more than about 5 seconds without getting vertigo and nausea. ("Simulator sickness")

Will Second Life eventually have facilities for the disabled? (Both simulator sickness and the visually impaired)

Peter Dunkley

This is for Kevin, really. There are quite a few of us that make a living in virtual worlds. Our business is based in Second Life and we run all our projects out of a virtual office in world.

Almost none of our income is counted in the stats, of course, cos most of our clients are real world businesses. We have grown four-fold over the last twelve months - so it's certainly not as daft as it may seem. And we have nothing to do with the se industry!

Prokofy Neva

The New York Times needs diligently to put an investigative reporter on this issue (not just bloggers) of whether or not you can "make a living" from Second Life. There is an enormous amount hype -- and subsequently debate -- about this.

The makers of Second Life -- Linden Lab -- rather airily talk about 40,000 people who make profits above fees -- but you can see from their own statistics page that this can mean part-time Wal-Mart workers who make $5 or 50 or maybe even $500 US a month from their dress store which they use for gas money in real life -- not "to make a living". There are only several thousands -- with several hundreds in the high end -- who can make anything like a living within the world of Second Life itself, but their costs are immense.

If they are in the land business, they pay very hefty server maintenance fees every month, after initial purchase, to Linden Lab. If they are in the design or service businesses they usually don't bill their own time at anything remotely like a real-life living wage and of course have no insurance or pension as self-employed contractors. Yes, there are people who make $20,000 or even $60,000 US each year, and depending on their location, can "make a living," but the open issue is whether their skills applied in real life would make them a better living.

Those who brag that they make money outside of SL, not within Linden dollars, are also a kind of flash in the pan that may only be indicative of an early technological gold rush, and not persistent -- it's hard to tell yet. Design agencies that serve as kind of sherpas to bring in gentlemen explorers from very large companies like CBS or Sony or AOL or Pontia or medium companies like American Apparel can temporarily make money off these clients in building out their islands and content in Second Life, and command huge fees for this. Yet those big clients are starting to leave SL, not having been able to overcome the considerable hurdles in the use of the platform, which mainly involve the obvious factor of needing live, engaged, paid-for and backed-up personnel 24/7 to interact with the community and content to give people the experience they expect in a 3-D world.

These metaversal agencies are starting to go to other worlds like Gaia or There designed PG for teens and children because the content is controllable and that means the advertising space is controllable.

Large companies like IBM and Cisco can likely afford to spend -- not make -- money from SL as R&D and PR work that positions them at the cutting edge and gives them a lot of ideas and contacts to make their own proprietary technology and services.

What's exciting about Second Life isn't that it has big companies in it or tekkie contractors who can make a buck, or that i makes people rich, or makes them a living, but that it is an open-ended platform that has a very low threshold of entry for many people all over the world in different countries, at different economic and educational levels, and enables them to accelerate their learning and income production above expenses in impressive ways. In time, I think it will prove a place where people can make more of a living, when it is valued more and the economy is less controlled artificially and the governance is improved to protect value.


ala caproni

if i format my computer and put sl in again how cani do it without making a new account? please explain i need to format my pc thank you

Scott K.

Strong agreement with the above comments about Mr. Rosedale's statement that "there are more than 40,000 people who make money in Second Life every month." Linden Labs has a bad habit of emphasizing favorable statistics that don't tell a whole truth. The implication is that there is a real chance of profit in SL. Sure, it's relatively easy to make a few real dollars a month there, but this might represent many, many hours of time investment, not at all proportional to the profit made. Making any kind of living from it is extremely difficult and only a handful of people have been able to do so through luck or particularly outstanding design and marketing skills. SL has attracted many entrepreneurs and watched their virtual stores go empty because the other half of the story is the extremely favorable numbers of users reported. Millions have signed up, but only a few thousand are very active. Most people grow bored with the world quickly. Linden Labs continues to survive mostly through hype.


Steven Tom

I think a certain parallel can be drawn between the early development and implementation of the World Wide Web and the emergence of Second Life as a virtual marketplace. Most serious attempts at e-commerce were dismal failures if you'll recall, with investors and entrepreneurs losing their shirts, and the few success stories consisting of the more "unsavory" aspects of our society and culture, namely internet porn. It will be interesting to see if the Second Life "community" can ultimately reach the critical mass necessary to transform it from a virtual curiosity into a viable marketplace.

Rodion Resistance

The main reason why some people dislike Second Life so much, and almost constantly paint a bleak future of these virtual worlds, is because when it first came out, it painted a picture for some of these people, of an "ideal" and "perfect" virtual world. And when the ugliness of the real world started to seep into the virtuality (and this reality DOES include the current instability issues, because no matter how perfectly you run things in RL, things still tend to go wrong), such as sex, gambling, etc., they started saying "Hey, hey, hey, I got into this world to get away from all that c***." and so they quit SL when they realized it won't be the world they pictured in their minds. But in my opinion, SL becomes more "Second" Life, BECAUSE of the instabilities, BECAUSE of the stalkers and griefers, BECAUSE of the profanity and drama and bickering, and violence, and lewdness. But to balance things out, there is also compassion, sincerity, friendship, understanding, praise, encouragement, even love, that CAN BE found inworld. Why? Because Second Life, like real life, is all about BALANCE. Have a good and balanced day to you all.