Even virtual economies are bearish: Second Life bans banking

In August Linden Labs, the creator of Second Life, banned in-world gambling for legal and logistical reasons. Now the company has banned banks, further tightening restrictions on freedom in the alternative on-line universe.

One of the problems with gambling was that Linden Labs had no way to regulate it and insure that virtual slot machines would actually pay out. Banking has run into similar problems: in August virtual bank Ginko Financial went under, causing Second Life residents to lose an estimated $700,000 U.S. dollars. Many S.L. banks were little better than Ponzi schemes that offered unsustainably high interest rates.

Though many residents were supportive of the move, others have protested: one commenter complains, "SL has become a world of regulation, not imagination." Another commenter's response? "If this new policy is something that inhibits 'Your Imagination,' remind me to never have any business dealings with you…ok?" Amen.

Second Life Blog, via Technology Review