Banking and the tragically stupid
I am sure I will take some heat on this, so let me say I’m sorry for your loss … unless you were stupid.
First some full disclosure, I had a Ginko account for a few months, and I left about a month before the crash. I never had more money in there than I cared to loose, after all this was a complete stranger, there were no controls, no government insurance, no information on what was done with the money, or how money was made. So one day I went, hey a complete stranger has my money, mmm, I’ll create an ALT and put my money there, no interest but I control my money. See I bank because if I have it I’ll spend it, kinda like RL, except I don’t ever upgrade the sex bed and penis in RL …. (Thinks about the possibilities) now that this is out of the way, on to the stupidity.
Blogshpere
Ok, yes it is kind of a big deal, but let’s run some numbers. For the sake of argument and easy math (not my strong subject, we will say that there are 500,000 active residents and 1% of them have an account with a bank, that’s 5,000 people, that’s a big number to be sure, but it is 1%. However, it also means that 495,000 of those people weren’t affected. My guess is the number of affected is less than that, many of the people who put money in banks would have pulled out before the ban, after Ginko or not even come back to SL for whatever reason. So Blogshpere, why does this get more digital ink then?
affected)*
of those calling back)*
* All statistics were made up and have no basis in reality, like a virtual bank
I could go on but I think you get the point. I’m guessing the reason is some over all pretend sympathy, desire for fantastic headlines, useless insight in to the world of “Virtual Banking with Complete Strangers”(VBwCS) industry, and well everyone else is doing it not me (of course I am in that boat to, hypocrisy can be good for the soul?)
Business Owners Who Lost Money Because of this
I need a place to keep my lindens until I get enough to pull them out. Ok first, I want anyone who runs an RL business to let me know if they move their money daily to someone’s house, just until they have enough for the bank, or better yet, just gives it to some guy on the street with a sign that says “Will hold your cash, I’m trust worth and have a website”.
Oh but the transfer fees you say, well you could create an alt and move it there, and move it out of world in large clumps with no worry of walking around the grid with a large wad of lindens in your pocket. But it doesn’t pay interest you say, well by some strange freak of the RL, my RL bank pays me to keep the money in there, you could move daily, however you want to track your money. But no, we will give it to a VBwCS that is a brilliant solution, they will pay interest, I’ll make tons! However I would point out, that interest only works if you can withdraw your money. Having 1 linden in your pocket is still more than having a million lindens you can’t withdraw. This group I just can’t even get remotely close to generating an itty bitty drop of a tear, this is a bad business decision, and shows a pretty serious lack of judgment, and if you were with Ginko and got screwed again … what can you say other than, please step out of the pixilated gene pool.
Former Ginko Customers Who Got Screwed
Ok, let met get this straight, you gave money to a stranger who screwed you, and then you took your money and gave it to a different stranger, who is now screwing you, or about to. One second, going to check the sympathy meter … damn, its pegged at some where below the low temperature of Antarctica and absolute zero, however the stupidity meter is some where around I have a bridge to sell you and trust me I’m from the government I’m hear to help.
The Bankers
You little bastards, and why do I hate bankers in the RL? Cause while my money is reasonably safe and secure, you get more out of it than I do … $3.00 ATM fees … get bent! But you know what, the virtual version of you is worse, not only do they screw you in general terms, they just steal your money. You are the underbelly of the economy and honestly haven’t really contributed much other then pain and misery. I know, I Know, you are saying we funded these builds, and sims, and that’s bullshit! You took the money spent it on yours and your friends pet projects and lied about the returns, potential or other wise. You have done more to undermine trust in fellow man that most griefers, at least you can explain them as idiots and script kiddies. How do you explain you? Shallow, greedy, Liars, and Thieves … wait that worked pretty good, but I missed scumbags, con artists, and several word that I’m not allowed too use here. This was straight up fraud and or theft. Each and everyone one of you should be permabaned from SL! I don’t even want to hear about how you will try and make it up to each and everyone, its more bullshit and spin, you are trying to get the best PR you can, so one of the tragically stupid who had their money at your bank doesn’t sue you.
Investors
Your next, you’re going to get taken by the exchanges, it will or is happening. Either the exchanges will be shut down, or one day the money will go missing, but a loss is a loss, either way.
After all of that I feel better, I think that Linden Labs should step up to the plate and get peoples money back, but I think that there is no way to fairly do that, the records are destroyed, or not good. Sometimes a loss is what it is. This whole thing has been the result of failures on every level, and most specifically a failure of common sense by those who have put money in banking system.
Hmmmm, I wonder how much this will increase griefing at the sandbox
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VSTEX statement
The VSTEX keeps a 100% reserve for deposits, 24/7. We never payed investors any interest or return rate on them, hence we don't need to invest the deposits in order to pay those interests.
That's why we kept our ATMs available through the "run on banks" affecting several SL financial institutions.
Investing on a virtual stock exchange is not like placing money in a bank. As soon as you buy virtual shares of a virtual company, those shares may indeed lose value.
Except for that, every L$ placed into our ATMs is a L$ that can be got back anytime.
Samantha Goldflake
VSTEX Communication and Public Relations Director
http://www.vstex.net
Get a flame-retardant suit
Arthur, I suspect each of your title groups will be responding in numbers, so I'll keep this short:
I could count myself in the blogosphere group (http://swassets.blogspot.com), but more-so for the fact that I read a lot it. The reason this is such a great rag-doll at the moment is people actually lost money. It's fine for us insiders who know "how" and the "underlying-stupidity" involved, but to those who are uneducated on the matter (which is who the mud-slingers aim their news at) this is a simple "innocent people lose their money to 'bank' theives". Sounds like a PR nightmare from a business perspective and a typical glossy mag kind of story from an individuals perspective. If you are an optimist like me (and I will cop a burning for this one:), you may think that Virtual Stock Exchanges, based on Virtual Companies in Virtual Worlds (Nobody, insert 'Synthetic' instead of Virtual above), are a vital part of a Virtual Economy and are betting (sorry LL, hedging) on them becoming the biggest thing since sliced bread.
Business Owners, like myself, were well aware of the risks involved, as most will be due to LL's strong-arm (look at Gambling, land gluts, the cash injections etc) I am hoping that this will promote consortiums of good business owners to look into possibilities in this space. I love the idea of Credit Unions myself. We were discussing this recently in WSE Chat whether or not this would fall inside LL's new banking rules.
Former Ginko: just a quick correction, WSE stepped in to assist. No one willingly "gave" their money to the WSE from Ginko, they confiscated Ginko assets on the exchange and attempted to re-issue those to ex-depositors. Let's face it, it was better than Nicholas running with the lot! (6% return is better than 0% ROI)
Bankers: Not a reasonable term for "all" of them. Some are doing ok still, which is showing that not all are Ponzi's. Good luck to them. To the others, lets call them "theives"
Investors: This one is me too, and I don't agree with you. This is still such a green-field and I am proud to be part of it. There is something exciting about being a first mover and admittedly the risk is increased. I know I speak for many fellow investors when I say that I am looking forward to the WSE re-opening and showing up all the nay-sayers (i really want to throw the 'luddite' term around more. I dont think it gets used enough)
Sincerely,
Logansan Oh
Yes People Lost Money
People lost money, and that is a shame, but it was of their own willingness. People have the choice to use their common sense or not, this was a not, and more so after Ginko. Also, how many last money, 10% of all Avatars? 1%, .1% I don't know, but I'm guess that more people have teleporting problems than lost money with all of the banks together.
Ginko - The WSE Confiscated assets ... under who's authority? In who's best interest was that? Have people been paid back? do they have 100% of their lindens available? No they don't, but they might get something some day, a return on their investment ... the PR is good though, you'll get a return on your investment. yes if you dont' get your lindens you have a negative return.
WSE - Ok, if I'm correct they are down for an audit. What company is performing the audit? If none, then who is conducting? What is the criteria for the audit? Who is verifing the information? Those that have account balance changed while they be told why? Will there be proof? What controls are in place to ensure that the operation is running correctly? I'm sorry with the controls SL has you can't verifiy anything. If everyone gets screwed in this deal, I will laugh hard at those who thought it would be different. Now, do I hope I'm wrong about this, yes I do!
What does the term luddite have to do with anything with the bank industry in SL?
luddite: one of a group of early 19th century English workmen destroying laborsaving machinery as a protest; broadly : one who is opposed to especially technological change
I'm not afraid of technology, though I am against its use in theft, but I feel the same way about the use of rocks in theft.
Arthur Fermi
Fermi Sandbox & University
www.fermidesigns.com
Synthetic. Heh. Correction on Ginko, Though...
Thanks for the note on Synthetic. I caught it, and I actually appreciate it - even if it was tongue in cheek.
Correction on Ginko/WSE. You wrote:
No, no, no. WSE did not step in to assist. WSE stepped in for its own reasons. WSE permitted GPB in the first place, and WSE was very closely tied to Ginko Financial through HCL - 9 million and 1 ways, minimum. At the time, the person who was later run out for his misdeeds - the fellow behind AVIX, Sal - he turned down Ginko's deal.
WSE doesn't ever do anything to help anyone but itself. Please don't forget that. :-)
Second Life Consultant
As in RL, such scams will
As in RL, such scams will continue, for the very simple reason that there's no disincentive - whether a bank has one employee or tens of thousands, if the decisions made by those controlling it are aimed primarily at lining their own pockets, the outcome will be the same. The ongoing financial meltdown in RL demonstrates that well - this was nothing unforeseen, not triggered by some fluke event, but designed to yield as heavy a return as possible to those controlling the funds in question, however insanely reckless the underlying logic. Who will be the last to leave said institutions, and if they're somehow forced out, will depart with a golden parachute of tens, or even hundreds, of millions of dollars. How is it in their best interests not to continue? (As related by Bremner, Bird, and Fortune here. I'd say it's a work of satire, but it's a little too close to the truth for that)
The issue isn't whether a bank is "real" or not. Many people happily conduct their banking entirely online, money deposited directly in the account regularly, often debited automatically to keep the telco and utilities happy, and monitored online. Rather, it's an issue common to other online settings, but RL as well - a matter of trust. What confidence do you have that the person you've just given your money to will do what they've claimed? (By the same token, when there are multiple grids, how will Linden Lab be able to be sure that any L$ coming into the grid haven't simply been conjured up by a rogue operator? Most likely very few grids will have such asset transferability, but I'd be surprised if the number counted Linden Lab and no other)
In investment scenarios, it would seem auditing would be the key. Not that even those kinds of safeguards are foolproof, as Enron and Arthur Andersen demonstrated quite well, but for the most part, they're a highly useful tool in developing and maintaining trust.
Whither SL banking? It's dead. I wouldn't mind seeing credit unions coming in, rather than banks, but for now, it's difficult to see the amount of money involved being of any real interest - they'd spend way more simply on investigating the legal issues involved. Still, it's maybe not outside the realms of possibility that one amongst them might set something up as a "hobby" of sorts, offering a safe place to keep one's L$, without incurring the fees involved in shuffling between currencies.