Way back when, in 2004 and 2005, SL was small. With a small number of exceptions, including but not limited to Anshe and Prok, few people were making real money in SL. If someone failed to deliver goods, or a vendor failed, the chances that you knew, or knew of, the person was very high and the vast majority people would willingly replace such content.
Today there are more and more people working for RL wages in SL. The grid is huge and the chances you actually know all the vendors you frequent are minimal. Increasingly people are not replacing lost content, sadly at a time when the grid's problems are making it more and more common for this to be needed.
In addition there are more banks and stock-exchanges that manage money directly rather than offering a clearly identifiable product, and allegations that these are all ponzi schemes and similar are hard to refute, or prove, and there is currently no regulation.
In fact, in an interview on sloz.info, LukeConnell Vandeverre answered a question about the risks of fraud thus:
I have to stress that this cannot be taken too seriously by people as it is a fictional market with virtual companies built on avatars using a fictional currency and therefore the expectation of real life governance within a short time is not possible. It is the investors responsibility to decide what to do and don't do with their Lindens.
Unlike the person that bought this to my attention I consider this to be a very ethical response: LukeConnell is clearly telling a truth, albeit an uncomfortable one for his investors.
But, in the comments about lawyers in SL, someone points out that lawyers are there for contracts, and protecting us from the shysters amongst other things. So, I'm just askin' are we getting big enough, and with enough RL work and SL tricksters to start needing the lawyers too?
1. I think it's big enough that we need to think about what a real SL justice system looks like (and to large extent, hands are tied to LL's abuse reporting "system".) Adjudication, enforcement, punishment... these things need to be designed by regular residents and not attorneys. We need to start with the system, not just introduce attorneys. (And I'm not trying to be smarmy and negative about attorneys, it's just that I think they bring their own self-interest into it. Look at the money managers at WSE--present long before there are enough companies to actually support mutual funds. The collective of just plain residents needs to be paramount.)
Posted at 8:03AM on Apr 25th 2007 by Alexander Burgess