Philip’s Newsletter

The Linden Dollar is the digital currency of Second Life, which has been used by millions of people over the last 20 years to trade around $10 Billion in virtual goods and services. It has maintained a stable exchange rate against real-world currencies through a unique set of policies including a basic income. It came into existence six years before Bitcoin, and provides real-life jobs for thousands of people. As a digital currency in a virtual world, it has provided a unique opportunity to learn about how economies work (and sometimes how they don’t work). I thought I’d write down a history of some of the fun that I could remember here, in preparation for a talk I’m giving at the Consensus conference.

This very early picture from the earliest days of Second Life shows a makeshift bazaar where the typically hilly land was lowered and flattened, and people brought things they had made to a common area to sell to each other. What you can’t see in the image is that many items in Second Life are ‘self-vending’ - meaning you can click on the object and buy a copy for yourself.

Unlike a typical video game, where you navigate some constraints to reach a goal, Second Life is an open sandbox world where you can build almost anything, together with millions of other people. There is a set of building block shapes (called ‘primitives’) and a programming language letting you make anything - from a pair of sunglasses for your avatar, to a piece of furniture, to a motorcycle you can ride around with a friend on the back.

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