L$ Exchange Rate Data 2004, 2005, and 2006
Tuesday, January 2nd, 2007 at 11:22 AM by: Lawrence LindenBy popular request I’ve put together the GOM and LindeX L$ exchange rate data for the past three years.
Recently I’ve had several requests for exchange rate data for the L$, so I’ve dug up the data GOM provided to me and grabbed the latest LindeX data and put together this graph. Unfortunately I don’t have the volume data for GOM.
Click the chart below to zoom in.
The data behind this chart can be downloaded here.
Cheers,
Lawrence
January 2nd, 2007 at 11:26 AM
come posso fare x entrare a far parte di second life?
January 2nd, 2007 at 11:30 AM
Cool..Now i can see how much ppl are spending XD
January 2nd, 2007 at 11:31 AM
The question everyone is bound to ask is how the resident numbers ties in with the L$ volume. Is that data available?
Broccoli
January 2nd, 2007 at 11:34 AM
wow
you’re so smart =)
～★★ ★★～
★ ∴ ★ ∴°★
★ °★ ∴°★
★° ° Happii New Year 2007 ★°★
★’ ‧ °∴°°☆ ☆ ★ °∴° ∴°★ ☆
★ °∴°°☆°∴★ °☆∴聖°∴ ☆
★ °∴°°☆★∴°∴ °誕°∴ °☆
★°∴★☆∴°∴ 快°∴ °☆
★ ☆∴ 樂°∴°☆
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January 2nd, 2007 at 11:35 AM
Very interesting to see that Linden clawing its way up in value =)
January 2nd, 2007 at 11:45 AM
spending changed with the lindens changed the rates making us spend more buying less if you notice the the gap , so stop complaining about free accts it doesn’t have anything to do with free accts its how lindens and people got greedy all around .
January 2nd, 2007 at 11:56 AM
Is it possible to sell the L$ short. Who at LL can I contact to ask this and a few other questions I have about trading in the L$?
January 2nd, 2007 at 12:12 PM
The axis are slightly misleading- the exchange rate is increasing down the page, so it’s more like a graph of the strength of the L$.
It shows a slow but steady decline in the value of the L$, albeit with some fluctuation.
January 2nd, 2007 at 12:15 PM
It would be good if yer graph and subsequent Data images were done in a higer resolution, something like, Oh I don’t know, BIGGER THAN A POSTAGE STAMP!
January 2nd, 2007 at 12:33 PM
I started SL in late 2004 and at the time the rate was 254 to the dollar. now its 267. i have seen it as high as 220 but that was before the Lindens decided that they should screw over gom and make a market where they can produce money at will and sell it when the price got high enough. As far as i can tell LL did nothing but keep the value of the money steady or in fact lower it. by this time i would expect it to have risen quite a bit considering the (cough) 2 million people in world Too bad they couldnt do that with the land prices too
January 2nd, 2007 at 12:50 PM
[...] (more…) [...]
January 2nd, 2007 at 12:57 PM
Lindens don’t change rates. People selling do.
January 2nd, 2007 at 1:35 PM
The money grows with the people
Grtz ~Zona~
January 2nd, 2007 at 1:50 PM
But do you have the data for a piece of land?
Example, a 512m piece of land’s average price over time. (and how about prims data)
And some history on land in-world….
Have the tiers always been your first 512m free, the next 512m is $5 per month, 1024m $8 (USD), etc….?
It didn’t take me long to find the 117 prims on 512m isn’t enough and I’m not sure that it’s worth the cost long term. It really should be double that for people just entering SL with a premier account.
January 2nd, 2007 at 2:26 PM
Why does every single player call L$ “lindens”? They’re LINDEN DOLLARS — NOT “lindens”. Lindens are people that work for Linden Lab.
January 2nd, 2007 at 2:39 PM
its obviously because were lazy…. quick, lets all conform
January 2nd, 2007 at 2:40 PM
Gannon Get Real! You have to find something silly to post, just about everyone and his/her brother knows what is being said. Stop being so picky.
January 2nd, 2007 at 3:27 PM
Gannon>
Why do so many (such as yourself) call other people here “players”, as if SL is a game?
January 2nd, 2007 at 4:10 PM
for the same reason we call Canadian dollars “Loonies” and “monopoly money” rather than Dollars. Given the recent US Mint action against NORFED’s Liberty Dollar, it behooves people to not claim their private medium of exchange is ‘currency’, else run afoul of DoJ prosecutors with money to burn and lives to ruin.
January 2nd, 2007 at 4:15 PM
Ok, if everybody else calls them “lindens” then that would make it normal, right?
January 2nd, 2007 at 4:16 PM
oer Massimo:
dai un’occhiata a http://www.secondlifeitalia.com : puoi usare il Forum per chiedere informazioni in italiano, proveremo ad aiutarti.
January 2nd, 2007 at 4:27 PM
VinnyElderslie, SL can be considered a game in which each player sets his/her own victory conditions. (There was an article about that in the Metaverse Messenger last summer.) To some, the victory condition is to accumulate as much FL money as possible. To others, it’s to build clever and/or beautiful things, and perhaps sell some. To others, like the Star Trek folks, it’s a place to host an RPG. To the folks in Neufriestadt, it’s a place to experiment with creating a democratic government. And so on, for two million reasons.
January 2nd, 2007 at 4:28 PM
Just curious - is the amount of L$ fixed, and if so what factors play into releasing additional supply?
If L$ are in unlimited supply, why then does the exchange rate fluctuate? I would think over time there would be a serious mean reversion to somewhere to in the current range that appears to be the steady state mean.
January 2nd, 2007 at 4:31 PM
Thanks Lawrence
Have a great 2007
January 2nd, 2007 at 4:47 PM
Now that SL is more international, more cosmopolitan, maybe we could exchange Linden dollars directly into other more stronger currencies such as pounds sterling or Euros seeing how the US$ seems to be having its value about every second year? Would have thought it might be in Lindenlabs interest to invest other currencies?
January 2nd, 2007 at 4:51 PM
I always called them “Lira”….
January 2nd, 2007 at 5:04 PM
You can call them lindens, linden dollars, dollars, bucks, money, we got em……………they want them, for land or services………….and no mater how you “roll Play’ in this “game”…………….we all find out everyday just how much like real life it is…….nothing is perfect……in world or out………….so enjoy it while it works……………..enjoy your RL when it doesn’t, and keep them money units rolling………..it makes both worlds go round!
January 2nd, 2007 at 5:38 PM
Hmmm… Data shows L$30 to 45 million a day! that is equivalent to US$100,000 a day. And it does get exchanged… so, this is not just a game, it is fun that has an established actual and significant value. Wow. I am convinced that this is the next evolution of the internet.
January 2nd, 2007 at 5:45 PM
Geez….all this excitement over “fake”,”vitural” money……pppfttttttt.
January 2nd, 2007 at 5:58 PM
hmmm I love the way the L$ exchange rate axis is inverted… making it look as if L$ have increased in value against the US$…when in fact the opposite is true! (AND the US$ has fallen over the same period in RL!). Creative sccountancy at it’s best
January 2nd, 2007 at 6:01 PM
OOPS I got that wrong!!! Buy L$!!! Buy buy Buy!!!
January 2nd, 2007 at 6:33 PM
“hmmm I love the way the L$ exchange rate axis is inverted… making it look as if L$ have increased in value against the US$”
Uh, they have. That’s why it’s requiring fewer and fewer L$ to buy a US$. At least that’s been the trend for the last half year or so.
Think about it. When the Linden dollar is stronger, it takes fewer of them to buy another currency. Thus, a decrease in the number of them per US$ indicates an increase in their individual strength. Thus, the axis is inverted to correctly point out that, as the number of L$/US$ gets smaller, the L$ is getting stronger.
January 2nd, 2007 at 6:37 PM
Dark: Huh… that’s funny… I made a similar mistake for a different reason.
I saw the caption that said that “L$ per US$1.00″, but didn’t notice that the scale had zero at the top and 700 at the bottom.
Scale must have been designed for old MUCK programmers who can’t deal with floating point values.
January 2nd, 2007 at 7:02 PM
The Lindex is about to be GOM’d !!!
January 2nd, 2007 at 7:10 PM
I just hope the $L doesn’t get too expensive too fast. I would have to quit. Right now it’s still like play money where I can actually afford to buy things on a whim. SL makes shopping fun.
January 2nd, 2007 at 7:41 PM
G’day
Thanks for the info -much appreciated.
Also can you please PLEASE stop the current unsolicited advertising (spam) currently happening in world. I can’t post this any where else and I have already had to file Abuse Reports this morning, which may not get a response for days and then may not get any action.
PLEASE - just post on the message of the day that dropping notecards promoting your own business on random people is against the TOS and is unsolicited advertising.
I have had four in less than 30 minutes - and some people receiving will think they can do the same. I am not interested in a new club that is opening or a wedding photographer.
This is Second Life not Spam Life.
Cheers
Alex Warrior
January 2nd, 2007 at 8:36 PM
[...] Linden was kind enough to post historical trading information for the Second Life currency over the last 3 years. I filled in the old GOM (Gaming Open Market) [...]
January 2nd, 2007 at 8:43 PM
“Hmmm… Data shows L$30 to 45 million a day! that is equivalent to US$100,000 a day. And it does get exchanged… so, this is not just a game, it is fun that has an established actual and significant value. Wow. I am convinced that this is the next evolution of the internet.”
I suspect Blizzard & NC Soft probably make that look like pocket money.
Why do people call them dollars when they are dollar coins?
Why do people abreviate words at all?
January 2nd, 2007 at 9:25 PM
Quote about L$ being called “lindens”: “Ok, if everybody else calls them “lindens” then that would make it normal, right? :D”
Well Lindens never call L$ lindens, because they’re not lindens. They’re L$ (read Linden dollars). But everywhere in SL you see “free lindens” and so on. It’s like saying, “I have 3 united states,” instead of, “I have [US]$3.” So I just wonder how it came to be that everyone calls it lindens instead of L$ (Lindens — people that work for Linden Lab — only type two characters instead of 7, you know). I also wonder why a huge number of people use “lol” instead of periods to end sentences, among other things. Clearly, normal people don’t care.
This is what happens when people in general communicate with a keyboard.
January 3rd, 2007 at 2:39 AM
the Lindens or Linden Dollars , “fake money ” can be exchanged for real cash in the real world.
that is why everyone is biefing about because people behind the computer are creators who are actually making a real encome and I hope are paying taxes on the money business they are doing or the irs will have a field day with some of you. And don’t forget Linden Lab by law has to report to the IRS just like everyone LOL in the usa LOL
January 3rd, 2007 at 3:04 AM
G’day
Good thing I am in Australia then huh?
Giggles
Alex Warrior
January 3rd, 2007 at 3:17 AM
Just had to have my say…
I call them Lindens because I want to. Have a problem with me excerising my right to freedom of speech, sunshine?
Cheeriebye.
January 3rd, 2007 at 3:37 AM
Does, LLabs, in fact, need to report L$ activity to the IRS? I have a friend in his 3rd year of law school. He’s been asking his financial law profs about L$. 2L is waaaay beyond the existing legal system. Why would anyone assume that 2L is physically located within the USA? If I sell to an Aussie, does the transaction take place within the USA? How about if two Aussies, who reside in the same city IRL, exchange goods? Do they need to declare a US$ barter-exchange value? If I make a profit in L$ (which have no physical reality, and have no government or precious metal backing) by selling something that has no physical reality, in a place (like 2L) which has no physical location, then has there been a taxable exchange of value? Personally, I and my friend are expecting the IRS as well as the folks who propose tax legislation to go absolutely nuts trying to deal with this situation. Heheh. Should be vastly interesting to observe.
January 3rd, 2007 at 5:20 AM
It is more useful, and clearer that the L$ / US$ scale be “reversed.”
In FOREX trading there is no correct way up with regard to scale. It will all depend on which currency whose value you are observing.
In the above case we are observing the Linden Dollar’s value. The smaller the L$/US$ number the higher the L$ value is.
Then there are two ways of labeling the scale, one is US$/L$ and the other is L$/US$. The former will result in figures such as 0.0033 US$/L$ which is more difficult to read than the equivalent 300 L$/US$
In summary, nothing wrong with the scale, it’s not “upside down,” the scale was properly selected such that the higher the graph gets, the higher the value of Linden Dollar represented.
January 3rd, 2007 at 6:52 AM
So really, all this graph shows is that yes, with 2 million residents (cough) you get more volume of exchange, but the ‘value’ of the ‘unit’ of that exchange hasn’t really improved all that much, and will probaly never again reach the value it had in late ‘04 when residents still had a sense that they were pioneers of a new world and not just guinea pigs in some nifty Web 2.0 experiment. It’s interesting to chart the effect certain policies LL have enacted on thier currency tho… lookie that spike in June of last year… folks really dug that one huh?
January 3rd, 2007 at 6:53 AM
That is the worst graph Ive ever seen. Sorry but my professors would have given me a D- for that.
January 3rd, 2007 at 6:55 AM
Filing an abuse report over a notecard that you can just hit an x on is the reason more serious abuse reports get buried.
Real police wouldnt come to your house everytime someone steps on your grass even though it is a tresspass. Just move on already.
January 3rd, 2007 at 9:16 AM
I would seriously doubt that LL has to report L$ activity to the IRS, as they state clearly in their terms that the L$ has no intrinsic value, not even that CASH VALUE 1/20¢ like the grocery store coupons. The fact that people assign a value to it beyond that, well, not really LL’s problem…. if you could actually get PEZ dispensers sent to your house for doing work in-world instead of money, would they be responsible to report that because you think they have value? Doesn’t even seem grey to me… seems they have complete plausible deniability…
Of course, that’s just my opinion, I could be wrong. I’m not, but I could be.
Now as to whether people should be reporting their SL income on their RL taxes, absolutely, just as non-grey. But as far as me believing that most people will actually DO it?….. we now return you to reality already in progress.
Mad
January 3rd, 2007 at 9:42 AM
In response to “Well Lindens never call L$ lindens, because they’re not lindens.”
a quick blog search re: SLRR
“* What do Residents get if they win a bid?
Each winning bid will receive 15,000 Lindens as payment for the completion of the station.”
Darned those lay persons using keyboards
almost forgot — lol
January 3rd, 2007 at 10:14 AM
GG Continental says: ‘I always called them “Lira”….’
LOL! I should have known I wasn’t the only one who used that term.
January 3rd, 2007 at 10:14 AM
Giff Graphs the L$
Giff Constable of the Electric Sheep Company (sponsors of this blog) has cooked up some nice graphs of the L$ currency used in the virtual world of Second Life, based on a new release of data from Linden Lab. The graphs clearly show things like the di…
January 3rd, 2007 at 10:47 AM
Pie Psaltery: “So really, all this graph shows is that [... a bunch of stuff that the graph doesn't show at all ...] It’s interesting to chart the effect certain policies LL have enacted on thier currency tho… lookie that spike in June of last year… folks really dug that one huh?”
First of all, changes in currency markets reflect many things, so the graph cannot be used to chart the effect of certain policies LL has enacted, although it’s possible to attempt to interpret certain changes as due to them (such claims are always unscientific, of course, being completely unverifiable of falsifiable — but that doesn’t make them not true or false). As for the change in June of last year, yes, people really did dig that change, which is mostly likely why the market stabilized and the L$ has grown progressively stronger ever since.
For those who weren’t around last June, the value of the L$ was starting to nosedive based on the widespread perception that LL was pumping too many L$ into the economy via stipends. Since the population of SL was starting to grow rapidly, this was a very legitimate concern; the more new users SL got, the worse the giveaways got. The change that brought an abrupt end to the nosedive, stabilizing the L$ for a few weeks, after which it started to grow slowly stronger, a trend that’s largely continued to this day, was the removal of stipends for free accounts and the reduction in stipends of paid accounts. Basic economics: stop printing so much free money, and the value of the remaining currency stops declining, and as soon as people start to believe you’re really serious about it, starts to improve.
January 3rd, 2007 at 11:08 AM
Actually, I think that the stability comes mostly from the LindeX stopping to operate when the fluctuation is too high
(see the page for the LindeX to understand the conditions under which this happens), as well as an effort by LL to keep an amount of money in circulation that is proportional to the number of “active users” — a magic number which nobody can figure out directly, but that represents people that do an “average” number of transactions per day.
The slow and steady valuation of the L$ over time is actually interesting since it means that there is always slightly less offer of L$ than demand, consistently, over months and months. This is rather surprising when imagining that the ratio of producers of content vs. consumers of content should be falling (ie. from almost 100% producers in the Beta, to 25%/75% producers/consumers these days). Producers of content want a strong L$ — getting more each US$ each time they sell L$ — while consumers will want a weak one — getting more L$ per US$. One would thus imagine that over time the L$ would slowly decline in value, as the ratio of SL approaches the one in RL (far more consumers than producers…). Since that apparently doesn’t happen, it means that LL is very good in making sure the amount of L$ in-world does not grow out of bounds.
January 3rd, 2007 at 12:01 PM
Interesting how you show the exchange rate axis in reverse, so that a quick glance makes it appear as though the value is climbing currently instead of falling…
As someone who only started SL last year, can anybody explain to me what happened around Feb ‘04 which made the exchange rate plummet from L60c in the US$ to a rough average of L25c? Is that perhaps when they opened the Lindex and made the currency more economy dependent?
I also notice that the rate started to climb again in ‘06 but has been falling again since around May/June. The open doors policy doesn’t seem to have positively affected the value of our money then. *Smirks*
Also, to OpenAndSayAh (and anyone who agrees with them) just exactly how little do you WANT to spend on 117 prims for a lifelong plot of land?! With the starting sum of L$300 (do people still receive that?) plus the first week’s stipend, you can own First Land within a week of opening your premium account, then flog it to the land barons for a tidy profit, or keep it for a tier-free, landlord free nest forever more - or at least until the Lindens decide to boot us all off mainland to rent from Anshe Chung and Nissan.
I call that a bargain, personally. Sure I could use more prims, but couldn’t we all..?
January 3rd, 2007 at 12:11 PM
@Gaius Goodliffe
OK just read a few further comments and saw your explanation for the inverted axis.
But…
Considering that I am not a land baron, casino owner or megamall proprietor and wouldn’t ever want to convert my L$ into $ unless I wanted to pull out of SL, how on earth does having a strong LINDEN make the residents happy? It just means we have to pump in more dollars to get our virtual money! Remember, the converse of a strong L$ is a weak US$ :-S And since in-world prices don’t seem to be falling, the tail end of that graph doesn’t look good to me.
January 3rd, 2007 at 12:27 PM
Geesh.
The chart is not perfect, but it is understandable.
The exchange rate is nearly constant, which is generally a good thing.
The one important thing is the *amount of money* changing hands. Sure, it is smaller than food and clothing and software which have obvious tangible value in the real world, but for an exercise in fun in an alternative existence and a new mode of using the internet, it is staggering. Yea SL.
And I hate the fact that the language is changing as much as the next guy, but it is. I just found out yesterday that the word Orange used to be Norange, and people contracted “a norange” to “an orange”. Same with napple. I have heard plenty of idiots saying ” a whole nuther” and no doubt some day “nuther” will be an actual word. I have decided to give up the fight and join these guys who put their food in the microwave, and spend Lindens.
January 3rd, 2007 at 2:49 PM
Just to comment on income taxes and as a warning to most people who are on the big money make; the real problem will be when L$ is converted back to cash and the transfer of this cash. I’m sure the US has similiar regulations to other countries where finiancial institutions and solicitors (Lawyers) have to report the transfer of large sums of money to the goverment organisation responsible for income tax (I believe the threshold in the US is $10,000?). In fact I think its worse in the US, any trading company has to report large sums of money received from a customer under your recent Anti-terrorism Patriot Act. These reports may not be copied to you and usually are automatic as far as banks are concerned which must surely include Lindenlab? If the reports are ongoing I’m sure you might find yourself investigated and will have to suffer an audit. Note that you can download from Lindenlab a history of your offworld and inworld transactions. Lindenlab are therefore doing you a favour against potential overzealous audits and over the top tax estimates, not to mentioned possible allegations of money laundering. When you sell objects, script etc you are being paid for a service, however unreal it seems and hence the income could be viewed as taxable. Back home my income from SL will be viewed as world income subject to tax how ever it was made. It would be recommended that you be totally familiar with the tax laws of your country. The fact that tax inspectors are not presently jumping on you now is a matter of policy rather than a need to change the law.
It a pity we can’t be real citizens of SL with a proper passport and so on. Especially the fact we already pay a tax on our L$ when we own virtual land. Or better still why can’t Lindenlab base it self in a tax free haven, preferably hot & sunny and we could all has some real fun with our respective inland revenue services.
January 3rd, 2007 at 3:17 PM
What about a chart how the other way round developed? How many L$ I can GET for one USD? That seems to get lower and lower continuously, I’d like to see a chart of that.
January 3rd, 2007 at 5:17 PM
This is a slight but related digression, and a pet peeve of mine. The bid and ask offers SLExchange lists in its order “book” have been listed backwards to the universal usage in financial markets everywhere (else). So you have the odd situation of what it calls “bids” being uniformly higher than its “ask” prices. What a wonderful opportunity for arbitrage if that were true!
in fact, what it calls “bids” are actually the asking prices of people trying to sell L$, and what it calls the “ask” column is actually the prices people are offering to buy them. It would be helpful to people to label the entries correctly. I know everyone can figure out what they really mean, but why should everyone have to? They should please label their market book correctly because what they do now is confusing and annoying.
January 3rd, 2007 at 7:42 PM
@irolan
You can read it off the chart as presented. The scale already reflects the number of L$ you get per US$. The L$ has gradually been getting stronger as of late which means, yes, less L$ per US$ if you’re buying. It’s been a seller’s market lately on the Lindex. The L$ buying force has been pretty strong the past few weeks and this will cause the Linden value to rise, just like it would have any currency or commercial product.
The fact that it has been steadily rising means the L$ has not yet found its equilibrium level.
January 4th, 2007 at 2:35 AM
I tend to agree with Aodhan.
With FOREX trading graphs do show a clear picture and it seems to me we have an improving Linden vis-a-vis the US dollar together with an increase in volume.
I think that is good for the virtual economy as most content creators should value a strong currency, and of course if the Linden continues to improve we could see price reductions for content and land, although of course the US dollar costs would remain more or less constant
Just a personal view
January 4th, 2007 at 6:48 AM
*Inflamatory posting follows - please do not read with your sense of humour disengaged*
Amusingly US-centric angst over whether to call the currency ‘Lindens’ or ‘Linden Dollars’. In the nord-European groups where I hang most people call them just ‘dollars’. It’s never caused any confusion that I’m aware of (besides - both are ‘funny money’ as far as we are concerned and more-or-less in free fall woohoo!). Do US-Americans have a word for Schadenfreude?
As for all this bitching about how the graph is presented - they’ve given you the data people! Draw your own graph if you don’t like theirs. If you can’t you wouldn’t be capable of interpreting it correctly anyway, so go post on a topic that’s non-numerate friendly.
For anyone that’s put up with my opinions to get this far - my serious comment is that exchange rate data is fairly meaningless in isolation - in this case without price and/or rate of inflation data for SL. Ultimately I - as a dedicated consumer
- couldn’t care less about the exchange rate - what I care about is how much that yummy dress is actually going to cost me in real terms - everything else is just book-keeping.
Hugs, kisses and a Happy New Year to all at Linden Labs
February 9th, 2007 at 10:51 AM
[...] you can exchange Linden dollars for US currency — even outside the official Second Life exchange — one assumes Doctorow [...]
April 11th, 2007 at 2:32 AM
‘Umar
I realy enjoyed reading this site, i needed some info on this subject for my new study and your post helped me out a lot thank you for that
March 20th, 2008 at 10:01 PM
[...] story, the IRS wants to tax profits made while inside Second Life. The currency , the Linden, has an exchange rate and can be converted to US Dollars. Where there is money, there is potential for [...]