[Opensim-users] Advantages of grid using OMC or Podex vs using Paypal + fictional currency?

[David Saunders]

Ok, We went though this couple years ago when we set up the grid.  We went
with OMC then because it aloud transfer or Liden$ to OMC$ and it was all
prepackaged. But about 6 month ago or so lots of or uses got hit with none
use penalties and lost all there funds. Because of this and the OMC money
add on we could not find any support for it we jumped into the deep end and
started out own grid bank and currency.

  We now have a stable money system that will not disappear over time and
have to restart a region to get it back. The users are very happy with it
and merchants love it. We run a closed private grid,with 400+ members with
50+ active in the last 30 days.

 It took us several months to come up with a homebrew plugin for it, but we
have couple excellent OS modders in our mists to handle it.   USers can buy
DN Coins by paypal or  SL$. All the funds are kept with in an account that
is separated from the working funds of the grid and kept that way. If we
have a run on the bank we will have enough so users to sell off there
Coins.  Our security include a full transaction record of all coins so we
can know if we get an issue.  We also don't allow large amount of coins to
be bought or sold at one time. But they can be trading in world as much as
they own.

  The system been activated since last spring and our users are very happy
with it, especially the nightmares we were having with the old system never
knowing if it would be working or not. But don't let this sway you much,
 there lots to homebrewing a grid banking system, make sure you have your
back covered in liabilities before you go down this path.

   I still recommend finding a 3rd party who can handle this for you, it
just one thing you don't have to worry about if you host a grid.  One thing
that would be nice, is to have a common money system that can be used
across all grids, but this a very hard task to do. This is why we went a
3rd party at first and found the problems were worse the the benefits for
us.

 Banks require users to trust them to work.



On Fri, Dec 19, 2014 at 8:24 PM, Erik Gordon Bainbridge <tamrider at frodo.tv>
wrote:

>  You're correct, but the problem is that it's not clear exactly who needs
> to register. FinCEN hasn't clarified their regulations yet for virtual
> worlds.   I've spoken with FinCEN and I've read the rules. The rules were
> written for Bitcoin and define three types of participants in a virtual
> currency: 1) currency administrators, 2) currency exchangers, and 3)
> individual users.  The first two need to register with FinCEN but users do
> not.
>
> It's clear that currency companies, and virtual worlds with their own
> currencies like Second Life should register with FiNCEN, but it doesn't
> cover virtual worlds that don't administer or exchange their own
> currencies.  Under these circumstances, under the rules a grid owner might
> be considered a user,  except for the fact that the rules define a user as
> "a person". .I've also found that there's disagreement in the OpenSim
> community about whether foreign-based companies like  Virwox and Podex need
> to register with FinCEN, though my personal opinion is that they do need to.
>
> Until FiNCEN issues some clarification about its policy towards virtual
> worlds, it's best to err on the side of caution.  However I'm trying to
> balance that with not being happy with a strictly Paypal implementation in
> a grid  (without using the Paypal currency module, with introduces other
> risks and problems).
>
> Erik Gordon Bainbridge Author, virtual worlds builder/reporter
> www.VirtualMarin.com
> www.ErikBainbridge.com
> www.examiner.com/second-life-in-national/apollo-manga
> www.WarriorBrothers.com
> www.MountainBikeRoots.com
>
> > Correct me if I'm wrong, but aren't virtual currency providers required
> > to register with the government now (ala BitCoin)? I know on the SL side
> > of things they made some changes wherein those who cash out over a
> > certain amount yearly need to register their tax information.  Maybe it
> > would be worth running this past your lawyer or accountant?
> >
> >
> > On 12/18/2014 05:18 PM, Ethan Grammatikidis wrote:
> >> On Thu, Dec 18, 2014, at 02:07 PM, Erik Gordon Bainbridge wrote:
> >>> What are the advantages and disadvantages of using Paypal as a grid
> >>> currency rather than OMC or Podex?  I'm interested in the
> >>> perspectives both of people who sell in grids and of grid owners.  I
> >>> am building a grid for a company that wants to use a Kitely model of
> >>> fictional currency combined with Paypal instead of using OMC or
> >>> Podex.  I think the complexity of setting up fictional currency +
> >>> Paypal could outweigh the advantages.  I need both perspectives so I
> >>> can give my client the best advice.
> >> What? OMC and Podex both offer "fictional currency" backed by real
> >> money. Any grid with an exchangeable currency provides "fictional
> >> currency" backed by real money in one way or another. Your choice is
> >> whether to contract with a company (OMC or Podex) which specializes in
> >> this, or to making your own system.
> >> Making your own system doesn't just mean writing code, you will also
> >> have to choose what rules to apply. If I were doing this, I'd think
> >> deciding on the rules would be harder work than writing the code.
>
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