What is LindeX
LindeX is the online currency exchange for the virtual game-like world called Second Life. The exchange allows Second Life users, called residents, to trade United States dollars for so-called Linden dollars (L$) and vice versa. Second Life residents typically use LindeX dollars to purchase everything from real estate to clothing and event tickets, all of it existing only in the virtual world, until the Linden dollars are converted back into U.S. dollars. The current exchange rate is 250 Linden dollars to one U.S. dollar.
BREAKING DOWN LindeX
The LindeX and the Linden dollar are named for the San Francisco-based company Linden Lab, founded by Philip Rosedale in 1999. Linden Lab developed Second Life in 2003. Although it shares many features of other immersive online game worlds, Second Life is not a true game because there are no set goals or objectives. Rather, participants function like entrepreneurs, buying and selling virtual products and services using their own avatars.
LindeX Is a Virtual Exchange With Real Profits
Although it all takes place in a virtual world, the potential profits becomes quite real when Linden dollars are converted back to U.S. dollars on the LindeX. Residents receive a profit reimbursement via PayPal. Some Second Life residents have made more than a million U.S. dollars from their business activities, although most participants see considerably more modest returns. Interestingly, participants retain the rights to their virtual creations, which in some cases can be monetized in the real world.
The LindeX exchange functions as a platform for currency trades between residents; Linden Lab does not trade directly, although the company earns service fees on every trade. It also makes money on premium user fees, which buy increased support and enhanced features. In return for its exchange commission and user fees, Linden Lab constantly monitors and evaluates the currency trades on the LindeX, in part to generate economic statistics of the virtual world.
Billions of Dollars Have Been Traded on LindeX
The company claims that over the first ten years of Second Life, the virtual world generated the equivalent of US$3.2 billion in transactions. According to Motherboard, in 2015 Second Life residents cashed out about US$60 million and the world’s “GDP” was pegged at US$500 million. Hundreds of thousands of people participate in Second Life and trade daily on the LindeX exchange. It’s estimated that about a quarter of all the world’s virtual goods are traded in Second Life and thus through the LindeX exchange.
Corporations and individuals use Second Life to market products and services. IBM has gone on the LindeX to purchase virtual islands, which are used to simulate the company’s technology applications. Other real-world participants include pop stars, schools and even some countries which have opened virtual Second Life embassies.