Multi-grid currencies grow in OpenSim

Both the G$ and OMC multi-grid currencies reported strong growth over the last two months.

Since we last took a look at their numbers in mid-August, the OMC currency — backed by Austrian Linden exchange operator Virwox — has grown from 14 to 20 grids, and now reports 382,537 OMC (US $1,331) in circulation, up 27 percent from 302,037 OMC (US $1,045) 60 days ago.

The number of grids using the OMC currency has risen to 20. (Source: Virwox.)

Meanwhile, the competing G$ currency from CyberCoinBank gained two grids, growing to a total of 12 grids, including Second Life and eight public OpenSim grids. It now reports 112 million G$ (US $448,000)  in circulation, according to CyberCoinBank founder Frank Corsi. Some of that currency is circulating in Second Life and in private role playing and gaming grids, he said, but did not disclose the specific proportions.

Total number of OMC's reported users is a fraction of G$'s reported users.

More grids are testing OMC right now and getting ready for its adoption.

Myron Curtis

“We want an economic system that not only allows in-world transactions to proceed without a lot of hassle, but we want it to be exchangeable for as many real world currencies as practical,” said Myron Curtis, founder of Virtual World Grid, the third-largest grid running on the OpenSim platform.

OMC will allow commerce for both virtual goods and real world goods, he said, “in a simple but secure system.”

Curtis said that his grid also considered using PayPal and standard credit card payments, but decided they were too complex and expensive.

“We won’t exclude the use of external monetary systems, but we prefer to have one that is as much like the Linden dollar system as possible because it works well and already has a large base of people who are familiar with using it,” he added.

Some grids, such as OSGrid and Avatar Hangout, use both currencies. There is no conflict between the two systems. The G$ works with a proprietary vendor network. All a merchant has to do to accept G$ for payment is to get a free vendor and install it in his or her shop. Customers register for the G$ accounts online — they don’t have to be based on a G$ grid.

Meanwhile, the OMC works through a module that has to be installed by the region operator after getting approval from Virwox. The OMC currency works through the viewer, using the standard LSL payment scripts. Whenever an OMC currency holder travels to an OMC-enabled region, the user’s current OMC balance shows in the top right of the screen, where the Linden dollar balance is displayed in Second Life. As with the G$ currency, the customer doesn’t have to be based on an OMC-enabled grid in order to use OMC.

Both require a second, Web-based, payment confirmation step for additional security.

And both G$ and OMC are hypergrid enabled, meaning the customers can travel to multiple grids on shopping trips and bring back products to their home grids.

OMC has seen more takeup in the larger grids in the OpenSim universe since it was launched this past spring, partly because of solid backing from Virwox, one of the largest Linden dollar exchanges in Europe, and its lack of affiliation to any specific OpenSim grid or shopping platform.Virwox has traded over 4 billion Linden dollars (US$ 14.5 million) since it was founded in 2007.

In addition, the OMC is fully convertible to the US dollar, the Euro, and the Linden dollar, through a simple Web interface.

OMC is accepted on almost twice as many grids as the G$.

The G$, which was launched in 2008, is affiliated with the Avatar Marketplace online shopping platform and its family of associated grids such as AlphaTowne and Virtual Highway, as well as a number of properties in Second Life. The shopping platform is both a benefit and obstacle to the growth of the currency. On the one hand, merchants who adopt it may find that the online marketplace is an easy way to distribute their goods. On the other hand, grids owners and merchants may want to set up their own online store fronts, and see the marketplace as competition.

More importantly, the G$ is a fictional currency. According to Corsi, CyberCoinBank will not redeem it for cash. However, currency holders looking to cash out may be able to use affiliated third parties to exchange their G$ for dollars. Today, CyberCoinBank lists four approved resellers of the currency, but does not provide contact information or working Website addresses for them.

As a result, G$ may be preferable for merchants who need a quick payment system and Web storefront, and who don’t have access to the underlying infrastructure of a grid. And the OMC seems to be the currency of choice for large social grids looking to offer their users and merchants a neutral, secure and convertible payment system.

Several grids do not offer any in-world currency at all, leaving it up to their users if they want to use PayPal or Google Checkout. ReactionGrid, for example, which is strongly focused on corporate, education and non-profit customers, has no current plans to roll out an in-grid currency.

Many grids, however, choose to go their own route. Although it can be complicated to run your own currency, and potentially opens the grid up to legal liabilities in some jurisdictions if the currency is fully convertible, grid owners also get to keep all the money they raise from selling the currency.

As a result, InWorldz, SpotOn3D, 3rd Rock Grid, Avination and Tyro Gage offer their own currencies to members of their grids, currencies which cannot be used for shopping on other grids.  The lack of hypergrid support is not a problem for these grids since they are not hypergrid-enabled.  In addition, these grids also do not allow third-party servers to connect to their grids. Without hypergrid or third-party region hosting, they can afford to skip the extra security step of having Web-based approvals for every transactions.

That extra step is not very user friendly, said Jake Detman, founder of the Tyro Gage grid.

“As far as currency,  we offer our own and do not support nor will support an outside source of currency,” he said.

maria@hypergridbusiness.com'

Maria Korolov

Maria Korolov is editor and publisher of Hypergrid Business. She has been a journalist for more than twenty years and has worked for the Chicago Tribune, Reuters, and Computerworld and has reported from over a dozen countries, including Russia and China.

  • It is important to realize that developing flexible but secure monetary systems for the virtual worlds is a key element in making them attractive to the general public as the new internet.
    We can deliver an amazing spectrum of goods and services bundled with the ability to provide the personal touch that, until now, was only available in real life. For example, customers can interact with a clerk at a virtual world store in a more conventional manner than they can at a simple webpage, and they can inspect goods in more dimensions. However, until customers feel comfortable with the financial transaction systems, they won’t buy anything.
    Thank you for providing this concise comparison of the current currency providers. We need more reports like this.

  • A note.. The fictional currency can not resemble a real life currency in any way. Therefore the creator of the currency can not buy it back or show real value other than it being sold as a product. Any creator of a fictional currency should not ever buy it back for anything of real life value. But once a fictional currency is sold to someone, they can do anything they like with it.

    If a fictional currency creator engages in the practice of buying back the currency or operating a currency exchange where the rate will change, it is then acting like a real currency and may be against the law in many countries.

    A fictional currency also can not act like an economy. It is not a real currency nor does it have banking permits to act like a real currency. Therefore when looking at a fictional currency as in G$, you will not see the creator buying it back, now will it look or act like a economy.

    Research the laws in your country to see if using a fictional currency where the creator treats it like an economy is allowed by law. In many cases you can be legally liable if you engage is trading an illegal currency. Not to mention if and when the currency is closed down by the government, your investment will be lost.

  • I am very happy that Open Grid currencys are available. In the past it was not possible to get a currency in a private OpenSim project at all. Now the Money Modul is ready for all OpenSims which makes inworld trading and payments possible. For stand allone projects the money modul is a good opportunity to create a economy. Im still happy that third party exchanges offers their own currenys.