World's First "Virtual" Millionaire

Last Updated Aug 27, 2007 9:54 AM EDT

Avatar of Anshe ChungOver $1,000,000 U.S.D. are being spent in a single make-believe world every day. That world is Second Life, a place created entirely by its users, and which exists entirely in the bits & bytes of a 3D online world. Second Life's GDP is bigger than some (real-life) countries. The poster woman for entrepreneurship in this world is real estate baroness Anshe Chung. Her estimated worth in early-2007 was over $1,000,000.

It's a pile of cash that almost any schmoe would love to have, but here's the clincher: a large portion of it comes out of thin air. The Ludwig von Mises Institute writes in its analysis that Linden Labs (creators of Second Life) have been playing Keynesian hat tricks with the Second Life currency (known as the Linden). The Institute estimates that the Linden money supply doubles every year.

Each Linden is worth about 1/275th of a U.S. dollar, and can literally be exchanged for cash online. The Institute's recommendation? Begin employing Austrian School economic policies in its virtual world. Otherwise, hyperinflation in Second Life would ensue. The results could be [virtually] disastrous.