1: You pay real money to purchase Lindens, to buy in world goods, which in effect gives them real monetary value.
2: The Lindens grid, suddenly has a “problem”, and that which You purchsed is suddenly gone.
3: You contact them about it and all You get is, “Sorry for the trouble, but We can’t help You”
4: Now You either just eat the loss, or You go and buy more Lindens to re-buy the items You lost, Hence making the Lindens More money. (Which I am sure is what they are hoping You Do)

Now take this and multiply it by as many people as this happens to on a regular basis, Heck I heard of some one loosing everything on their island, crashed and was rolled back to right before they started building….. Hmmmm

Just how much in real money will it take to replace all that?

Does seem kinda fishy doesn’t it?

As for the official Lindex exchange, it is very strange that Linden Labs themselves “print” and sell large quantities of virtual money for USD on the exchange. It’s unfair competition and it serves to keep the value of in-game currency repressed, also making it hard to get any large money out of the game.

Thus far, they’ve been printing and selling L$. I won’t hazard a guess as to whether that’s ultimately profitable for them or not, but they are apparently collecting million of real dollars. And those “businesses” inside the game are happy because they can sell the L$ they earn for a stable rate of about 275-300 per.

But what happens when people quit demanding L$, for whatever reason. A new game comes out, a recession slows down spending in the real world, a scandal shakes confidence, the government intervenes to regulate, an earthquake takes out half the grid? Will Linden be so quick to step in and pay real money to buy L$ on the market, or will they just let the rate float up?

And if they do, it will feel like it was a big ponzi to those trapped in the system then, I assure you.