So, the snarky amongst us rejoinder “but who really has any control over anything?”, to which I would swiftly apply a boot to the head. Second Life, the most successful “Virtual” world with a “real” economy is fascinating in many aspects – the most of which is how many companies are taking this so seriously. What with the Interwebs evolving so “fast”, and this all being so “new”, I would be interested to know what a real economics nut has to say about the whole issue of a virtual economy where software can be written to copy virtual goods.

And more to the point — trying to establish a business in a existing reality which is created by someone else, and is given over to the dictums of that someone else. Sure, they have to have the appearances of being impartial for fear of angering the paying virtual folk, but let’s face it. A corporation runs that plane of existence that you’re trying to do business on.

While the idea of virtual dollars are dancing running through your mind (SecondLife has over a million subscribers, and something like in excess of 5 or 6 figures of real world dollars are exchanged per day), I find it fascinating that no one has extended this line of thought to create something to hedge that risk.

Of course what I’m talking about is Virtual Insurance.

Since the whole idea of Second Life is trippy anyway, let’s go on a stream of thought sort of thing right now.  Why doesn’t any one create a virtual company selling virtual insurance for virtual risk?  You could have people paying premiums ever period of unit time you happen to find convenient; sell policies on the risk of future events.  A given character’s building or businesses going under due to unforseen virtual economic consequences; a virtual character’s unforseen death; unforseen personal losses.

If folks are spending as much time, energy and money, and if a virtual marketing firm can exist in Second Life, why can’t virtual insurance?  Virtual Life insurance?  Property Insurance?

Why, it “virtually” boggles the mind. (painful pun intended).

And if you see it pop up on Techmeme, you can say you heard it here first. ;)