Money is a thing… I suppose to avoid some of the financial and tax problems involved in providing a RL currency the Kitely Credits (KC) cannot be converted to RL currencies. KC’s can be purchased using RL currencies.  The KC’s can be used in world and can be used to pay Kitely for services. Otherwise it is a strictly one way play-currency.

A merchant wanting RL currency can choose to sell products in U.S. dollars. Ilan points out several advantages to using RL dollars. A big one is the merchant is not hamstrung by limits on how money can be withdrawn from the system. People outside the USA have challenges making withdrawals from SL. That is not the case with Kitely.

At about 23:00 minutes into the video Ilan explains how the Export Flag works. This is different than some of the other grids. A merchant decides if they want to allow their content to be sold off the Kitely grid. Either way, within the Kitely grid items are tracked from point of sale. Tracking stops, for now, for exportable items if they leave the grid. If an item is marked exportable, the Kitely people can still refuse to allow it to travel off the grid. So, if a problem is registered with the item they can stop its export to other Hypergrids.

The export flag is a server side feature. Meaning it is enforced by the Kitely servers and asset base. Reprogramming a viewer won’t circumvent the restriction.

They are planning to implement what I’ll call an item recall feature. If for whatever reasons a purchase is being unwound, like the merchant is making a refund, the item can be pulled from your inventory. If you are requiring a refund, you don’t get to NOT pay and keep the item. It is taken back. Presumably this would allow refunds on Copy-OK items too. All copies could be pulled. A problem for SL customers and merchants.

At 25:00 the subject of copybotting comes up. I would say IP Theft but they use the word copybot in the video. At 28:00 Ilan starts to deal with the objections people have to selling in OpenSim. The first objection/fear is ‘people will steal my content.’ I feel that one and think many SL people do.

Ilan makes some interesting and true points. If you are a successful SL merchant your content is already being stolen and sold in OpenSim grids. Whether the Kitely marketplace succeeds or not that is going to be true. Ilan’s argument is you can either participate in the Kitely market and have an opportunity to be paid for your content, which will end up on the OpenSim grids whether you do or don’t participate.

This is a point I find compelling. If you have good stuff people want it in OpenSim too. They will find a way to get it there. About 3 years ago I wanted my SL Skin and shape in OSGrid. Nomine did not sell in OSGrid. I had made my shape so that was easy to duplicate. I had to spend a couple of days finding out about OpenGL debugging tools to get a copy of my skin. If Nomine had been selling in OSGrid I would have grudgingly bought another copy of the skin. But, I would not buy a copy for every OpenSim grid I play in.

So as much as some people hate that I took a copy of the skin I wear in SL to OSGrid, I am happy to have it there. But, the new skin I just bought… I’m not going to take the time to pry out a copy I can use in OSGrid. It just isn’t worth my time. The first time it was desire and experimentation. This is Ilan and Maria’s points. If it is easier to buy in Kitely than steal it or buy from thieves, people are going to take the path of least resistance.

But, if I could use a skin purchased once via Kitely in all the grids I play in, that would be great. That is sort of what we can do with Kitely selling into the Hypergrid.

As a merchant I realize that whether I sell in SL or via Kitely my stuff can be ripped off. There is absolutely nothing I can do to prevent that. In a free society there are few preemptive measures one can take. The ideology of free societies is to punish those that break the rules after they break the rules, not before. It is just too fascist to preemptively prevent behaviors.

Ilan’s philosophy is that all merchants whether in RL or virtual markets have to deal with theft. In RL we work to keep it at acceptable levels. In the virtual worlds it is a bit different. For one thing in RL we have a real cost for every stolen item we made. In the virtual worlds copies of things incur no marginal production costs. But, the sale of a stolen item can cost us a legitimate sale. So, it is a little different and how we deal with it can be different too.

Ilan’s point is that if you are not in the market, you have no chance of making the legitimate sale. Like iTunes, it is often easier to deal with iTunes than the pirate. Consider. If the thief stole the music, wouldn’t they also be of such a moral nature to steal your credit card information?

A central market like Kitely’s would draw customers. Like iTunes the Kitely market is easy to find. Ilan and the Kitely people make it easy to find things within the market. So, their thinking is people are more likely to buy legitimate merchandise than try to find cheap rip-offs. I suspect for the majority of potential customers they are right.

At 32:00 Ilan talks about thieves selling from the market. We all know anything can be stolen. That is not the big worry. Can they sell it? It is the selling that hurts legitimate merchants. Ilan points out that it is possible, they can. But, in the marketplace what they are doing is visible. You will be able to catch them, just as we do on the SL MP.

By watching the ‘new items’ you can pretty easily find your content if it has been ripped off and put on sale at Kitely. Also, good customers will rat out thieves. It happens in SL there is no reason it wouldn’t happen in Kitely/OpenSim.

The big advantage to merchants is the 45-day window for payouts from Kitely. A merchant has 45-days to catch the thief. This can effectively cut off their funds. This is a deterrent to thieves trying to make a quick hit.

As a customer you’ll be wanting a refund when you have bought stolen goods that are taken back. Kitely can do that refund. Since Kitely has the money in hand the process is much simpler. They stand between the merchant and the customer’s money. This gives legitimate merchants a means of recourse not available on the Second Life MP.

Ilan says they have the ability to transfer the money from illegal sales to the rightful owner of the stolen goods. So, the customer gets to keep the stuff and the rightful owner gets paid. Now there is a concept.

Analysis

There are things implemented in the Kitely Market that make it more secure than I think most SL people expect, certainly more than I expected. It is different than the SL MP. The Kitely MP is new and not everything they hope to do is in place yet. But, the 45-day hold on funds provides a good measure of protection to merchants and should be a good deterrent to content thieves.

While I think that my first impression that it will be easier to steal OpenSim content remains accurate, Ilan has well made the point that it is not so much easier in OpenSim than it is in SL. The difference is pretty much insignificant in his thinking. After review I tend to agree but remain skeptical. I will concede it is easy to steal content from either grid and that is an issue. But, there is no fix for that.

The difference is Kitely is making it easier for legitimate merchants to profit, even from the illegitimate sales by others. It appears it will be much harder for thieves to profit via the Kitely MP. This is a significant difference between the SL and Kitely markets. Ilan has decided to take the problem on in the area of preventing thieves from profiting than trying to prevent theft.

Ilan seems to believe thieves will probably be able to more easily do business and profit in SL than in a Kitely-OpenSim scenario. That is definitely a reversal of roles and something to think about.

If you have been in OpenSim lately you’ll know it is still a pain trying to find places and things. So, it is hard for a disreputable merchant to draw traffic in OpenSim and have big sales. The Kitely market will solve that problem for legitimate merchants and connect customers and merchants. But, the 45-day hold makes it far less desirable for thieves to go that route as they are far more likely to get caught. The 45-day funds hold makes it far more likely they will NOT get paid.

I am still of the opinion this will make lots of work for the Kitely people. Time will tell if they can keep up with the thieves and keep the market relatively clean and prevent DMCA abuse. Now that I know more, I at least think it is possible they can pull it off. More importantly I see how they can be ahead of the thief.

I also am much more inclined to think a merchant could keep losses to theft less than I previously thought. With more people coming into the Kitely MP, sales should jump. Since it reaches any grid willing to allow Hypergate travel the customer base expands. There definitely are possibilities.

The challenge now is getting enough people selling in Kitely MP to shift the balance and change people’s perceptions. Ilan says they have enough people selling now to establish the profit to loss ratio for sales verses theft is making people money. I may have to put some things in Kitely and see what happens.

While I won’t recommend you run to the Kitely MP, I will suggest it is something to consider or reconsider, if like me you thought it a bad idea. It may not be that bad an idea.