Tilia – a further look and a little more speculation

Logos © and ™ Linden Lab and Tilia Inc.

Note: this article is about Tilia Inc., as a business. It is not about the Tilia and how USD dollar balances and cashing-out from Second Life will be handled. If you wish to comment on those subject please refer to:  Linden Lab announce important Second Life account changes and comment there. Thank you.

On Monday, July 1st, Linden Lab announced important upcoming changes related to Second life accounts and credit processing, which linked to their subsidiary company, Tilia Inc. Full details of these changes can be found in the Lab’s official blog post: Important Changes to your Second Life Account – Introducing Tilia, which I also covered in my own post, Linden Lab announce important Second Life account changes, which includes additional links to the Lab’s comments posted in reply to questions on the forums.

But what exactly is Tilia Inc.?

Well, for a start, Tilia Inc isn’t actually something new – it’s been around in relation to the Lab since 2014 / 15; in fact, Second Life users might actually already be aware of it without realising it, as the Tilia Inc., logo appears on the SL web pages related to L$ account purchases (Tilia also drives elements of Sansar accounts as well).

In describing Tilia Inc., in the blog post noted above, the Lab give a fairly basic description of company’s function::

A subsidiary of Linden Lab that offers certain financial services to the Second Life community and helps Second Life comply with U.S. laws and regulations.

This is actually only a part of the story – the part that affects Second life users; there is more, some of which I speculated about when first writing about Tilia almost five years ago in November 2015 – see Linden Lab and Tilia Inc. – speculations on the Lab’s new subsidiary – and which would now seem to be correct.

That article came about as an extension of investigations fellow Second life user Vick Forcella, had started before punting things over to me to build on his work. In the course of my digging, I spoke with Peter Gray, who was then the Director of Global Communications at Linden Lab, and while he didn’t give too much away at that time, he did say something that resonated with me as I speculated about what Tilia Inc might hold for the future.

Tilia is a subsidiary of Linden Lab, focused on payments and the compliance work associated with operating virtual economies, and it will provide services for both Second Life and Project Sansar.

– Peter Gray, former Director of Global Communications, Linden Lab, November 2015

Back in November 2015, two things in particular struck me about Peter’s comment.

The first is pretty straightforward: Tilia Inc., was, and would remain, central to the Lab’s work in seeking federal and state registration as a US Money Transmitter and to comply with all US laws regarding the movement of money. This had been a stated goal within the Lab pretty much since Ebbe Altberg officially joined the company as CEO.

Secondly, Peter’s statement struck me as interesting in that its structure seemed to suggest that supporting Second Life and Sansar (then still “Project Sansar”) was part of, but also separate to, the overall goal of presenting Tilia as an entity focused on providing a robust payments and compliance system for operating (and managing) virtual economies to third parties.

Another option might be that the Lab be considering making the Linden Dollar and all its attendant services a pre-packaged solution / service they can offer to other companies wishing to operate a virtual currency, with Tilia Inc., as the nominal operating company for that service. After all, they have made much of their leadership in matters of virtual economies and compliance, so spinning it out and offering it to others might be a means of generating additional revenue, although admittedly, given the complexities potentially involved, this might be seen as a bit of a stretch.

– Part of my speculations, November 2015

Reading the Tilia Inc website, it seems that this is what Linden Lab plans to do – the main difference being that Tilia is geared to work with any “virtual token”, not just the Linden Dollar. Not only does the home page promote the company as a “solution provider”, so to speak, but it also includes a form by interested companies / organisations can register their interest with the Lab.

The Tilia Inc., home page promoting the company as a virtual economy solution provider to other businesses

(I’ll only say in defence of my linking Tilia and the Linden Dollar as the hip in 2015 was in part due to the Lab at that time hoping to use the Linden Dollar with Sansar, so it seemed logical to present they would offer it to others as part of the overall package.)

Some may well be upset at the idea of LL spinning off a business entity “at the expense of Second Life” (even though Tilia does and will have a bearing for both SL and Sansar, as noted). However, as noted in the quote above, it does have potential. There is already much more talk today about virtual currencies and economies  – notably focused around blockchain systems (such as Etherium), and the Lab does – as noted – have 16 or so years of running a virtual economy at scale and with users cashing-out up to US $65 million a year. Combine this with Tilia’s US-wide certification as a recognised Money Transmitter, and the Lab could have a robust business platform to offer clients.

Of course there are risks involved, such as the realities of this new market and how long it might take to grow, how LL might fair in the face of competition like decentralised blockchain system should these reach a similar level of certification, how much of any potential market LL might corner, etc. However, none of these mean the company shouldn’t necessarily try. Were Tilia prove to be successful over time, it could provide Linden Lab with an alternative revenue stream, possibly allowing them to do something else Ebbe Altberg alluded to in his Meet the Lindens session at SL16B: reduce their margins around SL and possibly lower fees.

But even if this doesn’t pans out, Tilia Inc., still means that LL are in compliance with US laws regarding money handling across state lines and borders, and so can continue to offer users the ability to generate and cash-out their own revenue through Second Life (and Sansar).

Which perhaps -for now – just leaves the question, ‘Why “Tilia”’? Well, possibly because, as I also noted back in 2015, tilia is genus of trees that encompasses linden trees.

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