If you’re not familiar with the Second Life “Copybot” inferno, feel free to start here or at any of the major Second Life specific media outlets. The news has even surfaced on many traditional mainstream media outlets.

If you’re too busy to read them (and I am flattered you’re not too busy to read me,) the short summary is that a group of enterprising hackers have devised a way to turn Second Life’s pay-to-copy model into a free-for-all. Until it is fixed, content creators in Second Life risk having their goods made worthless as participants become free to copy anything they like.

I just learned of this incident today, and have been very upset about it. On one hand, many of the content creators are my friends. And on the other the constant calls for DMCA enforcement and RIAA-style tactics against the LibSL community is so contrary to what I believe in that I must bite my tongue. Hopefully what you read here comes across as fairly rational and measured.

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Originally, the impetus to create content in Second Life was self fulfillment and prestige among one’s fellow SLers. When a fiat economy arose, goods became largely copy-restricted and naturally inspired significant and impressive creative works. Money changes things, and it usually changes them for the worse ideologically, but for the better as a general standard of living.

The economy in SL has been in full swing for some time. I’ve spent at least $100 American dollars in game buying goods from others. Despite being nothing more than computer instructions, I enjoy spending money on well-crafted objects in Second Life. I see it as a service economy, really – because I’m paying for someone’s time and not material costs for real goods. I recognize that by removing the monetary impetus for these services that many of the creative community will stop producing these goods. Many will have to go back to traditional employment, and some will be less inclined because they satisfied their need to create. Most see Copybot as an evil for this reason and likely also because it offends their social contract with the rest of SL and their originality.

There are more facets to the Copybot threat than crashing the SL fiat economy. One is that it validates the weakness of Linden Lab’s product. One could view the security risk as a major denial-of-service to Linden’s customers. But the most significant facet, beyond the immediate concern of goods becoming worthless is what it means to our notion of Intellectual Property in the digital age.

The Recording Industry Association of America is our most visible victim of digital property exploitation. While software vendors have been ripped off by free copies, and book authors have been ripped off by e-texts, the RIAA’s massive market has been more visible because it has a larger audience and more compelling content. Their compelling content draws more of their market to seek exploitive copying than do books or computer software.

The movie and recording industries’ reaction to the devaluation of their product was to lobby for laws which prohibited what I call “criminal curiosity.” [Incidentally, Googling “criminal curiosity” brings up a few hits, so I can’t really claim it but it sounds good nonetheless.] They also outlawed copying any copyrighted work which was “protected” by technological means. They didn’t just put up a fence around their work, they made it illegal to make bolt cutters! This legislation is known as the Digital Millennium Copyright Act (DMCA.)

It’s important to recognize that while Intellectual “Property” is the source of income for millions of Americans, it is essentially a figment of our imagination made real by a threat of force by the American government. If I violate an IP law, I can be sued. If I refuse to pay damages, I can be jailed. But my violation of that law does not deprive the artist of their creation – only the potential revenue from selling the right to use that creation. In the case of patents, it’s the same argument.

No matter how you position IP rights as theft, in the real world, duplicating an idea does not constitute the theft of that idea from it’s originator. It simply multiplies. Whether you support the notion of intellectual “property” (I support it because my livelihood depends on it,) or not, if we go out in the street and beat one another bloody, we’ll be depriving one another of our blood but we can still copy each other’s insults to infinity.

Which sets the foundation for my point: In computer-generated worlds where everything is essentially an expressed idea, there will constantly be breaches in the fences that give intellectual “property” it’s value. It is really “artificial scarcity.” And all of this has been discussed far more professionally by the likes of Lawrence Lessig and others.

So we’re looking at a major breach in the IP fence in Second Life. It won’t be the last, and it will happen in other virtual worlds and computer services. It happened with the Windows Media and Apple FairPlay formats. It happened with DVD long ago. And when these fences are breached, your horse doesn’t just get out – it gets out and suddenly a lot more people have horses that look like yours. It is a one way trip.

So this big issue, how do we build artificial scarcity in virtual worlds without compromising our ethics and ideals? My ethics and ideals involve fostering reverse engineering and open creativity. Reconciling that with the idea that most reverse engineering and many creative efforts reduce scarcity by reusing media is tough. If we are to make impenetrable fences, we must either make them very strong indeed – or we must deny everyone else the tools to breach them. But in that denial, we deny them creativity and we aren’t suitable judges for what is and is not meritorious creativity.

This is a conundrum that will survive long after Second Life. It is really an ideological problem that I believe would have the same gravity as communism versus capitalism. It is not the same problem as communism versus capitalism, because it does not involve depriving the creator of their creation. But it does involve the belief that one should profit from their ideas alone and withhold those ideas from others who do not pay to share them.

At the end of this day, I want to support my friends who are content creators hurt by the lack of value. I also want to express that I disagree with the use of the DMCA and that I disagree with any attacks against the LibSL team. This team does the community a great service by acting both as a positive agent for securing Linden Labs’ product as well as by providing tools that ultimately provide an open virtual experience for everyone.

I would like to also express that I believe the issue is an ENGINEERING problem, not a legal or legislative problem – or even a policy problem. Linden will have to work very hard (and they have the talent to do so,) to wrap a new method around property rights in Second Life. I personally think that digital signatures would be a good foundation for property management, but I don’t know how feasible it is. Refer to my earlier blog entry about Federalized Virtual Worlds to see more about my ideas. Simply put, if you ended up with portable goods that roamed from one free-for-all virtual world to another – how would you be able to ensure that it was not exploited or turned against you? Digital signatures!

In this post, I have been able to think out some of my position on the matter, and although I haven’t come up with an answer for the problem today, at least I feel that I understand it better. I hope that the outcome of this incident results in a tempered response without a witch hunt. But we’ll see.