What happens when the virtual world meets the Xerox machine? Chaos.

That's what took place in Second Life this week. Second Life, for the uninitiated, is a virtual world created by startup Linden Lab that is unlike most of the fantasy-oriented games you might have heard of. In SL, as it's known, people create online environments and objects and - in true capitalist fashion - buy and sell them like crazy. Linden Lab makes its money by issuing the virtual currency that its users need to shop.

But since virtual objects are just bits and bytes, they're vulnerable to copying, and new software called Copybot has made such copying easier to do. Copybot's debut enraged sellers on Second Life, and Linden Lab's first response - to deliver a lecture about how copyright violations aren't "theft" - didn't go over well. More than 200 sellers closed their virtual stores in protest.

Linden quickly changed its tune, however, noting that copying objects without permission wasn't just a violation of copyright, it was also a violation of SL's terms of service. The company now promises to kick off any user who engages in such behavior.

But there's little technically that Linden Lab can do to stop the copying, points out Programmer Tao Takashi. Encryption and digital rights management aren't good options, since they're easy to crack and annoy users. At Theory.isthereason, graduate student Kevin Lim says the whole Copybot episode reminds him of Star Trek's replicator, which destroyed the Federation's capitalist economy by making physical goods endlessly available. A scary thought - but Second Life's creative traders will surely find a way to live long and prosper, no matter what.