What are the limits and extent of a virtual world? This was the topic on Tuesday’s congressional hearing held on Capitol Hill… and what a hearing this was. Virtual and real worlds blended in the discussions of subcommittee members, politicians, Second Life representatives and attendees. The unusual aspect of the hearing was held in both virtual and real world, as a virtual reflection of the real hearing room was being projected on a screen at all times.

The founder and chief executive of Linden Labs testified in front of the House Energy and Commerce subcommittee on Telecom and Internet after, one month ago, a report portrayed Second Life as a possible environment that may attract terrorist activities. Philip Rosendale answered that although such discussions most certainly emerged, they have no reason or evidence that point to Second Life as a place for such activities.

Other questions, related to how protected are children from online predators or if the Second Life virtual world could become a place for money laundry, suggest that the separation between virtual and real world is actually just a thin line that could be crossed at any times. Rosendale said there is no evidence of illegal activities going on in Second Life, and if they would ever think any of the user’s actions would pose a threat in the real world, measures will be taken.

The issue of money laundry came to light after a virtual bank managed to disappear with real money deposits from users. The incident was undeniably real, and in response, banks were prohibited in Second Life. According to Rosendale, the company is constantly monitoring activities so as to avoid any fraud attempts.

The Internet and social networks – a safe place for children? The question has been raised many times, as one never knows who is hiding behind an avatar or an innocent name. Second Life, just like any other social network, is trying to protect under-18 users, but the extent to which they can do that is still limited. Rosendale said users are required to give their real age upon registering and information related to telephone numbers or credit cards are being checked for authenticity and as safety measures. Is that enough?

“I think the strongest asset against [harmful] activity is the residents themselves who would simply stand up as one if they saw things of real concern,” said Larry Johnson, CEO of the New Media Consortium, in his testimony, PC Magazine reports. “They’re not shy about what they say in that world if they don’t think it’s proper behavior.”