I can't tell if havok is used on the client side or the server side, but that quote implies that it's on the server. What software is on the server is irrelevant as far as it concerns freedom, because it's not on our computer.

As far as server side goes, what matters is what kind of computing is done where, where data is stored, whether the users have control over their data, etc. I know little about Second Life so I can't answer these questions.

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