This paper examines the actual situation of virtual worlds, emphasizing both their educational possibilities and limits. We start by defining virtual worlds and establishing differences with other related terms. Then we focus on Second Life identifying some of the key elements behind its philosophy such as money, land and private property. We reflect about how these aspects affect their educational uses. We also analyze some of the milestones that occurred through the brief history of virtual worlds. Afterwards, we review one of the ongoing debates about virtual worlds: Will more independent, closed and proprietary worlds be created or are we facing the origins of a new open Internet? We explain how we worked through virtual ethnography executing two kinds of immersions: The first one was to subscribe and participate in the most important mailing lists and blogs and the second one was to submerge in Second Life itself to identify good educational practices. After analyzing the results of this ethnography we enunciate both the potential and pitfalls of Second Life. Even though we detect some great educational experiences, we highlight how some of the concepts in which it is based (closed source, money, land and private property) limit both its expansion and the possibilities of educators that are working on it.