Merchant Ship can't attack unless defending player controls an Island.
Whenever Merchant Ship attacks and isn't blocked, you gain 2 life.
When you control no Islands, sacrifice Merchant Ship.
4/15/2013 An ability that triggers when something “attacks and isn’t blocked” triggers in the declare blockers step after blockers are declared if (1) that creature is attacking and (2) no creatures are declared to block it. It will trigger even if that creature was put onto the battlefield attacking rather than having been declared as an attacker in the declare attackers step.