On coins

[Seldon]

Haven is good for me with no money. Real world is fucked up with that. I like haven for not having money.

While simple, there is some merit to this. Many game economies turn to barter based ones because money based economies see inflation and hyper-inflation is bad for everyone. In the real world, an annual average inflation rate of ~3% is enough to piss people off; in video games we see inflation rates closer to 100x that due to more people constantly joining into it. If the money doesn't inflate, these people cannot join into the market -- but every time it inflates the value of the money lowers as a whole.

That's because in-game currencies are often poorly implemented and often neglected or abused. They are not so much a medium of actual exchange as much as a means for players to obtain things, and items that are truly valuable are usually just bartered for or traded for real-world money. Example: gold in Diablo II/III, which is essentially worthless. It is not really a problem of an influx of players, but rather that it is so easily obtainable within the game that everyone and their grandma will have piles of it soon enough and that it becomes useless for anything (besides trading with NPCs for health potions or something like that). In HnH all metal is relatively difficult to obtain, let alone silver or gold, ESPECIALLY for new players, so the value of currency would stick and the money supply will not become inflated overnight.

A market that was putting out money would need someone constantly watching the logistics of it all or you could end up accidentally over-inflating or, worse, not producing enough money and in turn creating a massive disparity between the rich and the poor. The poor would simply be incapable of buying into your market at any point and thus are locked out.

Goods bartering is self regulating and simple, which is nice.

I seriously doubt that hyperinflation would occur gold and silver coinage (which isn't even debaseable, btw), unless the bottom four layers were completely saturated in precious metals for some reason, in which case something is really wrong to begin with anyway. Also the opposite case would be a deflationary spiral, where nobody would be willing to trade gold with others—which is probably closer to the current state of affairs, but that's why other things like pearls are the de facto currency. So yeah, it's self-regulating to some extent, but I feel metals would be more appropriate.

[TeckXKnight]

Being able to earn a lot of money rapidly is hyperinflation. Money moving between players is not deflating the amount or value either, so you have an ever growing amount of money, which in turn makes all money worth less since there's so much of it compared to goods.

If money in games stopped dropping and inflation stopped, new players who enter the market would be unable to obtain money except by trading valuable goods to other players. This is not really a great trade because you're trading a valuable good for a promissory note that may or may not be valuable enough to buy the things that you want.

In Haven not everyone is always selling everything and so currency will settle onto players and not immediately move. This isn't bad on its own but if new currency is not made and distributed then there will be less money circulating and when it does recirculate it will take a long time. For example, someone who is only willing to spend money on pearls and who is earning money by selling iron will earn money faster than pearls can go on the market; iron is considerably valuable and is not difficult to mine up once you've located it.

When currency is not available but goods and services are that both parties want, then barter occurs in place of this currency.

I'd argue that gold and silver are not nearly as valuable or rare as you claim them to be, but it's a moot point. If you only put out X amount, it will start to see disuse. People will accumulate 49 of X currency note when what they want costs 50 and in turn not spend that money. This money is now off of the market and eventually it will take merchants too much longer to sell their goods for currency rather than barter them.

Though you're right that there will be a considerable amount of deflation as well in that people will find the coins themselves more valuable and just mint them into bars. If new currency is not put out in some way to combat this, you still run into the issue of merchants selling for coins not being able to sell to anyone.

[Sevenless]

Great example of why currency scarcity is a bad thing can be seen in wurm. Since 99% of money is created by cash input or re-circulation (to established players), most new characters have nothing valuable enough to sell for any amount of the currency.

It's a terrible thing as a beginner to be told you're near worthless and there's little/nothing you can do to change that.

Flotsams and Pearls are ideal as a currency in that sense because they are time input only, not terribly draining on skills. It's amazing to have a game where any beginner can (with dedication) build up currency to trade for special stuff.

[SuperNoob]

in video games we see inflation rates closer to 100x that due to more people constantly joining into it. If the money doesn't inflate, these people cannot join into the market -- but every time it inflates the value of the money lowers as a whole.

I always thought that was a supply and demand thing...supply stays the same, but as population grows so does demand. thats the problem with most game economies, those 'rare drop' items that come along so seldomly. there are no drops here, and most resources(while not infinite) are renewable. with this game designed the way it is, and having coins minted by each faction based on another good at a certain value(ie: Faction 1 issues coins that are worth .2 q10 pearls, so someone selling a q10 pearl to that faction would sell for 5 coins, or someone buying from that faction would pay 5 coins). as this currency has its value tied to something and everyone knows its value the only way to have inflation is to have the good which the currency is based on change in value(and as most currencies will be based on pearls and pearl values don't change much I don't see that happening).

this doesn't mean an end to bartering, and I'm quite sure smaller groups(and especially hermits) will still barter for most of their trades.

[TeckXKnight]

It's both. Economies are complicated things and we're only really attempting to meaningfully examine one aspect of it. The supply and demand side is another can of worms entirely. =)

[Sevenless]

I'm 99% certain that unless a trade faction decides to enforce and create a currency not for their own benefit, but for shiggles, coinage won't happen in haven. Metal doesn't have the universal utility that LP does.

Most games give coins innate value (trading to npcs for junk). In haven only LP and FeP's have that. Unsurprisingly, those two item types make up the backbone of the economy.

[Seldon]

I always thought that was a supply and demand thing...supply stays the same, but as population grows so does demand.

Generally, with foraging and item drops supply and demand is always a function of game population; e.g. if there are 100 players and players find pearls at a rate of 0.2 pearls/day, then 1000 players will, on average, find 2 pearls/day. If the rate of drops (of gold or other tradeable items) is too high or too low, it'll be too inflated or deflated to use as a currency and become defunct. This doesn't mean the entire economy will grind to a halt, of course, just that people will revert to barter or substitute currencies. (In the real world, whenever there was an overabundance or scarcity of the 'official' currency, people would generally start trading for something else instead, like dollars or Euros or cigarettes or whatever.)

I'm 99% certain that unless a trade faction decides to enforce and create a currency not for their own benefit, but for shiggles, coinage won't happen in haven. Metal doesn't have the universal utility that LP does.

Yeah, but I never study pearls, and even if they weren't curios (but were useful in jewelry or something like that) I'd still accumulate them as a store of value. A commodity doesn't have to have direct utility in order to be valuable—after all, look at gold—and even if that were the case, this could be solved by adding a decent craftable curio which can only be crafted with gold/silver.

[Sevenless]

A commodity doesn't have to have direct utility in order to be valuable—after all, look at gold.

That's the issue I'm questioning here. I definitely agree that in real life currency and stores of value need not have real utility, but I'm not seeing that come true in video games terribly often.

The one case where this does happen tends to be in long running MMO's where items are one time released. Ye ole traditional party hat from runescape is a good example. That however does not work as currency really.

I think the issue lies in the difficulty of production and the nature of a virtual world. Anything that's divisible enough to be a currency is almost never rare enough or hard enough to produce to store anything other than utility value. Furthermore, it's entirely possible devs just don't make items that work as suitable currencies.

A lot of this has to do with the limited nature of virtual worlds. I can't take gold and make a golden statue to put on my lawn, gold only has X properties assigned to it by the devs. In a game where the crafting system works very hard to mimic real life's wide variety of options... maybe then.

But point stands: The laws of the real world don't necessarily hold within virtual due to the differing fundamental powers at play. Saying they should doesn't change that.

[Samu]

Haven with money would be the same as Runescape only with 2.5D graphic.

[Seldon]

Gold still has symbolic value even if it's just a simulation of gold, let alone a crude one at that. Especially if it's rare and/or difficult to acquire. It is not particularly useful in Minecraft either (or it wasn't when I last played it) but there was still some appeal in stockpiling it or paving your house with it nonetheless. Rare things tend to be sought after; one-time releases like the RS party hat are just an extreme example of this. The problem isn't so much that gold and silver aren't valuable at all, or that there's no demand for it. Instead, I think there isn't really enough of a supply of it and those that have it aren't really willing to trade it for anything else. In short, there really isn't much of a market for it on the supply or demand side.

Anything that's divisible enough to be a currency is almost never rare enough or hard enough to produce to store anything other than utility value.

Use-value isn't everything; personally, I think the exchange-value of pearls is a lot greater than its usefulness as a curio or crafting ingredient. If I couldn't exchange them, I would simply have studied them or crafted some jewelry out of them already.

I'd like gold to be a de facto currency (if not silver, or both gold and silver) because:

(1) If we're operating under the assumption that 1 gold nugget = 100 pts, then gold is much more value-dense than pearls could possibly be, since a bar would equal 1000 points.
(2) A coin, on the other hand, would be 10 points, which would be around the same going rate as, say, a Q20+ bolete.
(3) It allows for easier haggling and a better understanding of the going rates of high-quality goods.
(4) Commodity markets! Arbitrage! Banking! Hedge funds! Collateralized debt obligations! Credit default swaps! But seriously, it makes more advanced economics possible in this game beyond simple barter trade and I think it would make the game significantly more intriguing.

Just a suggestion: If there were, say, a curio craftable out of a gold coin that were just as good as a bolete or ant empress, or maybe 1/5th as good as a pearl, then this issue would be a lot less ambiguous and gold would probably be more appealing for trade. That, or steel or silver or something maybe, just as long as it's divisible. Then maybe we can talk about signed or custom-minted coins.

Haven with money would be the same as Runescape only with 2.5D graphic.

Not really. Gold wouldn't drop from animals, there wouldn't be NPCs to sell stuff to, steal from or kill, you'll still have to find it yourself and mint it, etc.