Currency discussion

[Ysh]

It seems wrong to me that any faction use currency made from iron and tin. If you can't see why then I am very concerned.

I think it is a bad idea for any player to accept some currency that is intrinsically worthless (e.g. not silver or gold minted from)

Material doesn't matter. Coins are inevitably worth less than the material they're made from, because else why would you mint coins from them instead of just selling the materials directly? It also keeps the value of the coins independent from the value of the materials, and allows any arbitrary value to be the minimum unit of currency (rather than a minimum of 1 gold pebble/silver nugget).

Material obviously does matter. It is not a coincidence coins are made from iron and not gold. Iron is worth less. This is obvious. You mint coins to subdivide the bars into units of 100 instead of using nuggets at units of 10. It allows for more granular tradings. Coins can only be independent from currency value if the coin is worth more, otherwise people will melting down their coins.

The ''Crown'' currency is such an example of this one. Note that I do not try to make this reflect badly on the faction running this market, I think they try to do a good service for the people. But it requires a very high amount of faith that this faction will play fair with the coins, and I don't give out such trust to others easily.

The economy is not that simple. The true value of the Sevillian Crown is directly dependent on the amount of trust people have in the currency. As long as Dis keeps selling things at the market for Crowns, and accept Crowns as payment in their trades, the Crown is valuable. A Crown is, at the very least, worth the value of the goods you can purchase from Dis for it. This is also what should keep Dis playing fair; every Crown in circulation is an IOU from Dis to the person who has the coins. Whenever they spend Crowns elsewhere, that means they're obliged to give away stuff of equal value for no compensation at some point in the future. (There will always remain a number of coins in circulation, however, and that is rightfully practically profit for the minter of the currency.) The moment Dis refuses to accept Crowns as payment, the value of the Sevillian Crown will crash, as will their reputation as traders. This is not to their advantage.

In fact, the lack of universal adoption of the Crown is already lowering the value of the currency. For example, if it had been universally accepted, I would be selling all of my Salt and Gold for Crowns without a second thought. But as it's not universally accepted as payment, I have to keep some high-value items in my home for non-Crown trading; if these had been up for sale for Crowns, it would be more interesting to buy Crowns.

The coins are as valuable as the trust, yes. I say this myself. These coins are worthless because they cannot deserve my trust. They are not as valuable as the goods I can get from Dis from them, they are as valuable as goods I can get from anyone taking them. All Dis has to do is make sure I can get a better deal buying from anyone but them for the coins and they make off like the bandits.

There is no such thing as ''rightful profits'' for minting the currency. Any such profits are a theft from the people who offer the trust.

Imagine if the faction is actively corruption. They mint some currency and buy and sell in it. Others do the same. Now this faction will mint more coins and buy products from the others for basically free (the real value of the currency is that of the metal it's minted as). This is undetectable and allows them to scam sellers using their currency out of their goods.

As I have mentioned before, every Crown is an IOU to the person who receives it. These coins can later be exchanged for goods. Unless Dis refuses to accept the Crowns as payment (which will cause a market crash), the trade is not free, but rather they're paying indirectly.

See above. Your picture of the economy assume that Dis (minting faction) is the only one who can participate in sales. This is not the case.

A second scenario. This is less corrupt, but still a huge advantage for the minting faction at the cost of the trusting factions. The minting faction looks to play fair, but intentionally buys items at better prices (they easily do this, they can make more money if they run out) and intentionally sell items at worse prices. Now, they manage to convert their worthless currency into items and avoid converting their items back into worthless currency. All while they look to be doing good fair business. This is at the cost of suffering of the other players accepting the currency, since this effectively turns into the corruption in scenario 1, just with some unknowing middle man. This is also basically impossible to detect/prove as foul play.

This would flood the market with coins, which would cause massive inflation, which in turn would cause people to lose trust in the currency, which leads to the currency losing value. I assume at least Dis has a decent idea of what they're doing and wouldn't screw up like this.

Yes, they have a decent enough idea to manipulate the currency to not cause a complete crash, but still have benefits as the minters.

The long and short of this one is that the minting faction has massive benefits from controlling the money supply as the cost of the people trusting this money. I do not advise any player to trust these currencies. I would advise any community market to do dealings in intrinsically valuable currencies. I would advise players to never hold onto currency they are not minting themselves for a long period of time as they cannot be a reliable store of value.

I feel high-value items are a far less reliable store of value. Items shift in value as supply and demand fluctuate. Salt is really valuable, but after the Bonfire update suddenly demand for it decreased as Salt became less necessary until the stealth fix this last update. Gold and silk are really valuable now, but what will happen to their value once everybody has their top gear and people are still producing silk and mining gold? I don't trust them to remain at their current value for months. The only item in the game that will mostly retain its value is the Game Time Token (aka Subscription Token), as it's directly linked to an external currency (the real-life US Dollar), though demand for it will also fluctuate over time. Currency from a large faction known to be reliable traders and that accept the currency as payment for a variety of goods is the second best thing we can get.

Value of anything fluctuates in any system. I think you are a bit foolish to put more faith in some other currency than in intrinsically valuable items. This would be true even with perfect trust of the monies.

[VDZ]

There is no such thing as ''rightful profits'' for minting the currency. Any such profits are a theft from the people who offer the trust.

You do not think putting in the effort to create and distribute a (relative to other currencies) reliable currency and performing the trade activities required to keep the value of this currency high deserves to be rewarded by economic advantages? I was glad when I could switch out the August for the Sevillian Crown; it was no longer my responsibility to make sure people got enough value out of selling things to me. Now they just get Crowns and Dis makes sure they're worth something even when I'm not selling much of interest. I think they deserve profits for handling all of that stuff.

Yes, they have a decent enough idea to manipulate the currency to not cause a complete crash, but still have benefits as the minters.

If their actions do not harm the market, what is the problem with them gaining economic benefits from minting the coins? Trade is not a zero-sum game; I trade away stuff I don't need, you trade away stuff you don't need, and both end up getting stuff we do need in return (+value for both). I don't care if Dis gets more value out of the system than I do, as long as I get enough value out of it as well.

[Jalpha]

Provision of currency should be a service provided by an organisation without a military wing. I don't know if this is possible in Hafen but there will always be a distrust of any warfaring faction who develops their own trade hub and currency. DIS has been very quiet for a while now but many vets won't ever let go of the past. I'm not intending to single them out it's just they are the example cropping up here a lot.

I don't think somebody making profit from trade should also have the right to profit from the provision of a currency. It's stacking profits in a manner which seems unfair.

[Ysh]

There is no such thing as ''rightful profits'' for minting the currency. Any such profits are a theft from the people who offer the trust.

You do not think putting in the effort to create and distribute a (relative to other currencies) reliable currency and performing the trade activities required to keep the value of this currency high deserves to be rewarded by economic advantages? I was glad when I could switch out the August for the Sevillian Crown; it was no longer my responsibility to make sure people got enough value out of selling things to me. Now they just get Crowns and Dis makes sure they're worth something even when I'm not selling much of interest. I think they deserve profits for handling all of that stuff.

Yes, they have a decent enough idea to manipulate the currency to not cause a complete crash, but still have benefits as the minters.

If their actions do not harm the market, what is the problem with them gaining economic benefits from minting the coins? Trade is not a zero-sum game; I trade away stuff I don't need, you trade away stuff you don't need, and both end up getting stuff we do need in return (+value for both). I don't care if Dis gets more value out of the system than I do, as long as I get enough value out of it as well.

If they have an economic advantage, this is not a fair market. This is harmful for the market. They cannot have some unfair advantages without doing the harm. I think this is a pyramid scheme system that exploits its trusting users. Just because they do effort does not mean they deserve rewards. People can be motivated to do what is right, not only what it is benefit for them.

And I think you should care about the relative values gained if you will try to be competitive. Otherwise how can you catch up? I understand you will probably say something like ''I cannot compete with a top faction anyway,'' so maybe this is a bit of an esoteric point. We have a difference of opinion here, I think, that cannot be an objective one. (Not that the rest of this is particularly objective either, but it can at least be fun to talk about).

[cecelia]

You are right, the economy is not that simple.
If one faction creates the coins it makes so many issues... A couple immediate ones:
1. You must travel to their market to get the coins, then travel to the place you are buying from to spend the coins. Time consuming and dangerous.
2. That faction can create tin coins at little cost to themselves, travel to your market, buy all your goods, make their own market prices extremely high, force you out of business. Why would they want competition, especially a raiding faction?

[ven]

If one faction creates the coins it makes so many issues... A couple immediate ones:
1. You must travel to their market to get the coins, then travel to the place you are buying from to spend the coins. Time consuming and dangerous.

Personally, I choose the trader that's closer to me, because the risk of being waylaid increases with distance. I'm sure others have the same reasoning.

I think a faction that monopolizes currency would profit a lot from building small trading outposts close to the map corners to make trading and currency exchange easier for those regions.

[LadyGoo]

Erm, I don't get what is your problem?
If you are saying, that people using our currency will at some point find out, that they have no value, I think we have proven last world that we can maintain the currency and it has been benefiting all layers of the society: from the noobs to advanced factions. Right now the market is still being developed, as not everyone have charterstones and opportunity to travel to the market in safety.
If you have problems with coins having higher value than the materials used for them, refer to VDZ's words. Or real-life paper money, idk.
And as for the extremely high prices, we have always been keeping our prices at the same level, if not less that other traders did. To support the market, I have my own topic with the prices and etc. And people were giving me crown coins and I have been giving items back to them. Sometimes they would request something we do not sell. We would still sell the items for higher prices, yes, because we also need the items.
You guys are using some weird arguments.

[Ysh]

Erm, I don't get what is your problem?
If you are saying, that people using our currency will at some point find out, that they have no value, I think we have proven last world that we can maintain the currency and it has been benefiting all layers of the society: from the noobs to advanced factions. Right now the market is still being developed, as not everyone have charterstones and opportunity to travel to the market in safety.
If you have problems with coins having higher value than the materials used for them, refer to VDZ's words. Or real-life paper money, idk.
And as for the extremely high prices, we have always been keeping our prices at the same level, if not less that other traders did. To support the market, I have my own topic with the prices and etc. And people were giving me crown coins and I have been giving items back to them. Sometimes they would request something we do not sell. We would still sell the items for higher prices, yes, because we also need the items.
You guys are using some weird arguments.

You should not take these things as criticism of you personally. You are just the obvious example for us to discuss about easily. Regardless of how well you behave, you are still running a trust based system and this will leave room for paranoia.

[LadyGoo]

You should not take these things as criticism of you personally. You are just the obvious example for us to discuss about easily. Regardless of how well you behave, you are still running a trust based system and this will leave room for paranoia.

Alright. Let's take aside your trust issues with my faction.
I am just stating that your arguments are kind of pointless since no-one stores the currency infinitely. And I doubt anyone has more than 200 coins stored. Most people buy it from the barter stands and purchase some items straightaway.

[Ysh]

You should not take these things as criticism of you personally. You are just the obvious example for us to discuss about easily. Regardless of how well you behave, you are still running a trust based system and this will leave room for paranoia.

Alright. Let's take aside your trust issues with my faction.
I am just stating that your arguments are kind of pointless since no-one stores the currency infinitely. And I doubt anyone has more than 200 coins stored. Most people buy it from the barter stands and purchase some items straightaway.

There is more with my comments than just not holding currency (which I do thinking is some bad ideas). But pointless? Yes, it is pointless. But so is this game, life, and everything depending on where you are standing. I think it is an interesting discussion despite of this.