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There was a discussion recently in my org about how Quanta would be given value, and the ore buying bot was brought up. This seemed like a great way to kick-start the economy, and maybe even revive it if need be. However this got me thinking: if the DU economy is built to resemble real life as much as possible, what happens when money begins to stop moving as freely, and players begin to hoard? The other user in the conversation suggested that prices would all drop due to no one being able to afford anything with little money being circulated. In my mind, this equated to mass poverty throughout the population of Alioth and beyond. Recently I have been reading that one of the ways poverty is being dealt with worldwide is using a type of loans called "micro-credit loans", which are not loans to governments or organizations to help people indirectly, but instead are given directly to people in hopes of the impoverished starting their own sustainable business.

 

While much of the situation surrounding these loans is not applicable, one key part is: where the loans go to, the people. If loans are given to the people by some bot, with low interest rates in times of economic turn-downs, then players could kick-start their organizations again, and possibly revive the economy. These loans would be repaid in small payments weekly or bi-weekly (as in real life they are usually repaid monthly or bi-monthly).

 

Whether this idea is fulfilled by some banking organization, an in-game mechanic, or both, remains to be seen, but this idea is one I believe should not be ignored, so a safety net can be created for the economy of Dual Universe.

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On 3/20/2019 at 10:59 PM, Queejon said:

The other user in the conversation suggested that prices would all drop due to no one being able to afford anything with little money being circulated.

Price will drop - in other words, the quanta increases in value over goods - as quantity of Goods continue to increase while supply of Quanta remain capped. This is called "Deflation". There is no accurate way of measuring Price Level. Just like how we measure PPP, we measure this based on some certain Basket of Goods Index (this measurement that we use is CPI).

 

A market works based on Supply vs Demand. Injecting more money into the market will increase the demand for Goods as there are more money available. These consumers will bid the price of the Goods up, causing Inflation. The exact opposite happens when the money is capped and Supply of Goods continue to increase.

 

On 3/20/2019 at 10:59 PM, Queejon said:

what happens when money begins to stop moving as freely, and players begin to hoard?

A smart person will actually spend the Quantas, not hoard them.  

Just look at a Stock Market Crash; when prices of Stocks dramatically decline, you wanna know what can follow? A Market Bubble! You will invest in this Bubble Burst by shopping for Stocks, and then when the Bubble happens, you will sell the Stocks during the highest peak for Capital Gains.

 

Some rich people keep a crisis account (they have some funds set aside) to be used during a financial crisis (an opportunity to make a lot of money). Every time a financial crisis happens (such as the 2008 Stock Market Crash in the US), people who are smart become wealthy from it. Smart people also borrow money to be used on a financial crisis. You will shop for assets which are currently on sale now, you will then sell them when the market tanks again. 

 

When Quanta is evaluating, that is a "Currency Crisis" (everything is becoming cheaper because of Deflation). You will go shopping for Assets during the lowest peak of price of Goods. What is certain to follow? Inflation because NQ will inject more Quantas in the future! When that happens, the Goods that you are holding now will be worth more because of the Inflation. At the highest peak of the Inflation is when you will sell them for Quantas when they are worth the highest.

 

So it's better to hold onto Goods during a Currency Crisis.

 

On 3/20/2019 at 10:59 PM, Queejon said:

The other user in the conversation suggested that prices would all drop due to no one being able to afford anything with little money being circulated. In my mind, this equated to mass poverty throughout the population of Alioth and beyond.

Deflation (which is a Financial Crisis) doesn't directly result to poverty, it results to Recession (an economic activity slowdown). Because there is less money in the market, the spending is less (this is a negative Demand Shock). Money in real-life generates work - without money, nothing moves. This is not how the game works though, but this is how it works in real-life. 

 

How can a Recession affect Supply Shock adversely? Lack of Demand due to lack of Money Supply creates less Production! Less Production = less Goods.

 

On 3/20/2019 at 10:59 PM, Queejon said:

Recently I have been reading that one of the ways poverty is being dealt with worldwide is using a type of loans called "micro-credit loans", which are not loans to governments or organizations to help people indirectly, but instead are given directly to people in hopes of the impoverished starting their own sustainable business.

If you would look at the history of Microcredit, the concept originated from Grameen Bank (a Community Development Bank) of Bangladesh. The idea is to provide Unsecured Loans to the poor without any need for Collateral (Security), Financial Statements, and Credit History & Rating. What do you think? That a Loan have no risks to the Creditor? This is the reason they ask for the requirements in the first place! The better the requirements you possess, the more money the Creditor is willing to lend to you. That is how it works in real-life, as almost all Loans are Secured Loans! A Creditor will not lend certain amount of money to someone who cannot pay it back.

 

Look at a Mortgage Loan; A Creditor will provide you the Loan for your purchase of a Real Estate property. What happens should you default on your financial obligation? They can legally repossess your house and put it on a Foreclosure. The property that you spent the Mortgage Loan on, is the Security. Car Loans work the same way in which the car is the Security.

 

Most Student Loans are Unsecured Loans that can either be provided by the Government or Private Banks/Institutions. They don't ask for any requirements but a Citizenship. But, they do ask for a co-signer. If you default on your Loan, your co-signer is responsible for the payments. 

 

Unsecured Loans are risky for the Creditors.

 

So who is willing to provide this "Microcredit"?

 

Microlenders, their contributors, and their programs are non-profit. Bank of America (a Public Bank) are one of the many non-profit grantors to Grameen Bank. I don't like the whole concept of providing Unsecured Loans through charity funds (non-profit funds), as if the world should work through charity! You might wanna start reading more about Microcredit! The funds come from non-profit organizations or non-profit grants.

 

Is this the kind of program that you advocate? A charity program? As in Secured Loans are unfair and the poor are entitled to Unsecured Loans funded through charity? They are entitled to the leverage of debt because they are poor, when almost all people in the world borrow through Secured Loans that have requirements?

 

On 3/20/2019 at 10:59 PM, Queejon said:

but instead are given directly to people in hopes of the impoverished starting their own sustainable business.

That's what Investments are for. If they really have a good business idea, Investors will fund it. If it's not a good one, no Investors will Invest in it, as it is beyond the Risk Tolerance of Investors. Why would you loan to people who have no Asset and Credit Rating, and at the same time cannot get Investments? It's a debt trap! If their business idea really works, they should be able to acquire Investments.

 

There are many forms of Investments right now for start-up companies with potentials such as Novaquark. Kickstarter (not an Investment, but a great way to acquire funds), Angel Investors, Venture Capital, etc. These are what those poor people need and not entitled Unsecured Loans.

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May I ask why the market-bots on the Arkship don't buy an unlimited amount of resources from players? (At least for resources, that can be mined on Alioth)
Why does the amount of quanta in the game has to be limited?

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1 hour ago, MaltoSigma said:

May I ask why the market-bots on the Arkship don't buy an unlimited amount of resources from players? (At least for resources, that can be mined on Alioth)
Why does the amount of quanta in the game has to be limited?

If I'd read correctly, then NQ was trying to simulate the DU economy as closely to real life as possible. In my mind, this would mean limiting inflation enough  that it doesn't get out of control, but letting it go on enough for the economy to grow. In my opinion, this would mean not keeping the bot on at all times, but maybe most of the time. 

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I think you guys are thinking too hard about it. The market bots can stay indefinitely without affecting the market, just being there to stop deflation. This is because players will put buy orders up that are worth more than the bots so that they can buy stuff for their trading. In my opinion this is a really good system, because it will keep the average value of quanta level 

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There are still 2 open questions about the micro-loan system for me.
1. If a player's attempt to make profit with his or her investment fails, will it be very frustrating?
2. Could this also be done by a player organization? (Then there won't have to be a built in loan system.)

I've read about market bots on the wiki and they want to permanently remove them after some time and only implement them again, if it really is necessary for some reason.
The only idea, I could come up with, that could counter inflation in a DU with market bots being available permanently, was implementing a market, where you could buy cosmetics (outfits, fireworks, music, etc.) for quanta on the arkship. It would depend on the players though, how much they will want to invest in these things. These would have to be things, that are desirable to use in social interaction or have an aesthetic value and a lot of them should be consumables (having a one time use effect).

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25 minutes ago, nzwoodturner said:

I think you guys are thinking too hard about it. The market bots can stay indefinitely without affecting the market, just being there to stop deflation. This is because players will put buy orders up that are worth more than the bots so that they can buy stuff for their trading. In my opinion this is a really good system, because it will keep the average value of quanta level 

If they put buy orders for more money than the market-bots, where do they have the money from?

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7 hours ago, MaltoSigma said:

If they put buy orders for more money than the market-bots, where do they have the money from?

Amassed wealth

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7 hours ago, MaltoSigma said:

There are still 2 open questions about the micro-loan system for me.
1. If a player's attempt to make profit with his or her investment fails, will it be very frustrating?
2. Could this also be done by a player organization? (Then there won't have to be a built in loan system.)

I've read about market bots on the wiki and they want to permanently remove them after some time and only implement them again, if it really is necessary for some reason.
The only idea, I could come up with, that could counter inflation in a DU with market bots being available permanently, was implementing a market, where you could buy cosmetics (outfits, fireworks, music, etc.) for quanta on the arkship. It would depend on the players though, how much they will want to invest in these things. These would have to be things, that are desirable to use in social interaction or have an aesthetic value and a lot of them should be consumables (having a one time use effect).

1) Of course it will be frustrating, and yes it should have consequences of some sort. Even in games, if there are no consequences, the rewards mean nothing. Now it shouldn't be to the level that they must restart the game in any large way, but it should feel as if something was lost. 

 

 

2) I'd suggested a player organization possibly run it in my original post, but the problem with that is it still must be backed by a game mechanic. If there are to be player banks of any sort that deal in Quanta, then Quanta must be able to be transfered as an item would, stored and locked away in a storage container, and not in some inventory.

On top of this, players would have to drop Quanta on death or from serious damage so that there is incentive to store Quanta somewhere safe. 

 

Personally player run organizations to safe hold Quanta because it is treated as an item you drop on death is something that appeals to me greatly, though I'm sure it makes many feel the opposite. 

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5 hours ago, Queejon said:

Personally player run organizations to safe hold Quanta because it is treated as an item you drop on death is something that appeals to me greatly, though I'm sure it makes many feel the opposite.  

it does appeal to me too - but only because I love to scam ppl to get their hard earned money ;)

I would never ever give away my quanta to anyone. Never. Nope

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9 hours ago, Queejon said:

2) I'd suggested a player organization possibly run it in my original post, but the problem with that is it still must be backed by a game mechanic. If there are to be player banks of any sort that deal in Quanta, then Quanta must be able to be transfered as an item would, stored and locked away in a storage container, and not in some inventory.

On top of this, players would have to drop Quanta on death or from serious damage so that there is incentive to store Quanta somewhere safe. 

 

Even NQ CEO Baillie said, he doesn't know, how the game society will look like. (although maybe he has a good idea about it already)
But I think you're right in that there can't be a player owned bank, as long as quanta is not handled as an item.
Also like Eternal said, these micro-loans would be a bit like charity, which also indicates, that we won't see this from players.

This would both speak in favor of the micro-loan idea.
 

Do you think, this should be introduced at the start of the game, or only later, when the market bots are removed?

 

10 hours ago, Queejon said:

Amassed wealth

So they would buy resources for higher prices than the arkship market price. Then make products, that they would sell for a profitable price. Bought by buyers with quanta, that they got from... mining?
I'm not good at economics, so maybe I'm confused here for no reason.
Also, theoretically anything in the game can be achieved without the use of quanta at all, so I'm giving this too much thought maybe.

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On 3/22/2019 at 7:36 AM, MaltoSigma said:

If they put buy orders for more money than the market-bots, where do they have the money from

They will have the quanta from when there were no buy orders lower than not price. With permanent market bots, the price for ore will fluctuate just above the bots buy price on average, because when you just have the bot buying stuff you will have inflation, but when you have the players buy orders you will have deflation

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7 hours ago, nzwoodturner said:

They will have the quanta from when there were no buy orders lower than not price. With permanent market bots, the price for ore will fluctuate just above the bots buy price on average, because when you just have the bot buying stuff you will have inflation, but when you have the players buy orders you will have deflation 

I thought, when a player buys from a player, then you have neither inflation nor deflation.

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3 hours ago, MaltoSigma said:

I thought, when a player buys from a player, then you have neither inflation nor deflation.

Do you consider a player decide offline or accumulate so much wealth and left no Quanta follow in the market ? Bot will inject money into the game so basically, there are only inflation and like he say everything will just above the ground price.

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7 hours ago, MaltoSigma said:

I thought, when a player buys from a player, then you have neither inflation nor deflation.

That won't be causing the deflation, what will be producing it is players leaving the game with lots of quanta, therefore taking it out of circulation, players joining the game, thus needing more quanta, and more mats entering the game, lowering the price of minerals.

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8 hours ago, MaltoSigma said:

I thought, when a player buys from a player, then you have neither inflation nor deflation.

That is incorrect. When a Player buys from another Player, there will not be any Quantitative Easing from the Bots. While at the same time, quantity of Goods in this game are increasing because of continued production in the game.

 

The economy is growing continuously and you have no Quantitative Easing. That will drive the Price Level lower and lower because Supply is increasing continuously over unchanging Liquidity. As the OP already mentioned, people during this period will hoard their Quantas. People who are holding Goods will lower their price just to make a sale because Aggregate Supply exceeds the Aggregate Demand. People like myself will hold onto Goods instead, because I know Price Level fluctuates based on Supply vs Demand.  

 

@nzwoodturner is correct.

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Ok, so there will be different "money sinks".
But will there also be "product sinks"? When building material is used to make a building, it's gone from the market. When a ship is destroyed, it is (partly?) reverted to building materials. (Reducing the value the product had gained by the process of building it)
So materials will always be used, they can be used up very fast and if you hoard them (in neutral territories), chances are increasing , that they will be robbed from you.

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9 hours ago, MaltoSigma said:

But will there also be "product sinks"? When building material is used to make a building, it's gone from the market.

That is called a Secondary Sector. The extraction of raw resources is a Primary Sector; Manufacturing and Construction are Secondary Sectors; Services, Wholesaling, and Retailing are Tertiary Sectors. 

 

That is how an economic activity works. What else do you do with raw resources but to supply them to Secondary Sectors? What else do you do with finished products but to supply them to Tertiary Sectors? All of these Sectors have Market Values.

 

When building materials are used to make a building, the Market Value of the building should be more. If it's not, it cannot ever promote an economic activity because it's an operational loss. 

Tertiary Sectors should have the most Market Value, followed by Secondary, followed by Primary, otherwise the logistics is pointless.

 

What happens when you construct a building? The Market Value of that building should be more, or as an Asset, the fair Market Value of the Asset and profit from Services should be worth more (you can always Liquidate an Asset. An indication that you are profiting is Total Revenue exceeds Total Expenses. Asset value + net profit should be worth more than construction Materials and construction Expenses). If this is not the case, then you are operating at a loss!

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7 hours ago, Eternal said:

What happens when you construct a building? The Market Value of that building should be more, or as an Asset, the fair Market Value of the Asset and profit from Services should be worth more (you can always Liquidate an Asset. An indication that you are profiting is Total Revenue exceeds Total Expenses. Asset value + net profit should be worth more than construction Materials and construction Expenses). If this is not the case, then you are operating at a loss!

Isn't it going to be something like : Asset value = Materials value + Blueprint value + Component creation value ?

"Component creation value" => Component may take time, skills and workstation to create.

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@Yuuyake Very good question! I was actually talking about real-life model (which is what I would prefer).

The way that the Devs plan to design the economy, is Players will be able to sell Blueprints that cannot be duped and can be used to produce limited amounts of Constructs only (like only 10 or something like that).

This means that the people who will buy Blueprints will have to shoulder the required Material costs to produce physical Constructs -- Material costs is on the Consumers along with the Blueprint cost.

The Market Value of Blueprints should be more than their total Development costs -- if they're not, there is no profit. Blueprint Development is the Secondary Sector of this game.

Tertiary Sector is the people who will buy these Blueprints, shoulder the Material costs themselves to produce physical Constructs, and use these Constructs to create Market Value by providing Services. You cannot provide Services without Assets (physical Constructs is one of them). Again, there must be profit on this Sector otherwise this whole logistics is pointless.

I don't know if you could ever Liquidate Assets (physical Constructs) in this game. I would prefer that we could by being able to sell physical Constructs, otherwise it would suck! If you could never Liquidate such Assets, then it counts as an Expenditure.

We bought a developed Fish Farm + Land Property in real-life that has no tenant. We don't count what we spent to purchase the Asset as an Expenditure in our Fish Farming Business -- the Asset has value in the Real Estate Market and we can always Liquidate that Asset. I know the local Real Estate Market well and I always update myself -- I have been studying it since like years ago.

Imagine running a business where Assets could never be Liquidated -- it will be harder to make net profit and your risk is higher!

I would highly recommend that this game give us the ability to Liquidate Assets (physical Constructs). If you can never Liquidate, you can never exit!

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4 hours ago, Eternal said:

Blueprint Development is the Secondary Sector of this game.

As is the component creation.

4 hours ago, Eternal said:

Tertiary Sector is the people who will buy these Blueprints, shoulder the Material costs themselves to produce physical Constructs

For a simple construct yes, but for ones with complex components, they will also have to buy it, or at least buy the service of building it (if it's not one of their specialty).

4 hours ago, Eternal said:

You cannot provide Services without Assets

There is many services witch don't require assets (or not directly) => Intel, advice, management,  thievery,  murder, communication , trade, teaching...

Assets make them easier and more effective, but you could start a service with only your brain .

(Not talking about organ traffic here, as it will count as Primery sector activity ! ^^)

4 hours ago, Eternal said:

I don't know if you could ever Liquidate Assets (physical Constructs) in this game. I would prefer that we could by being able to sell physical Constructs, otherwise it would suck! If you could never Liquidate such Assets, then it counts as an Expenditure.

The right management will indirectly allow it, with a barter mechanism.

And you could always mine back the materiels and sell the component => Only the blueprint cost will be lost.

4 hours ago, Eternal said:

Imagine running a business where Assets could never be Liquidated -- it will be harder to make net profit and your risk is higher!

Well... The risk of having your asset destroy or steal is much more likely than to have some rich problem as loss over asset restitution ! ^^

I think profitability will be calculate on a "annihilation risk per day" ! ^^

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