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(Scroll to the bottom of this post and read the last bit if you don't want look over everything)
I've been passively watching how the economy functions over the months, and have seen many complaints about a "broken" economy along the way. I feel people misunderstand the basis for how it functions and what it really means to have a healthy or broken economy. To explain why the economy is not broken, just different than what many of us assume it should be, I'll offer you a simple definition of what an economy is: the production and consumption of goods or services.
The flow of production, and the consumption of what is produced, is what makes the economy healthy. When that flow stops, you have a broken economy because no one wants to purchase anything, and in turn there's no reason to produce anything. That creates a cycle where no one can buy or sell anything, which creates an economic standstill and the infamous "wheel barrels of money" that can't be used for anything. MassiveCraft is nothing like that, as people commonly exchange money, goods, and services all the time.
The basis for a standard economy is a form of currency, and money holds value as long as there's something to purchase with it. In MassiveCraft, silver is our currency. The reason people assume the economy is "broken" is because of the value of diamonds, which is lower than it should be based on the normal time it takes to obtain them. Diamonds, like any item, can be duped (sadly) and if not caught, then these false diamonds are integrated into the system. However even though the diamonds are too often illegitimate, it's still a form of goods production and since there'll always be a demand for diamonds, they'll always hold some degree of value. Every honest player wishes that diamonds would sustain their true value for time needed to obtain vs. demand for them, but luckily one item does not break an economy built on many other things that can also be purchased.
The diamond is only one form of "produced" goods, and is generally the only good that people actually dupe because of its high need/demand, making most of the other items you see out there legitimate as it should be because it's not worth the effort to dupe something of lesser value. People need anything ranging from spruce logs to sponges, and posts are made in the forums or messages are made in trade chat to show this need. People openly spend money, and they're able to acquire something in exchange for it. If I went into trade chat and advertised I was buying 10 stacks of stone brick this minute, I would eventually find someone who'll sell it at a negotiated price I'm willing to pay. Exchanges are constantly made, which in turn is what makes silver have any value to begin with. That's the sign of a healthy economy, not a broken one.
Going back to diamonds again, because that's the leading cause of the "broken economy" assumption, scams and illegitimate goods are a common place in the real world environment too. It could be argued that false goods can contribute to making an economy healthy to some degree (albeit I still think it's bad to do), but I'll leave that discussion for another time and place. The problem is that diamonds are being viewed as the "gold standard" for the value of silver. It should be viewed as a produced good yes, but not something that holds a rare value because it does not here. Gold can't be duped in the real world, in notable amounts, because there's testing to confirm it's validity. That's why it can hold a standardized value. This is not vanilla single player survival mode Minecraft. Duping/scamming/cheating is going to be there as is as all the legitimate goods and players too. Something cannot be a "gold standard" if it's falsely produced so often. While it's still a highly marketed item, it's not the basis for the entire economy.
As long as there's a demand for goods and services, the economy will be healthy. The value of items or services (like hiring someone to build a castle) is what has standardized the core aspects of our economy naturally. People are only willing to sell something so cheap based on the amount of time it takes to acquire it. That's why enchanted items with high stats hold a lot of value; it takes quite a bit of time for the average person to keep hitting 30 exp and half rely on luck to get an optimal combination of enchantments. People will also pay extra money for a rush job of a good or service, which is also a time factor. Demand of the good or service is a factor, but that's also another discussion; there's plenty of demand for many types of items, which is as it should be.
The reason diamonds hold any value whatsoever even with duping is the majority of people do not cheat the system, and still take the time to mine it the old fashioned way and then sell or use what they gather. The value vs. time spent is still watered down thanks to illegitimate diamonds, but as long as there's people still doing it the honest way, diamonds will always be worth something. Progression is what makes games like Minecraft rather addicting, and cheating puts one at risk for getting caught and losing all of that progression through a ban, which helps keep most people honest within the server rules. If we need to view anything as a "gold standard" for the server's economy, it should probably be time itself in connection with demand of what's being bought or sold.
tl;dr (Still a tad bit long, but cuts to the point)
As long as time spent holds value, and people need items or services, the economy will be able to keep flowing. Diamonds still have value because most people still obtain them the honest way, which takes time, and is why Diamonds are not already 1 copper each even with people duping them. They're also the highest needed item by players, which helps them sustain a value. If it ever reaches a point where grinding a few hours for any kind of resource gains you no monetary value in what you own, or people can offer mass amounts of silver and no one will give anything in return, that's when the economy would be considered broken because it would be at a standstill.
As it is now, the entire MassiveCraft economy is actually healthy because things are constantly exchanged. Silver will buy you the items and services you may need, and all items hold value of some degree if trying to sell it. Even the commonly considered worthless dirt has a (very tiny) value with its low demand, because it still takes time to obtain it and that creates its minor cost. The diamond market alone is what is not as healthy as it could be, but even they still sustain a watered down value, meaning it's not entirely broken either. Since the economy is not based around only one item, but every item and service in the game, it means the MassiveCraft economy is not broken.
I've been passively watching how the economy functions over the months, and have seen many complaints about a "broken" economy along the way. I feel people misunderstand the basis for how it functions and what it really means to have a healthy or broken economy. To explain why the economy is not broken, just different than what many of us assume it should be, I'll offer you a simple definition of what an economy is: the production and consumption of goods or services.
The flow of production, and the consumption of what is produced, is what makes the economy healthy. When that flow stops, you have a broken economy because no one wants to purchase anything, and in turn there's no reason to produce anything. That creates a cycle where no one can buy or sell anything, which creates an economic standstill and the infamous "wheel barrels of money" that can't be used for anything. MassiveCraft is nothing like that, as people commonly exchange money, goods, and services all the time.
The basis for a standard economy is a form of currency, and money holds value as long as there's something to purchase with it. In MassiveCraft, silver is our currency. The reason people assume the economy is "broken" is because of the value of diamonds, which is lower than it should be based on the normal time it takes to obtain them. Diamonds, like any item, can be duped (sadly) and if not caught, then these false diamonds are integrated into the system. However even though the diamonds are too often illegitimate, it's still a form of goods production and since there'll always be a demand for diamonds, they'll always hold some degree of value. Every honest player wishes that diamonds would sustain their true value for time needed to obtain vs. demand for them, but luckily one item does not break an economy built on many other things that can also be purchased.
The diamond is only one form of "produced" goods, and is generally the only good that people actually dupe because of its high need/demand, making most of the other items you see out there legitimate as it should be because it's not worth the effort to dupe something of lesser value. People need anything ranging from spruce logs to sponges, and posts are made in the forums or messages are made in trade chat to show this need. People openly spend money, and they're able to acquire something in exchange for it. If I went into trade chat and advertised I was buying 10 stacks of stone brick this minute, I would eventually find someone who'll sell it at a negotiated price I'm willing to pay. Exchanges are constantly made, which in turn is what makes silver have any value to begin with. That's the sign of a healthy economy, not a broken one.
Going back to diamonds again, because that's the leading cause of the "broken economy" assumption, scams and illegitimate goods are a common place in the real world environment too. It could be argued that false goods can contribute to making an economy healthy to some degree (albeit I still think it's bad to do), but I'll leave that discussion for another time and place. The problem is that diamonds are being viewed as the "gold standard" for the value of silver. It should be viewed as a produced good yes, but not something that holds a rare value because it does not here. Gold can't be duped in the real world, in notable amounts, because there's testing to confirm it's validity. That's why it can hold a standardized value. This is not vanilla single player survival mode Minecraft. Duping/scamming/cheating is going to be there as is as all the legitimate goods and players too. Something cannot be a "gold standard" if it's falsely produced so often. While it's still a highly marketed item, it's not the basis for the entire economy.
As long as there's a demand for goods and services, the economy will be healthy. The value of items or services (like hiring someone to build a castle) is what has standardized the core aspects of our economy naturally. People are only willing to sell something so cheap based on the amount of time it takes to acquire it. That's why enchanted items with high stats hold a lot of value; it takes quite a bit of time for the average person to keep hitting 30 exp and half rely on luck to get an optimal combination of enchantments. People will also pay extra money for a rush job of a good or service, which is also a time factor. Demand of the good or service is a factor, but that's also another discussion; there's plenty of demand for many types of items, which is as it should be.
The reason diamonds hold any value whatsoever even with duping is the majority of people do not cheat the system, and still take the time to mine it the old fashioned way and then sell or use what they gather. The value vs. time spent is still watered down thanks to illegitimate diamonds, but as long as there's people still doing it the honest way, diamonds will always be worth something. Progression is what makes games like Minecraft rather addicting, and cheating puts one at risk for getting caught and losing all of that progression through a ban, which helps keep most people honest within the server rules. If we need to view anything as a "gold standard" for the server's economy, it should probably be time itself in connection with demand of what's being bought or sold.
tl;dr (Still a tad bit long, but cuts to the point)
As long as time spent holds value, and people need items or services, the economy will be able to keep flowing. Diamonds still have value because most people still obtain them the honest way, which takes time, and is why Diamonds are not already 1 copper each even with people duping them. They're also the highest needed item by players, which helps them sustain a value. If it ever reaches a point where grinding a few hours for any kind of resource gains you no monetary value in what you own, or people can offer mass amounts of silver and no one will give anything in return, that's when the economy would be considered broken because it would be at a standstill.
As it is now, the entire MassiveCraft economy is actually healthy because things are constantly exchanged. Silver will buy you the items and services you may need, and all items hold value of some degree if trying to sell it. Even the commonly considered worthless dirt has a (very tiny) value with its low demand, because it still takes time to obtain it and that creates its minor cost. The diamond market alone is what is not as healthy as it could be, but even they still sustain a watered down value, meaning it's not entirely broken either. Since the economy is not based around only one item, but every item and service in the game, it means the MassiveCraft economy is not broken.
[DOUBLEPOST=1358620664][/DOUBLEPOST]And it seems to me that the core of the economy is the price of factions, which will barrel ever change.
