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Godpool
Posted - 2010.03.31 21:52:00 - [1]
 

Hi, All,

I've read hundreds of posts and all the threads about the current issues, and I want to make some statements, ask some questions, and get some advice in a FRESH thread... The other threads have droned on with lots of ire, spam, and insults and are also somewhat off topic...

From reading all them here is what I think I know...

Postulate: the effective price of all mined minerals is zero as you don't get isk for mining...
Postulate: t1 ship insurance gives you isk for the minerals used to make your ship when your ship dies
Conclusion: since the value of the minerals is zero, and the isk payout lots of isk (like over 160 000 000 isk for a tier 3 t1 bs), then I can make a profit in isk by building ships and just blowing them up...

CCP will change the isk payout to reflect the "lower value" of minerals...

Since minerals are effectively worth "zero"... the price of minerals will "chase the bottom", meaning they will fall, fall, fall until they reach the price of the new insurance payout? Is that right?

One of the problems with minerals being worth "zero" is the t1 loot drop from ratting and the drone regions... therefore, those get nerfed with the idea that there will be some value in the remaining supply of minerals?

This "value" in the remaining minerals will "bring back mining" so people who mine can sell their minerals for a "competitive" isk wage versus the other professions in eve?

Here is the part that I don't understand...

There are so many macro miners who mine with scripts all day in high sec. There are so many ratters in the drone regions that rat with scripts. Why wouldn't it be easier to just ban all of them and leave things the way that they are?

Isn't the new rebalence (granted it's necessary) just arranging deck chairs on the Titanic as long as macros can flood the game with minerals worth zero? I mean what is to stop the macro players from just adding an extra macro account so they make more stuff, sell it for less per unit, but get the same isk conversion?

This is the part of the equation that I don't understand, assuming I kind of understand the above part... I see how the present system isn't sustainable as some people are making a billion isk a day off of just building and self-destructing ships, but I don't see how the new system is a permanent fix without some serious banning of macros?

Thanks in advance for your comments!Laughing


Kuar Z'thain
Amok.
Goonswarm Federation
Posted - 2010.03.31 22:20:00 - [2]
 

Originally by: Godpool

Postulate: the effective price of all mined minerals is zero as you don't get isk for mining...


Stopped reading here.

Time is always worth SOMETHING.

ROSSLINDEN0s Slave
Posted - 2010.03.31 22:32:00 - [3]
 

I think the important thing here is what did you have for dinner? did you have any mushrooms or tomato sause?
plz get back to me asap i need to know!

Courtney Fish
Caldari
Posted - 2010.03.31 22:35:00 - [4]
 

Edited by: Courtney Fish on 31/03/2010 22:35:32
im thinkin ure probably gonna need a golem on this 1,


glad i could help

Rumba Purring
Posted - 2010.03.31 22:46:00 - [5]
 

Here's how I'm thinking about the market price of minerals. (I don't think this is original in any way). It's simply a balance between supply and demand. Anything you do to increase supply and/or decrease demand, price goes down. Decrease supply and/or increase demand, the price goes up.

SUPPLIES OF MINERALS
Asteroid mining: players and macros
Loot recycling
Drone compount refining

DEMAND (through manufacturers buyers)
PvPers' 'green field' purchase of ships
NPC insurance (effectively, they fund replacement purchase)

Here's what you can observe:
1) If insurance payout is reduced, you effectively have fewer ISKs chasing minerals on the market. Therefore mineral price will go down.
2) Reducing minerals obtained through drone killing will increase mineral price.
3) Reducing macromining will increase mineral price.
4) Increasing mineral quantity in ship construction will boost mineral price.
5) Indroduction of new ships in game will boost mineral price
6) improvement in mining method (T3 mining barge for instance) will decrease mineral price.
7) super dense asteroid field will decrease mineral price.

This is my thought any way.

Lexx Khadar
Minmatar
HellForge.
Lucky Starbase Syndicate
Posted - 2010.03.31 22:57:00 - [6]
 

Op. Where on earth do you get the notion that the price of minerals are zero? They have values on the market. and its averages across the empire market that will likely make the effective insurance values for ships in the future.

Tippia
Caldari
Sunshine and Lollipops
Posted - 2010.03.31 23:18:00 - [7]
 

Originally by: Lexx Khadar
Op. Where on earth do you get the notion that the price of minerals are zero?
The fact that there will no longer be anything to keep them up. The fact that production in EVE is entirely subject to downward pressure, unless artificially propped up. The fact that we have plenty of people who don't value their time and/or don't understand opportunity cost.

Effectively getting them down to zero will certainly be hard, but that's the base value of them after this change.

Steve Celeste
Overdogs
Posted - 2010.03.31 23:27:00 - [8]
 

4B isk supercarriers here we come!

Estel Arador
Posted - 2010.03.31 23:34:00 - [9]
 

I detect a stealth-macro-whine.

bff Jill
Posted - 2010.03.31 23:35:00 - [10]
 

minerals are inherently worthless.

time is money?

I could sit here at my desk all day, spending time manually typing AAAAAA over and over again in notepad.

Thats worthless, nobody would pay me to do that, i could not sell that.

Thats mineral production. Minerals are only worth what you can get from insurance by building a ship and blowing it up. That is what gives them their value.


Supply is much more than demand, supply generated only by macro miners and mission runners is much more than demand. Macro miners spend very little actual human time, mission runners generate minerals as a side effect. Those minerals generated by the above will not have any sort of correction, people wont stop mission running if mineral prices drop, and people wont stop macro mining either since even if profits get cut down to 1/100th of what they currently are its still free to do that since it requires no real time.

So the market can not correct the devaluation of minerals by lowering supply, supply is effectively infinite since more minerals are produced than anyone would need to build the ships that get blown up.

The only thing that makes minerals have value is that you can turn them into ships and then blow them up.

remove macro mining and remove t1 module drops from npcs and this could potetialy get fixed, but as long as so many minerals are being produced their value is always going to be based on insurance payoff.

Eric Policky
Posted - 2010.03.31 23:39:00 - [11]
 

Originally by: Tippia
Originally by: Lexx Khadar
Op. Where on earth do you get the notion that the price of minerals are zero?
The fact that there will no longer be anything to keep them up. The fact that production in EVE is entirely subject to downward pressure, unless artificially propped up. The fact that we have plenty of people who don't value their time and/or don't understand opportunity cost.

Effectively getting them down to zero will certainly be hard, but that's the base value of them after this change.


How exactly is the base value 0? By that logic, the base value of EVERYTHING is 0, as all it takes is time to get it. Think about it, everything on earth begins it's life as raw materials that must be collected by someone. Valuing that at 0 effectively values everything at 0.

What you are missing is the supply/demand relationship. As the price approaches 0 (as I've read from multiple people) the supply of minerals will plummet. Who wants to sit there mining for hours and hours if they can just buy the minerals for 0, or they won't be able to sell them for anything (depending on their motivation). Well, what will happen is nobody will supply them, and they will become relatively scarce. Those that need minerals will then offer more money for them, so that they will be preferentially selected by the few sellers left. The price of minerals will increase, so more people will choose to mine to sell minerals. Supply increases, minerals become less scarce, and price will start to fall as sellers decrease their prices to be preferentially selected by buyers. These two forces will balance each other out at some price per unit. This is called equilibrium.

I literally can't believe that anyone thinks that even completely removing insurance will force the price of minerals to 0.

Ai Mei
Starfish Operating Syndicate
Posted - 2010.03.31 23:39:00 - [12]
 

Originally by: Godpool
Hi, All,

lots of stuff




Dear op, miners are hoarding minerals now prices are going to go up really fast. And because of me and my mining corp friends we are going to laugh all the way to the bank as we are keeping all the refines from missions and belts and drones to ourselves now.

Tippia
Caldari
Sunshine and Lollipops
Posted - 2010.03.31 23:52:00 - [13]
 

Originally by: Eric Policky
How exactly is the base value 0?
That's the only value that you can be sure your minerals will yield, now that insurance does not provide a fixed floor. Most of the time they'll give you more, but that's no longer guaranteed.
Quote:
By that logic, the base value of EVERYTHING is 0
No, only of Meta 0 stuff.
Quote:
What you are missing is the supply/demand relationship.
That doesn't affect the base value.
Quote:
I literally can't believe that anyone thinks that even completely removing insurance will force the price of minerals to 0.
No-one is – that's just the new base value of them.

Eric Policky
Posted - 2010.04.01 00:02:00 - [14]
 

Originally by: Tippia
Originally by: Eric Policky
How exactly is the base value 0?
That's the only value that you can be sure your minerals will yield, now that insurance does not provide a fixed floor. Most of the time they'll give you more, but that's no longer guaranteed.
Quote:
By that logic, the base value of EVERYTHING is 0
No, only of Meta 0 stuff.
Quote:
What you are missing is the supply/demand relationship.
That doesn't affect the base value.
Quote:
I literally can't believe that anyone thinks that even completely removing insurance will force the price of minerals to 0.
No-one is that's just the new base value of them.


A) In that case, the idea of a base value is completely irrelevant. You also missed the fact that I was making the real-life comparison. If you are going to consider the base value of something 0 just because it doesn't directly yield money, then you have to consider things like cars and houses to have a base value of 0 because the raw material collecting (mining iron, cutting down trees etc.) is not literally yielding money, but rather just an item that can be sold. And the only amount you can be GUARANTEED for any of the raw materials is 0. What's the point?

B) Just to be clear, I consider the equilibrium value to be the base value, to which you would compare the price to decided whether to buy/sell the item. The equilibrium value will never be 0 unless every day every player in EVE received a free injection of unlimited minerals into their hangar.

C) You are actually incorrect in saying only Meta 0 stuff would have a base value of 0, unless you too are considering base value to be equilibrium value, in which case I'm not sure why you are saying anything has a base value of 0. The only way the non-meta 0 items would have a "base value" over 0 would be if there were NPC buy orders for them.

D) I have read plenty of posts claiming that the prices of minerals would approach 0 if insurance were to be removed. People are in fact claiming this.

Tippia
Caldari
Sunshine and Lollipops
Posted - 2010.04.01 00:25:00 - [15]
 

Edited by: Tippia on 01/04/2010 00:28:40
Originally by: Eric Policky
A) In that case, the idea of a base value is completely irrelevant.
It's more a case of it having become irrelevant. Before, it was a key factor in how the economy worked – now that factor is completely arbitrary.
Quote:
You also missed the fact that I was making the real-life comparison.
No, I just ignored it because real life is irrelevant. The key difference here is that EVE offers a 100% recycling level, which means that the base value of any Meta 0 item can be expressed in the combined base value of its component parts.
Quote:
If you are going to consider the base value of something 0 just because it doesn't directly yield money,
That's not quite the issue – instead, it's a matter of it not yielding money even indirectly, and that the mechanics and nature of the game and its players will now be able to pressure the indirect measures downward.
Quote:
B) Just to be clear, I consider the equilibrium value to be the base value, to which you would compare the price to decided whether to buy/sell the item.
Well, that's not what it is. The base value is the hard-coded number that determines the lowest possible value of… well, everything Meta 0. Since that number is no longer hard coded, the base value no longer exists. The equilibrium is something else, which, granted, may be of more practical use for your every-day market dealings.
Quote:
C) You are actually incorrect in saying only Meta 0 stuff would have a base value of 0,
True enough. It would have the base value of the manufacturing slot installation cost divided by the batch size.
Quote:
The only way the non-meta 0 items would have a "base value" over 0 would be if there were NPC buy orders for them.
They'd have a value based on availability compared to T2 and its inherent costs.
Quote:
D) I have read plenty of posts claiming that the prices of minerals would approach 0 if insurance were to be removed.
Approach ≠ force to. Oh, and one of the people claiming this – albeit obliquely – is the CCP economist.

Eric Policky
Posted - 2010.04.01 00:36:00 - [16]
 

When a ship explodes, you can not salvage 100% of the minerals used to build it. This alone is enough to guarantee there will always be SOME demand for minerals, meaning they will be worth SOMETHING.

Please explain to me what the hardcoded value for non-meta 0 items is that gives them an inherently above-0 "base value". Now explain to me how this fails to apply to meta 0. The fact that players can use minerals to build meta-0 items merely means that they have a larger supply, and therefore will cost less (note: not 0! The next time that somebody takes the time to build something just to put it on the market for 0, or mines something just to put it on the market for 0, will be the first time). There is no guarantee that anyone will ever buy your meta 3 item, therefore it must have a base price of 0 by your logic. Why? Because meta X items are acquired in the same way as minerals, by a player doing some in-game action that takes time in order to find it. The only difference is the relative quantities, which incidentally is the reason some things cost more than others.

The fact that EVE offers a 100% recycle is a "bad thing" for mineral prices, but it does not make them inherently worthless. Color me skeptical on the idea that insurance is the only thing keeping the EVE market afloat.

Morrn
Gallente
Organized Chaos Inc
Enemy-Fleet
Posted - 2010.04.01 00:44:00 - [17]
 

Complex economies are complex.

Ten Bulls
Minmatar
Posted - 2010.04.01 00:51:00 - [18]
 

Originally by: Tippia
Originally by: Lexx Khadar
Op. Where on earth do you get the notion that the price of minerals are zero?
The fact that there will no longer be anything to keep them up. The fact that production in EVE is entirely subject to downward pressure, unless artificially propped up.


You've heard of Supply and Demand right, well its the demand thats the upward pressure.

If someones ship gets blown up, and they want another one, they have to buy or make it, that creates a demand.

I have trouble believing your post was serious.

Akita T
Caldari Navy Volunteer Task Force
Posted - 2010.04.01 01:15:00 - [19]
 


You could say there's a lot of people that value their time very low, but to call it practically zero is quite unfair.

If you want to know what will happen to mining in general or mineral prices... just look at ice harvesting and ice products for a "hint".
ALL of ice production is used up by players, with no NPC intervention of any kind, and there is no other source of ice products other than ice mining.

Ore mining will probably be more rewarding than ice mining is now, but not by that much more.

bff Jill
Posted - 2010.04.01 02:58:00 - [20]
 

Originally by: Ten Bulls

If someones ship gets blown up, and they want another one, they have to buy or make it, that creates a demand.



What is it that you think will happen exactly?

People do not need to work to build a ship, they just set things in motion, building and supplying ships is a passive money factory. Plenty of people have industry alts they spend a few minutes on and that's it. Its not like the real world where you have to pay people to do it, who spend real time doing it. There is almost zero cost to produce a ship. The cost is more or less the cost of the materials which is priced in reaction to the cost of the ship, not the other way around, because mineral supply exceeds demand.

The reason is because there are passive forms of mineral creation which do not require 'work' to produce, so you cant say if demand goes down mineral production will go down to counter it, eve doesnt work that way.

Eric Policky
Posted - 2010.04.01 12:11:00 - [21]
 

What passive form of mineral production? No matter how you go about getting minerals, you have to undock and go DO something to get them. Yes, even if you are just recycling modules from missioning to get your minerals, that is still not passive.

And what will happen if the mineral price tanks? It will be more profitable to sell that crappy meta 1 item than melt it into minerals and sell those, so fewer modules will be converted to minerals. Fewer people will go mine, because they can't make much money doing it. The mineral supply will decrease, which will increase the price.

By the way, the fact that the mineral price is set by insurance now does not even mean that the natural equilibrium price is lower than the current price, it just means the price is artificially pegged at a level high enough that a lot of people find it profitable to go out and get minerals, so the supply is artificially high. As the price fluctuates in the short term (downward), these people will go find an alternate source of income. Once the mineral supply finds it's true demand partner, at an actually sustainable level, we will find out what the true price of minerals should be. It is possible that this price is the same as the current price (not likely, but possible).

Melor Rend
Posted - 2010.04.01 12:39:00 - [22]
 

Postulate: if I find a gold vein in my garden and "mine" it then the value of these minerals is zero.

Conclusion: I can sell it to the next best junky on the street for 5$ and make huge profits since I've turned something with 0 value into something with 5$ value.

Tell me when you notice the mistake.

Zartrader
Posted - 2010.04.01 12:45:00 - [23]
 

Edited by: Zartrader on 01/04/2010 12:46:09



The effect of Insurance on mineral prices is well understood and the fact that botters and those with no concept of opportunity cost, or no desire to stop mining, driving prices down also known. The initial arguments were about CCP changing insurance without making any statement on other changes to compensate. Now they have made these changes, and they certainly do affect mineral prices, two things may happen:

1. CCP have got their figures right (which we can't possibly know with the information we have) and minerals settle at a price acceptable to players.

2. CCP have it wrong and it needs further adjustment.

So the whole discussion has shifted and the old discussion is redundant. So hundred's of posts is irrelevant as they do not reflect the reality today, after the blog. We just have to wait and see. I doubt CCP will know the full effect yet, in fact they can't with any certainty which I'm sure they will know. But the initial fear CCP seemed to ignore the whole issue is gone.

So anyone can speculate as much as they like and it's impossible to say anyone is right or wrong with the information we have.




Kazuo Ishiguro
House of Marbles
Posted - 2010.04.01 13:57:00 - [24]
 

Originally by: Akita T
Ore mining will probably be more rewarding than ice mining is now, but not by that much more.


On the other hand, with lower ship prices, stemming from lower mineral prices, the same amount of time spent mining will probably buy more ships than it currently does.

K'uata Sayus
Posted - 2010.04.01 14:34:00 - [25]
 

People use bots to generate Isk to buy Plex. If little or no Isk can be generated by using bots, they gradually disappear.

Which implies a veritable collapse of the Eve economy, which means Eve is dying/dead.

We all buy into the shared illusion of money having value, it is the grease that keeps the wheels of commerce turning, it is the unit of measure of relative worth.

I want to buy this ship now, but I can wait until the value drops to 0 when the minerals to build it are worth nothing.

As you might expect I'll use my Isk to buy the ship now, because the chance of the ship cost falling to zero will be the same time as when hell freezes over, or whatever example of eternity you want to use.

TBH the OP has a specious set of postulates that can only be bandied about in casual conversation by worthless college economics professors sucking on their pipes in the faculty lounge.

Leocadminone
Posted - 2010.04.01 16:31:00 - [26]
 

Originally by: Godpool


Postulate: the effective price of all mined minerals is zero as you don't get isk for mining...


There are so many macro miners who mine with scripts all day in high sec. There are so many ratters in the drone regions that rat with scripts. Why wouldn't it be easier to just ban all of them and leave things the way that they are?




First, you postulate something that is incorrect. The effective price of a mineral is WHATEVER YOU CAN SELL IT FOR ON THE MARKET, not "zero".

This value is not fixed, as there are a lot of variables involved - among them being "sell local" vs. "Haul to somewhere that they are worth more", "sell to Buy orders" vs. "set up sell order", and the actual variations on the market itself - but the EFFECTIVE VALUE OF A MINERAL IS NEVER ZERO.

This is why a lot of idiots that build stuff end up losing money - they think that the minerals that they use to make the stuff are free, when they aren't.



As to the macros - there is 1 major issue there (couple other minor ones but I doubt they have much effect).

CCP gets MONEY (real life money) for every macro account in the game that is active. They mey get it indirectly via those accounts buying PLEX from the in-game markets, they might get it directly, but they still GET the money one way or the other. Given how small the Eve Online playerbase is, and what appears to be a very large macroer percentage of the actual live paid accounts are at any given point, it would cost CCP quite a bit to proactively go after all macroers.
This conflict of interest seems to be why my girlfriend and I had so many petitions about OBVIOUS macrominers ignored, to the point we gave up on petitioning them - CCP doesn't actually CARE as long as they're not using their procedes for RMT, or are being so invasive that they're driving other players out of the game.

Ai Mei
Starfish Operating Syndicate
Posted - 2010.04.01 16:52:00 - [27]
 

Just as a heads up,

Mineral prices in jita have gone up about 15% in the past 2 days.

Obsidian Hawk
RONA Corporation
RONA Directorate
Posted - 2010.04.01 17:28:00 - [28]
 

Originally by: Ai Mei
Just as a heads up,

Mineral prices in jita have gone up about 15% in the past 2 days.


I noticed this too, they were ~ 2.6 per trit two days ago and now they are about 2.8-2.9 per on average. oh happy day time to dust off my retriever.

Tippia
Caldari
Sunshine and Lollipops
Posted - 2010.04.01 17:45:00 - [29]
 

Originally by: Ten Bulls
You've heard of Supply and Demand right, well its the demand thats the upward pressure.

If someones ship gets blown up, and they want another one, they have to buy or make it, that creates a demand.
Have a look at the Economy presentation from Fanfest 2008, 20 or so minutes in. The problem is that Supply and Demand in EVE does not quite work the way it does in real life.

Slade Trillgon
Endless Possibilities Inc.
Posted - 2010.04.01 17:57:00 - [30]
 

Edited by: Slade Trillgon on 01/04/2010 20:33:54
Originally by: bff Jill
minerals are inherently worthless.

time is money?

I could sit here at my desk all day, spending time manually typing AAAAAA over and over again in notepad.

Thats worthless, nobody would pay me to do that, i could not sell that.


Since you wasted your time not making money you are now in the negative and can not pay the bills. Time is money. Whether you make money, or loose money in your time, is up to you. The time spent doing, or not doing, whatever it is you could use your time to make money, counts toward your gains or losses of income.

EDIT: Edited the last two sentances to make more sense; hopefully that is Laughing


Slade


 

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