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blankseplocked Isk sink is a stupid idea: because players don't sink it
 
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Marshiro
Posted - 2011.06.26 21:12:00 - [1]
 

A lot of people are worried that the universe is being pumped full of isk and that we need more isk sinks.

Well, that is NOT GOING WORK. There is a lot of isk in the universe because hoarders consider them a "safe" or at least "default" way to store value in the universe. If for some reason people started saving money in tritanium and absolutely refuse to build ships unless they have +500m surplus units at the end of month, then there'd be more and more trit in the universe as the economy ramp up trit production to exchange for the labor of trit hoarders.

NO ADDITION, NOT NEW FEATURE, NO NEW PRODUCT is going to get reduce the hoarding of isk unless it is no longer perceived as a means to store value. Any additional isk sink will just spur additional generation of isk as producers in other sectors move into isk production. The space rich have spoken: they will save their wealth, and they will save it in isk, and they will sell anything and do anything to get the ratters out to shoot more rats so they can have larger isk numbers at the end of the month. CCP have little chance at people selling hundreds and hundreds of hours of labor to increase production in space moneys.

If people don't hoard isk, the purchasing power of isk is going to be far lowered as everything gets far more expensive isk wise as demand for isk drop radically. Ratting would become a sector that pays worst then mining as the economy only has enough demand for isk for npc stores and a few other uses. Most players would move into a new sector that fits either consumption or currently favored store of value.

There is more and more isk in the universe because people refuse to spend it, not that it can't be spent.

Loney
CyberDyne R-D
Posted - 2011.06.28 05:46:00 - [2]
 

Originally by: Marshiro
There is more and more isk in the universe because people refuse to spend it, not that it can't be spent.
Wrong... I spend about 100b isk a day!

Ein Phantom
Posted - 2011.06.28 08:06:00 - [3]
 

@OP You have a lot of that backwards.

Rakshasa Taisab
Caldari
Sane Industries Inc.
Posted - 2011.06.28 08:43:00 - [4]
 

Shin_getter, is that the same ******ed you?

Xtreem
Gallente
The Collective
White Noise.
Posted - 2011.06.28 09:05:00 - [5]
 

Well people that REFUSE to let the isk leave their wallet is a sink in itself surely as it's never going to leave? thus won't affect inflation etc etc


Tammarr
Posted - 2011.06.28 11:24:00 - [6]
 

Divide All Bounties by 10
Divide all mission isk rewards by 10
Remove npc tag buyorders
Make each rat drop a tag



Adunh Slavy
Ammatar Trade Syndicate
Posted - 2011.06.28 18:29:00 - [7]
 

Originally by: Ein Phantom
@OP You have a lot of that backwards.


The op does have a point. We must first recognize that Eve's economy is somewhat inside out of the real world economy. The most significant thing we must realize, to grasp the inside out nature of Eve's economy is that, Bastiat's Broken Window Fallacy does not apply to Eve.

Destruction of goods is a good thing for Eve's economy, it creates demand. In the real world there is unlimited demand as there are unlimited ways to express that demand. In Eve the expressions of demand are limited to the game world. No one can run off and invent anything better than the hard limits of the game. There is no expression of development inside this sandbox.

Take that coupled with the truth that the broken window fallacy is infact backwards in Eve, and combine that with the fact that ISK, although fiat, is indeed a commodity money. It bears no debt upon its creation.

This odd set of truths in Eve's economy, comapred to the real one inverts a number of the things we come to expect in the real world. So not all 'assumptions' such as the one presented are as easily dismissed.

The propensity to save, to which the OP directs the argument, is a curious one in Eve. There is no direct expression of credit in any meangful sense, so long term investments in the direct expression of labor, ISK, seems to stand up quite well as the OP has expressed.

Dretzle Omega
Caldari
Global Economy Experts
Posted - 2011.06.28 18:43:00 - [8]
 

The smart players do indeed contribute ISK to ISK sinks.

They are called traders. They buy and sell often. While their individual wallet and NAV size goes up, and while they start to hoard more and more ISK, a lot of ISK is leaving the economy in terms of taxes and broker fees.

So, there's an incentive there not to just keep ISK in the wallet. The incentive is to make more ISK by moving it around. Individually it looks like I am hoarding more and more. Collectively, ISK is sinking out of the market.

This is true for any ISK sink. The ISK sink has to have a higher perceived value than sitting in your wallet. A skill book is such an example, because the individual can sink some ISK into the skill book and use it (such as, say, Gas Cloud Harvesting) to make more ISK for themselves.

As someone else pointed out, a hoarder is nearly as good as an ISK sink itself, because he is removing himself from the economy. If I open up the ISK faucets (ratting and missions) into my wallet, and hoard it there, it has no effect on the overall economy.

The average player doesn't hoard, though. I've talked to others who have been in the game for years, and do pretty well, but their wallet balance stays relatively low (around the 100's of millions to a billion range).

So, all that speaks to my perception of the OP's topic of hoarding, not whether we need ISK sinks or whatnot. I tend not to worry about that, since I don't have the data. CCP does. I'll go back to enjoying my game and let them worry about it. (Yes, I know, it's a cop out to the conversation.)

Delianora
Posted - 2011.06.28 18:48:00 - [9]
 

What you are not doing is being creative enough...

*4th rig slot for every ship with the calibration to match... there goes another isk sink

*some of the NPC stores that don't have LP stores get "isk stores" for their items...

*add another 10 tiers of ship, but make them cost 2x and 3x per ship type to be built... The cost will help suck stuff out of the economy...

*In other words, the demand ability of this game needs to be tripled or quaddrupled past all other production levels so it increases such a degree of demand WANT that people will be unable to slave for items but will have to spend their isk for it...

If the production capacity of eve is 1 million ships a day, then their must be a demand for 2 million ships per day so that people are forced to buy sub-par ships at astronomical prices and then use SKILL and COOPERATION to win with their subpar ships...

We needs to see people who say, "I'm so glad I had the 30 000 000 isk to buy a maller to match your 30 000 000 isk caracal. Whew! Now let's get out there and play!"

Another avenue is to add "production decrease efficiency"...

For example all the w-hole star effects could be added and augmented to high sec...

A pulsar decreases a systems sec status by .1 per hour. When it reaches 0.0, then it adds .1 per hour. Then you get such a pulsar in jita or amarr...

A black dwarf lowers production from a pos by 50%...

Or the best--a red giant that goes nova... A 1% chance per day of the star going nova... When it does, it blows up all ships and reinforces all ship in the entire system... SO, don't just think isk sinks, think of better and more ways to make EVE harsher and kill more stuff.

Roger Alar
Posted - 2011.07.01 17:04:00 - [10]
 

The easy way to deal with isk is prob assign every produced item a isk value in adition to its res value



Also you get the problem with finite range of goods that stagnates the economy.

If Some sort of open ended research system is introduced you remove that.


Vincent Athena
Posted - 2011.07.01 22:24:00 - [11]
 

CCP data given in the QEN indicated that the biggest ISK faucet is bounties and the biggest ISK sink is Loyalty stores. So an easy way to control the ISK supply is to reduce the bounty on rats and add LP to compensate.

In fact CCP has already done this with Incursions.

Vaylent PrinterOne
Posted - 2011.07.02 03:34:00 - [12]
 

Correct me if i'm wrong, but the ONLY isk sinks are:

LP Store isk costs
Relatively minor taxes and fees
Buying something from an NPC order (none left?)

I feel like i'm missing something. While the only isk faucets are:

bounties
mission payouts
incursion isk
insurance payouts

There's no way to blow up isk. You can blow up materials all day; killing ANYTHING does not remove isk from the system. It actually adds it thanks to insurance.

Valeria Audene
Posted - 2011.07.02 04:43:00 - [13]
 

Originally by: Vaylent PrinterOne
Correct me if i'm wrong, but the ONLY isk sinks are:

LP Store isk costs
Relatively minor taxes and fees
Buying something from an NPC order (none left?)


Planetary Interaction... But it seems so small in comparison. Wish there was more planet options to throw more millions at.

stoicfaux
Gallente
Posted - 2011.07.02 05:02:00 - [14]
 

Edited by: stoicfaux on 02/07/2011 05:02:34
Originally by: Vaylent PrinterOne
Correct me if i'm wrong, but the ONLY isk sinks are:


http://www.eve-search.com/thread/1340775/page/1



1) Purchasing Insurance on Ships that never get destroyed, or the insurance is never collected.
2) Purchasing Medical Clone
3) Installing a Jump Clone
4) Purchasing anything sold by an NPC, Skills, NPC Trade goods, POS Fuel items etc. Anything that is not sold by a player.
5) Broker Fees
6) Tax
7) Rent an Office
8) Release Impounded Items
9) War Declaration
10) Starting a new Corporation
11) Starting a new Alliance
12) Using a NPC Manufacturing Slot
13) Using a NPC Laboratory Slot
14) Purchasing something from the LP Store that requires ISK
15) Using the agent Locater
16) GM actions taken on account where ISK was purchased.
17) GM actions on reimbursement of lost ship/pod.
18) Termination of a character. If the character has ISK in their wallet, AND they are in an NPC corp.
19) Repairing a damaged module or ship in an NPC station
20) Starting a mission which requires a deposit and never completing it.
21) Fines for smuggling.
22) Placing an ad in the corporate registry.
23) Alliance maintenance fees
24) CSPA charges.
25) Creating and/or awarding medals.
26) Building structures on planets.
27) Import and Export to/from planets.


Korah Arnelle
Posted - 2011.07.02 05:11:00 - [15]
 

Originally by: Adunh Slavy
Originally by: Ein Phantom
@OP You have a lot of that backwards.


The op does have a point. We must first recognize that Eve's economy is somewhat inside out of the real world economy. The most significant thing we must realize, to grasp the inside out nature of Eve's economy is that, Bastiat's Broken Window Fallacy does not apply to Eve.


The Broken Window Fallacy does not apply only on the grounds that wealth created doesn't improve the future creation of future wealth (e.g. a battleship doesn't aide in the creation of more battleships or modules created now don't add to product of future creations of the same modules).

Quote:
Destruction of goods is a good thing for Eve's economy, it creates demand. In the real world there is unlimited demand as there are unlimited ways to express that demand.


This is dead wrong both in real life and in a virtual economy. Demand isn't unlimited, it's simply not quantifiable. Quantity demanded for a good is not the same as demand of the good in micro-economics. Demand is something that is related to economic value, but not to the quantity demanded of a good or the supply of the good created in relation to the demand (relative to the price which to which the good is supplied).

Quote:
Take that coupled with the truth that the broken window fallacy is infact backwards in Eve, and combine that with the fact that ISK, although fiat, is indeed a commodity money. It bears no debt upon its creation.

Money in the real world isn't even a true commodity, it's a medium of exchange for future goods (following similar to Say's Law).

Quote:
The propensity to save, to which the OP directs the argument, is a curious one in Eve. There is no direct expression of credit in any meangful sense, so long term investments in the direct expression of labor, ISK, seems to stand up quite well as the OP has expressed.


That's because ISK is more of a script than a currency. It's a coupon to exchange for commodities that can be treated as money (Plex, modules, ammunition, and the like). In essence, the economic value of a single unit of ISK is relative to the utility that it offers in terms of exchange. Hayek wrote on this matter regarding fractional reserve free banking.

Vaylent PrinterOne
Posted - 2011.07.02 17:08:00 - [16]
 

Originally by: stoicfaux
Edited by: stoicfaux on 02/07/2011 05:02:34
Originally by: Vaylent PrinterOne
Correct me if i'm wrong, but the ONLY isk sinks are:


http://www.eve-search.com/thread/1340775/page/1



1) Purchasing Insurance on Ships that never get destroyed, or the insurance is never collected.
2) Purchasing Medical Clone
3) Installing a Jump Clone
4) Purchasing anything sold by an NPC, Skills, NPC Trade goods, POS Fuel items etc. Anything that is not sold by a player.
5) Broker Fees
6) Tax
7) Rent an Office
8) Release Impounded Items
9) War Declaration
10) Starting a new Corporation
11) Starting a new Alliance
12) Using a NPC Manufacturing Slot
13) Using a NPC Laboratory Slot
14) Purchasing something from the LP Store that requires ISK
15) Using the agent Locater
16) GM actions taken on account where ISK was purchased.
17) GM actions on reimbursement of lost ship/pod.
18) Termination of a character. If the character has ISK in their wallet, AND they are in an NPC corp.
19) Repairing a damaged module or ship in an NPC station
20) Starting a mission which requires a deposit and never completing it.
21) Fines for smuggling.
22) Placing an ad in the corporate registry.
23) Alliance maintenance fees
24) CSPA charges.
25) Creating and/or awarding medals.
26) Building structures on planets.
27) Import and Export to/from planets.




Thanks for the complete list. PI, war decs and office rental are big ones that I missed.

Adunh Slavy
Ammatar Trade Syndicate
Posted - 2011.07.02 19:28:00 - [17]
 

Edited by: Adunh Slavy on 02/07/2011 19:36:56
Originally by: Korah Arnelle

Originally by: Adunh Slavy

Bastiat's Broken Window Fallacy does not apply to Eve.



This is dead wrong both in real life and in a virtual economy



Is there a limit to how much money you would allow someone to give you if someone offered you all you desired and in so doing, you would harm no one? If you could invest in a new idea, to increase your wealth, beyond what is known today, investing in your new idea, would you not do so?

My point is that, there is no way for the wealth in Eve, not consumed by the window not being broken, to be used in endeavors beyond the confines of the sandbox, there is an excess of wealth and no where for it to go - that is the point. My take on Bastiat's Window is from the Austrian perspective and that of Bastiat himself and not the Keynesian, which you appear to be taking.

I take it you are not living in a cave? It is a good thing those shiny beads and teeth of mammoth were used as trade. Someone along the way discovered building huts was a good way to collect more shiny beads from cave dwellers, I for one am glad of it.

Originally by: Korah Arnelle

Originally by: Adunh
ISK, although fiat, is indeed a commodity money. It bears no debt upon its creation.


Money in the real world isn't even a true commodity, it's a medium of exchange for future goods (following similar to Say's Law).



Money in the real world, our current system of debt laden fiat 'legal tender': Yes it is a medium of exchange, and yes it is a unit of account. I agree it is not a true commodity, but it represents a commodity often ignored. The commodity all money ultimately represents is labor. Fiat debt paper represents a claim on future labor. Commodity money represents past labor. ISK is more like gold than it is like Dollars or Euros.

Say's law in the simple form applies, "Products are paid for with Products". The commodity exchanged is the abstraction of labor into what we express as "money". Your past labor (gold, ISK, cows, feathers, beads, shells, silver) in exchange for some apples. A claim on future labor (FRNs, ECBNs, Yaun, Yen) in exchange for some apples.

Originally by: Korah Arnelle

That's because ISK is more of a script than a currency. It's a coupon to exchange for commodities that can be treated as money (Plex, modules, ammunition, and the like). In essence, the economic value of a single unit of ISK is relative to the utility that it offers in terms of exchange.



ISK is money. Frankly anything can be money, cows can be money, in fact cows were money for some cultures at one time. As to Hayek and fractional banking, is something of a red herring. To debate the differences between Hayek and Rothbard isn't going to get us any where, that debate continues today.

Hayek's principle argument, "Denationalization of Money" paper, to which you refer if I am not mistaken, was to take away government control of money. He wasn't overly concerned with fractional practices - good money would chase off the bad. ISK is a decentralized money, no 'government' can control its production, nor can any government secretly depreciate its value, it is "denationalized". We could argue that CCP is the "government", but that is out side the sandbox and not applicable to this discussion. I suspect Hayek would appreciate ISK, but who's to really say in that regard.

ISK, although it is indeed a fiat currency, and it is legal tender, it is not laden with debt upon its creation. There is no central bank that issues it in a practical sense. We can argue "Eve Lore", the fictional nature of ISK, but in operation of the sandbox it is commodity money.

And yes, ISK expresses relative utility that it offers, but why? If everyone could just magically create all the ISK they wanted, none of it would be worth anything. It expresses relative utility because it requires actual utility to collect, to gain, to produce - labor.

Mahkal
Caldari
Posted - 2011.07.02 20:00:00 - [18]
 

Can someone explain to me why we should care about isk sinks and isk faucets? There's always talk in the quarterly report about an increase in the money supply causing inflation, but there's never any inflation -- prices tend to go down over time.

Torin
Minmatar
Red Bone Corsairs
Posted - 2011.07.03 06:26:00 - [19]
 

Oddly enough, I find these micro discussions about the virtual economy of Eve to be fascinating.


Far better than the whining going on in General Discussions...

Adunh Slavy
Ammatar Trade Syndicate
Posted - 2011.07.03 07:46:00 - [20]
 

I'll take a stab at it, Mahkal.

There is inflation in some parts of the economy but not all parts. It seems to be most often expressed in those things which have constrained supply. This sounds obvious on its own because it is of course true. The trouble comes when, there is more money in the system to chase those things. When that happens, the more distorted those things will become compared to the rest of the economy.

More money, chasing the same number of things around, the price of those things is going to go up. ISK is like any thing else. The more of it there is, the less it is worth relative to everything else. In a constrained supply situation, with an increasing monetary base, prices increases will be compounded.

In Eve, and other games, they do have deflation in some aspects of their economies. This can be due to a number of things. The most obvious is because the developer adds something new that makes the previous item worth less.
The older thing gets used less, but if as many are being added to the system than are desired, oversupply, their price will go down.

Another aspect in Eve, and most games is, things do not depreciate functionally. I have some of the first ships of a particular class I ever owned to this day. They are functionally brand new. There is no need to replace a brand new ship, even if it is five years old. So why go to the market? In fact, at one time I had so many ships I realized I was just being a pack rat, I just kept dropping them in a can and just kind of lost track of how many were in there. I still have yet to finish selling them off. They are all very moldy and dusty, but appear to work just fine. No complaints from their new owners at any rate.

Also, there is no where for the extra ISK to go. It just keeps packing up in people's wallets. No sense in investing it in any thing too common that doesn't have enough volitility to exploit, and risky to invest in something too expensive that CCP could just change tomorrow. So it sits around and grows and grows. Those things that do have some volitility become more volatile as more and more ISK chases it around. In the real world that sort of volitility can be bad. If it costs you $5 to eat today, but $70 tomorrow, you're not going to be very happy. In Eve though, meh, who cares, no one is starving to death.

Is it good or bad ... don't want too much money creating distortions, and don't want to suck it all down the drain either, or nothing moves. So it's always a balance in that regard.

Likely most of the concern you see on the forums is us attempting to read ahead of QENs and what economic data we have. If the central banker, Dr E in this case whispers "inflation" we space ship pilots go off the deep end. The concern is probably more magnified by us than the facts say. That of course is important, expectations and anchoring those expectations. We live our real lives in an environment of inflation, when we see something else we think something is broken, when in fact it may be just fine.

dicen3
Posted - 2011.07.04 05:58:00 - [21]
 

ISK sink = ships going boom

What game is this again? Hello? Anybody awake here? Come on people.

Adunh Slavy
Ammatar Trade Syndicate
Posted - 2011.07.04 12:58:00 - [22]
 

Originally by: dicen3
ISK sink = ships going boom

What game is this again? Hello? Anybody awake here? Come on people.


Ships going boom does not remove ISK from the economy, granted a little in taxes and broker fees but that's it. Sometimes adds pending insurance numbers.

Tauranon
Gallente
Weeesearch
Posted - 2011.07.05 07:15:00 - [23]
 

Originally by: dicen3
ISK sink = ships going boom

What game is this again? Hello? Anybody awake here? Come on people.


if I blow up an uninsured dominix, it removes ~40 million worth of minerals and adds 18 mil worth of ISK to the system, which I will most likely use to buy another pile of self-mobile minerals to shoot things with. The destroyed modules will vanish from the system, but the person who I bought them from, will still have the ISK I used to buy them with.

ie: no ISK was harmed in the making of this pretty light show. It just changed accounts. The only way I can get rid of ISK in that fashion is to blow up faction modules and then replace them from the LP store.


Telvani
Crouching Woman Hidden Cucumber
Posted - 2011.07.05 13:46:00 - [24]
 

Eve needs more ISK sinks or fewer ISK faucets. Simple as.

The note about rigs is a good point, as well modules to a lesser extent. When these are traded before being destroyed, as almost all are, often multiple times there is tax paid on them so they remove ISK from the game

Also think about the processes for building them (although it applies to many other things) tax will be paid on the market orders for the salvage trade, ISK spent on the blueprints for building, ISK spent on the build slots, and more tax on the final sale. All gone from the game, with none paid back.

More market systems like rigs as well as bounty nerfs will help bring the economy under control

Adunh Slavy
Ammatar Trade Syndicate
Posted - 2011.07.05 18:20:00 - [25]
 

Originally by: Telvani
More market systems like rigs as well as bounty nerfs will help bring the economy under control


We have to conclude it is out of control. Has that been established?


 

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