Crafting Money (was: RE: [MUD-Dev] Star Wars Galaxies: 1 characte r per server)

Ron Gabbard rgabbard at
Fri Jan 10 08:32:43 New Zealand Daylight Time 2003

From: <bhoyt47 at>
> "Andrew L. Tepper" <teppy at> wrote:

<EdNote: Egregiously long quote trimmed>

> An honest to goodness banking system.  The step you described in
> your post were really quite innovative.  But why not take it a
> step further.  Instead of having players create their own
> currency, how about letting players LEND in a formally, structured
> way?  Banks enjoy having fractional reserves because doing so
> allows them to invest the other money.  The incetive for
> individuals to store their money in banks is that it's secure and
> it earns a return.  So start by simply giving money a weight
> (1/1000 pieces to the pound or something).  Eventually, players
> will choose to put their money in banks if for no other reason
> than to avoid encumbrance.  Also, let the players who act as banks
> offer competitive reates of return on their deposits.  Insure
> those deposits through the game system itself, but establish a way
> to create a negative consequence if the players who organize a
> bank default.  The players running the banks can then lend the
> money that they don't have to keep in reserve to other players or
> use it to finance "investments" such as quests that they can
> assign to other players or guilds.  Create an in-game system for
> banks to "audit" those quests and receive a portion of the
> proceeds.

> NOW you're talking about a fascinating in-game economy...

I've thought about the same thing... player-run banks.  IF there are
people playing who are sophisticated enough to manage the finances
(which I think there probably would be), there are still hordes of
abuse issues to be dealt with.  All it takes is for one corrupt
'Banker' to see that the amassed wealth of 200 players could be
eBay'd for thousands of RL dollars and decide it is worth the price
of ruining the character reputation and starting a new character and
BOOM!... no more player-run banking system.  It doesn't even
actually have to happen.  Rumors spread fast enough through the
player community such that a myth about the corrupt banker could
undermine the faith of the playerbase.  There are RL banking
regulations and regulators for a reason and I don't see that the
developer could integrate enough regulations into the game to
out-smart a player bright enough to build and develop and successful

With regards to crafting money, it's doable as long as the person
monitoring and coining the money supply is an "Alan Greenspan".
It's probably not appropriate for most combat-based MUDs but could
be a fun dynamic for a simulation with a dynamic economy and
player-driven empire building.

Currency is inherently worthless except for the value of the raw
materials used to mint it.  The only value it has is in the good and
services that can be purchased with it.  In the RW, the US produces
pharmaceuticals that get exported throughout the world.  However,
these US-based pharmaceutical companies want to be paid in US$ as
most of their vendors and laborers want to be paid in US$ (as well
as the government who wants their share).  So, a pharmaceutical
distributor in Japan has to buy US$ with Japanese yen on the open
market in order to pay for them.  This system works well as long as
the Japanese have some product to offer to the US market such as
electronics distributors in the US who want to buy DVD players and
TVs from Japanese manufacturers who want to be paid in yen.  From
there, it's just a matter of supply-demand.  If the supply of US$ is
high and the demand for US-produced goods is low compared to the
supply of Jap yen and demand for Japan-produced goods, you have a
weak dollar versus the yen... and visa versa.

In order for a multiple-currency system to work in MUDville, there
has to be a similar dynamic where each currency is required in order
to purchase goods from those producers/vendors operating in each
currency's environment/sphere of influence.  Else, you are forcing
each individual seller to be a wiz financier who is able to
efficiently gauge the value of every currency at any given
moment... and that is such a PITA that currency becomes a detriment
to trade rather than a facilitator.  (Not to mention the fact that
one PA/city-state could mint 10,000,000 Marconian Foozles and go
direct to vendors in other PAs/city-states and purchase their entire
inventory of goods before the other PA's realized that these
Marconian Foozles were virtually worthless.)

Personal opinion, the ability to mint money is such a core element
to the economy that making it a skill or technology is the wrong way
to go about it.  It's a privilege granted to an entity by those
people who are willing to operate in that currency's environment.
Both multiple currency and player-minted currency systems are
feasible... as long as there are sufficient systems to provide for
an efficient exchange rate and safeguard against abuse.



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