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Space Bro Science: So How Does ISK Work?

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#1 - 2017-03-21 05:28:35 UTC  |  Edited by: Morgan Wulver
After a fair amount of bickering back and forth in Discord our lore channel got fixated on the topic of how the conversion ration of ISK is so astronomically high compared to planetside currency. For those of you that don't know, 1 ISK has often been said to be enough money to feed a family of four from crib to cradle. This is why crew payments are so small their impact on capsuleer profits are negligible, and what causes me to feel ill when I think about how much my character alone has spent on designer boots. But how does this work? How, conceivably, can this be the case when capsuleers regularly deal with transactions involving several billion ISK?

One could argue that this simply comes down to income disparity, and to a certain extent I'm inclined to agree. Leave it to a dystopian world like New Eden to have the top 1% of the top 1% of the top 1% trade with budgets larger that the combined asset value of an entire planet. But I'm not so sure that's entirely the cause for such stupidly inflated numbers. To get a more realistic look at this, or at least provide a logical excuse for this phenomenon, I've tried to carefully consider a few extra factors that may well contribute to the real-world value of ISK. Be warned, I'm no economist so get ready for some serious bro science before I begin...

For any currency, that specific currency is expected to have some of real life market value tied to that specific note bill. Like, for example, how the US is based of the gold standard. Now, there are a metric **** ton of people in New Eden. Like, an inconceivable amount of humans living in the cluster. Across the entirety of the cluster, there's an inconceivable amount of transactions going on and an insane amount of currency flow on countless planets. And those notes, presumably, have a real life currency value.

Assuming ISK works the same way the market value from ISK has to come from something, right?

Well, yes and no.

Even if there is a huge amount of materials in the reserve that gives ISK it's value it is still ultimately finite compared to the hypothetically infinite amount of transactions that can happen in the entirety of New Eden. Keep in mind, financing a currency for a single planet would be a nightmare in itself without runaway inflation due to the relative scarcity of materials.Now consider the fact that ISK is one of the only currencies (with the exception of AURUM, which is soon to be removed from the market) that is traded universally between all the factions in New Eden, across the entirety of the cluster.

That makes the commodity that gives ISK its value (gold, glass beads, information, sentient space gas, whathaveyou) even more desirable because the simple fact that it can be traded anywhere makes it more valuable than the face value of the currency. Even then that commodity is, presumably, finite. The fact is that even if everyone in New Eden wanted to trade in their seperate currencies and valuable assets for ISK there may well not be enough of the standard commodity to provide enough ISK to convert that capital.

That's not even to mention the extensive administrative work that must be done behind the scenes to keep such a vital currency stable. If you need an idea about how difficult it must be to maintain a universal currency, Iook no further than the euro and the massive financial issues it faced since the late 2000s. Extrapolate that to an intergalactic scale and you have yourself the workings of an system perpetually on the brink of complete collapse, kept alive only by the tireless efforts of over-worked, poorly-paid accountants across thousands of planets. In fact, I would not be surprised if there was some sort of extensive CONCORD tax tacked on to the price of converting planetary capital to ISK just to finance the administrative costs of keeping it afloat. Hell, with that in mind CCP could easily make an in-universe case that the reason why no one really knows what the value of ISK is based on is done intentionally so that no one can disrupt the market value of that commodity and cause the complete economic collapse of New Eden.

So what we are left with is a currency that already has a high face value, that people will buy at a massive loss because it can be universally exchanged and accepted, is likely extensively taxed for the act of converting, is highly regulated by an international agency and everyone wants as much of it as they can because there is (even if that limit is extremely high) ultimately a limited amount in circulation.

None of this is to say that, at the end of the day, the face value of ISK isn't astronomically huge in its own right. But a system like the one I outlined would account for some of that massive difference in income disparity. It would also create a system where ISK, while extremely difficult and expensive to obtain initially, isn't coveted nearly as much as you think it'd be or stretch nearly as far among empyreans. Much like current cryptocurrency the system, while difficult to buy into, it ultimately isn't worth all that much so long as you are only exchanging the same currency with another party.

tl:dr: ISK are like tickets you get from a skeeball machine. Expensive and difficult to obtain, but ultimately not worth all that much when trading with the guy at the counter.

Kirjuun! Uakan! Teknikiara! Kanpai kameitsamuu! Ra ra ra!

#2 - 2017-03-21 05:30:48 UTC
As I understand it, the 1 ISK valuation is incredibly outdated, and due for proper retconning.

Cardinal Graelyn

Amarr Loyalist of the Year - YC113

Ivy League
#3 - 2017-03-21 06:43:26 UTC
Graelyn wrote:
As I understand it, the 1 ISK valuation is incredibly outdated, and due for proper retconning.


I always thought it had already been "retconned" in so much as it was no longer considered to be cannon. although I have not seen or heard any official replacements for that conversion rate yet.

personally i've always held the headcannon that 1 isk is roughly equivalent to 1 days minimum wage (say the equivilant of 100 dollars a day). I find that ratio works fairly well, in that it still shows the massive wealth disparity and explains why we wouldn't really notice the funds for paying our crew at any point, and lines up well for the cheapest of ships still being "reasonable"

take a shuttle for example. at ~15000 isk, that still puts it quite well out of the income bracket of your average janitor or farmer.
but cheep enough that say, a middle manager, or minor governer could probably afford one (even if it is a hefty investment)

as for the crew, I cant remember where I saw the list, but if I remember correctly, the crew breakdown for capsuleer ships worked out to be roughly. (I think thats aproximately right, possibly on the low end but likely not by much)
frigates 0-5
destroyers 0-10
cruisers 20-100
battlecruisers 100-200
battleships 200-1000
capitals 1000+

speaking from experience, even if my machariel had a crew of 1000+ and even if everyone on board was getting payed 2-3 isk per day... I wouldn't even notice the blip in my account. I regularly fire faction ammo that costs over 1k isk PER ROUND. a single volley of the guns costs more than paying the entire crew for the day does using my headcannon scale
#4 - 2017-03-22 17:03:48 UTC
This was rather extensively discussed here:
https://forums.eveonline.com/default.aspx?g=posts&t=508746&find=unread

I came to the conclusion that ISK is kind of like Bitcoin, except a lot more stable.
#5 - 2017-03-24 08:57:37 UTC
I seem to remember a figure somewhere that said that the average family makes about 10,000 isk over their working lives. Does anyone recall?
#6 - 2017-03-24 23:19:46 UTC
Yes, that is the more recent figure. Couldn't find the source though (might be, erm, Source actually?)

Cardinal Graelyn

Amarr Loyalist of the Year - YC113

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