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ISK / Intersteller Kredits what are they?

Author
Alexander wulfgard
Korrupted Gaming
#1 - 2013-05-04 14:58:27 UTC
Very little are written about ISK and only explanations you might find is that ISK are the currency used inside EVE.

But what are ISK really?
What do they represent?
Are they realistic, efficient or should they be replaced?

Credit, Dollars, Greens, dead presidents, bucks, big-ones, currency - We all love the sweet money

Lets start with a simple question: where do money come from?
EVE: Created out-of-nothing by CCP and given to players primarily through mission running as bounty prizes, rewards and time-rewards.

IRL (modern times): Created by central banks (5%) and Private banks (95%) out-of-nothing. Injected into the real economies via loans and to some extent public spending.

IRL (ancient times): Gold, Silver and even jade. Mined out of the earth and maybe minted into coins, getting its value from intrinsic precious metal value and government regulation and law.


What are ISK:
The legal tender in EVE representing no intrinsic value and only exist in Electronic form. Also its the only "money" available to players.

Are ISK realistic:
No, not at all.
As described earlier they are created by CCP and paid to players via missions.
4 major factions/empires using the same currency do not seem very likely especially since some of them are at war.
ISK also have some other fantastic features: 1 ISK hold the same value all over EVE, ISK can be instantly transferred to anyone, anywhere in EVE, ISK do not require to be held in a bank, ISK cannot be held in cash. Where ISK are actually held is still a mystery.

What are the alternative:
Money comes in many forms I will describe a few here but please feel free to comment and come with suggestions.

Paper money - Like the present ISK these will not represent any intrinsic value however they could be issued by the 4 factions and injected into the economy both via missions and loans, making it more realistic. However this would require the existence of an efficient banking system in EVE.

Precious Metals - Like ancient times gold would become the legal tender of EVE. However it do not seem very realistic either in a complex future space empire.

IOUs / bills of credit - money representing an intrinsic value which could be linked to for example Tritanium or other commodities. Hence the underlying have to exist in order to issue money.

Bitcoins - maybe the closet things which comes to ISK. A electronic currency only existing in a limited amount hence its value is only determined by supply and demand. This however means that agents will only be able to give out rewards depending on how much they receive in taxes.




Steven Hochheimer
Plasmatek Conglomerate
#2 - 2013-05-04 15:17:41 UTC
There's a reason there's taxes on everything, it's to keep the market at a certain rate, because otherwise people could just shift tritanium prices and everything simply skyrockets.

In a lot of ways it's generated out of thin air, but think about all the ship losses and money that will never be regained from those losses. Money is just received and spent on lots of things, and it does keep the market in check just right.
Caleb Ayrania
TarNec
Invisible Exchequer
#3 - 2013-05-04 15:20:31 UTC
Maybe you should familiarize yourself with EVE economy a bit more before posting on this topic..

Also decide whether your talking ingame lore or game mechanics.

Isk is most likely a future version of bitcoins.
The ingame gold would be close to PLEX and Aurum.

Also read a bit on Concord and SCC, to get the info on why there is neutral entities..

The factions are maybe more comparable to mega holding corporations. Wars are way more futuristic in nature, as is everything, so a future economy would not be as interested in conspicous wealth like gold buggery.. In perfect information artificial scarcity is harder to abuse, and also in an informed population of rather supre utalitarianism hype and bling artificial consumption is not as effective.

Just to mention a few things on the topic..

Rhivre
TarNec
Invisible Exchequer
#4 - 2013-05-04 15:55:20 UTC
There is an eve central bank, and they react if inflation occurs beyond a pre-determined value. They only intervene in the plex market at present, as the rest of eve is more just a simple barter system

Ebil central bankers
Alexander wulfgard
Korrupted Gaming
#5 - 2013-05-04 15:55:45 UTC
Caleb Ayrania wrote:
Maybe you should familiarize yourself with EVE economy a bit more before posting on this topic..

Also decide whether your talking ingame lore or game mechanics.

Isk is most likely a future version of bitcoins.
The ingame gold would be close to PLEX and Aurum.

Also read a bit on Concord and SCC, to get the info on why there is neutral entities..

The factions are maybe more comparable to mega holding corporations. Wars are way more futuristic in nature, as is everything, so a future economy would not be as interested in conspicous wealth like gold buggery.. In perfect information artificial scarcity is harder to abuse, and also in an informed population of rather supre utalitarianism hype and bling artificial consumption is not as effective.

Just to mention a few things on the topic..




I consider myself an expert in both in-game economy and real world economics which I studied extensively - however I could ask you the same?

I dont see plex as the ingame gold - just a way of creating an economic link between IRL and EVE.
This is not really very realistic if you look at EVE as a separate economy which needs to be self sufficient and realistic.

I like to hear your arguments on why ISK will be the future version of Bitcoins.

I dont think you have the right to speak on behalf of the NPC factions or corps whether they like to hoard gold/wealth or not. But my point still stand that no faction would use the same paper currency which can be created in unlimited amounts as their enemies.

The question still stand - Do you believe ISK is a realistic currency and if not would it be possible to replace?
Alexander wulfgard
Korrupted Gaming
#6 - 2013-05-04 16:03:44 UTC
Rhivre wrote:
There is an eve central bank, and they react if inflation occurs beyond a pre-determined value. They only intervene in the plex market at present, as the rest of eve is more just a simple barter system

Ebil central bankers



Yes this is ISK in and out... ISK money supply is properly growing around 10-15% per quarter in EVE.

The question asked is still if it is realistic to only have one electronic paper currency in EVE?
Caleb Ayrania
TarNec
Invisible Exchequer
#7 - 2013-05-04 16:34:10 UTC
Again your mixing ingame lore and game mechanics..

Since your an expert I as a layman will refrain from commenting any further on the topic.

Alexander wulfgard
Korrupted Gaming
#8 - 2013-05-04 16:55:06 UTC
Caleb Ayrania wrote:
Again your mixing ingame lore and game mechanics..

Since your an expert I as a layman will refrain from commenting any further on the topic.




That is properly best since you are not commenting on the topic.

However I hope more mature players who wish to discuss the monetary implications of the currency regime of EVE will post their comments and suggestions here.


Varius Xeral
Doomheim
#9 - 2013-05-04 17:15:19 UTC
As a mature and knowledgeable player, I have refrained from commenting because it just sounds like you're jerking yourself off without offering any compelling insight or challenge.

This is merely a response to state that my impression has been confirmed.

Official Representative of The Nullsec Zealot Cabal

Samroski
Middle-Earth
#10 - 2013-05-04 17:52:53 UTC
From the horse's mouth.

Any colour you like.

Alexander wulfgard
Korrupted Gaming
#11 - 2013-05-04 19:43:16 UTC
Varius Xeral wrote:
As a mature and knowledgeable player, I have refrained from commenting because it just sounds like you're jerking yourself off without offering any compelling insight or challenge.

This is merely a response to state that my impression has been confirmed.



I am happy to discuss the content and substance in my thread.
But I am not willing to discuss my person or play word games.

Alexander wulfgard
Korrupted Gaming
#12 - 2013-05-04 20:40:24 UTC  |  Edited by: Alexander wulfgard




Great article.

Lets recap some of the quotes from the good dr.

No governments have, in the long run, been able to withstand the temptation of printing more money. It’s a really, really difficult temptation to withstand.

is ISK in EVE any different from real world money?
Dr Eyjó: No. No, there is absolutely no difference. Except for the fact that we don’t allow that money to exit EVE.

So which is a better currency then? In-game ISK or ‘Icelandic króna’ ISK? (red: or US Dollars)
I told you earlier that the ISK in EVE, we close it off in our world because we want to keep the rules through EVE.
(unfortunately Dr Eyjo dident answer this question in full)

RPS: I want to see what currencies are the best. I have here a selection of currencies. [Gets up and lays out seven ‘currencies’ on the seat] This is a dollar. I’ve got an Icelandic króna. A one pound coin. I think this one is a Russian ruble. Then this is, uh, play-money.
RPS: So which is the best one?
Dr Eyjó: The one that you trust the most in. The one that you believe will be, one year from now, something that you can purchase goods with.
The Russian ruble. I would not trust the Russian ruble compared to the dollar and the pound, simply because it’s under restrictions as well and is fluctuating [dismisses the ruble]. I would trust this one! [picks up paper marked ‘Interstellar Kredit’]
RPS: The most!?
Dr Eyjó: Yes. Because this is the one I have control over and I know in a year’s time I can definitely buy a spaceship for it. In a year’s time the dollar might have reduced in value and in a year’s time the pound might have reduced in value.

So Dr. Eyjo chooses the ISK because he believes in it and think he can buy a spaceship for in 1 years time. He also chooses it over USD and GBP, but not over ISK (real) and RUB.
But he is contradicting himself as he do not like the ISK (real) and RUB due to the fact of currency restrictions. Restrictions which applies to game ISK aswell, just in an even more severe way. Also as he mention himself no government could withstand the temptation of printing in the long run but he believes CCP can withstand it.
Afterall as the Dr. points out money only have value because people believe in them.
So let me ask the readers this question, how many people belives in the US Dollar, GBP pound, ISK (real) or ISK (game)?
Billions of people believe in the US Dollar, you can use it to buy goods and services almost anywhere on the planet. Even outside of USA shop keepers might accept USD as payment.
British Pounds to lesser extent and ISK (real) almost no people would accept.
Finally how many people believe in ISK (game) and would accept them as payment? I dont think a lot, maybe only some of the 500k active players - hence I would choose ISK over the battery and play money , maybe even rubbles unless i have a trip planed to Russia. But I would never believe in them more than US Dollars or British Pounds.


But back to my original question which digs deeper than just the ISK.
Would only 1 currency exist in a future galaxy made up by 1000s of worlds and controlled by different factions which are at war?
And would this 1 currency be an electronic fiat money?
Zappity
New Eden Tank Testing Services
#13 - 2013-05-04 21:38:35 UTC
ISK isn't important. Just send it my way and I will take care of it.

Alexander wulfgard wrote:
Would only 1 currency exist in a future galaxy made up by 1000s of worlds and controlled by different factions which are at war?
And would this 1 currency be an electronic fiat money?


A common currency doesn't exclude regional/factional currencies for (e.g.) planetary use. But when you can jump across the entire galaxy in half an hour a common currency is practically inevitable I would think.

Zappity's Adventures for a taste of lowsec and nullsec.

Stigman Zuwadza
Deep Core Mining Inc.
Caldari State
#14 - 2013-05-04 23:32:40 UTC
Although we may not have different and separate currencies for each faction its almost definitely true that your 100m ISK will buy a different amount of stuff in almost every region.

It could be said we have different currencies its just that they're all called ISK, and although our ISK balance never changes as we move through Eve what you can buy with that ISK certainly does.

Also you have scenarios where lets say Trit in Jita is more expensive than Hek yet a PLEX in Hek is more expensive than Jita. Due to things like this your ISK is already worth more or less depending on the region in which you're in and the item you wish to buy / sell.

I think the introduction of alternative currencies between factions would only cause confusion amongst the math challenged folks and allow those that have a handle on things like currency exchange to adversely take advantage of it further.

Its a nice idea and all but I think the practicalities of it are probably more of a headache for CCP that the benefits especially when those benefits already exist in terms of your 100m ISK being worth different amounts in different places.

/waffle off

Fly safe. o7

It's broken and it's been broken for a long time and it'll be broken for some time to come.

Alexander wulfgard
Korrupted Gaming
#15 - 2013-05-05 17:50:19 UTC  |  Edited by: Alexander wulfgard
Zappity wrote:
ISK isn't important. Just send it my way and I will take care of it.

Alexander wulfgard wrote:
Would only 1 currency exist in a future galaxy made up by 1000s of worlds and controlled by different factions which are at war?
And would this 1 currency be an electronic fiat money?


A common currency doesn't exclude regional/factional currencies for (e.g.) planetary use. But when you can jump across the entire galaxy in half an hour a common currency is practically inevitable I would think.




Surely a powerfull argument many European politicians used when they had to persuade their respective populations in Europe to change their national currency with the Euro.
It was said it was easy to use the same currency in all countries and that people now did not face conversion costs.

However as many economists warned back then and were right about was that you cannot have monetary union without a fiscal union aswell.
Same would apply to EVE where sworn enemies properly would not share balance sheet with each other.

As we saw last month, 1 Euro do not bear the same value in all the European countries. And I am not taking about what they buy. Last month when Cyprus created capital restrictions on funds held on accounts inside Cyprus, a Euro in Cyprus now has far less value than for example a Euro in Frankfurt, Germany.
Alexander wulfgard
Korrupted Gaming
#16 - 2013-05-05 18:02:48 UTC  |  Edited by: Alexander wulfgard
Stigman Zuwadza wrote:
Although we may not have different and separate currencies for each faction its almost definitely true that your 100m ISK will buy a different amount of stuff in almost every region.

It could be said we have different currencies its just that they're all called ISK, and although our ISK balance never changes as we move through Eve what you can buy with that ISK certainly does.

Also you have scenarios where lets say Trit in Jita is more expensive than Hek yet a PLEX in Hek is more expensive than Jita. Due to things like this your ISK is already worth more or less depending on the region in which you're in and the item you wish to buy / sell.

I think the introduction of alternative currencies between factions would only cause confusion amongst the math challenged folks and allow those that have a handle on things like currency exchange to adversely take advantage of it further.

Its a nice idea and all but I think the practicalities of it are probably more of a headache for CCP that the benefits especially when those benefits already exist in terms of your 100m ISK being worth different amounts in different places.

/waffle off

Fly safe. o7



I agree with what you say.

The technical aspect is properly the strongest argument for not creating mulitple faction Currencies.
However this also lead to my argument that the ISK currency have severe weaknesses.

Firstly as described earlier it is very unlikely that a monetary union and/or fiscal union exists between enemy factions.
Lastly, have anyone ever wondered where they hold their ISK?
Its clearly not held in cash as you dont loose your isk when you get pod killed.
I dont think you have a debit card / or equivalent either since you dont have a banking relationship with an EVE NPC Bank.
Could it be a Bitcoin type of currency? possibly, but as proved CCP prints this currency and its injected into the economy via bounty prizes and mission rewards.
So the real question still stands, what is the EVE ISK?
Alex Grison
Grison Universal
#17 - 2013-05-06 04:57:29 UTC
Alexander wulfgard wrote:
Very little are written about ISK and only explanations you might find is that ISK are the currency used inside EVE.

But what are ISK really?
What do they represent?
Are they realistic, efficient or should they be replaced?

Credit, Dollars, Greens, dead presidents, bucks, big-ones, currency - We all love the sweet money

Lets start with a simple question: where do money come from?
EVE: Created out-of-nothing by CCP and given to players primarily through mission running as bounty prizes, rewards and time-rewards.

IRL (modern times): Created by central banks (5%) and Private banks (95%) out-of-nothing. Injected into the real economies via loans and to some extent public spending.

IRL (ancient times): Gold, Silver and even jade. Mined out of the earth and maybe minted into coins, getting its value from intrinsic precious metal value and government regulation and law.


What are ISK:
The legal tender in EVE representing no intrinsic value and only exist in Electronic form. Also its the only "money" available to players.

Are ISK realistic:
No, not at all.
As described earlier they are created by CCP and paid to players via missions.
4 major factions/empires using the same currency do not seem very likely especially since some of them are at war.
ISK also have some other fantastic features: 1 ISK hold the same value all over EVE, ISK can be instantly transferred to anyone, anywhere in EVE, ISK do not require to be held in a bank, ISK cannot be held in cash. Where ISK are actually held is still a mystery.

What are the alternative:
Money comes in many forms I will describe a few here but please feel free to comment and come with suggestions.

Paper money - Like the present ISK these will not represent any intrinsic value however they could be issued by the 4 factions and injected into the economy both via missions and loans, making it more realistic. However this would require the existence of an efficient banking system in EVE.

Precious Metals - Like ancient times gold would become the legal tender of EVE. However it do not seem very realistic either in a complex future space empire.

IOUs / bills of credit - money representing an intrinsic value which could be linked to for example Tritanium or other commodities. Hence the underlying have to exist in order to issue money.

Bitcoins - maybe the closet things which comes to ISK. A electronic currency only existing in a limited amount hence its value is only determined by supply and demand. This however means that agents will only be able to give out rewards depending on how much they receive in taxes.






monies

yes

Carniflex
StarHunt
Mordus Angels
#18 - 2013-05-06 12:08:46 UTC
ISK in EVE is a monetary unit used in interstellar trade. According to the backstory all the empires have their own currencies its just that interstellar trade is done through the ISK.

The small pile of ISK you start with is supposed to be your family heritage.

There have been in the past attempts in the forums to put some conversion ratio in place between current real money and the ISK from the lore perspective, but these attempts have failed in the past as you can find very large deviations. Starting with heavy metals like platinum, for example, which just cost peanuts per cubic meter and put it next to, for example, amarr wheat, slaver hounds or a frigate class vessel.

Here, sanity... niiiice sanity, come to daddy... okay, that's a good sanity... THWONK! GOT the bastard.

Juwi Kotch
KOTCH Construction and Anchoring
#19 - 2013-05-06 12:42:53 UTC  |  Edited by: Juwi Kotch
Alexander wulfgard wrote:
But back to my original question which digs deeper than just the ISK.
Would only 1 currency exist in a future galaxy made up by 1000s of worlds and controlled by different factions which are at war?
And would this 1 currency be an electronic fiat money?

Fiat Money works only as long as there ist trust in it. In an universe where there are arch enemies fighting each others for centuries and millenia there will be no trust in any money issed by the "wrong" faction. Each faction will have its own money, which gains its value because of its inert trust by its own people and organizations.

However, Fiat Money is bound to collapse earlier or later. The principle of economic growth to reflect the need of additional value against money because money supply must increase as a result of interest is not possible to sustain in a finite word or universe. Its only a question of time when that system collapses (in our universe on our planet most likely by the end of this century).

As a result, people will - earlier or later - loose trust in any Fiat Money system and will be looking for something which bears some kind of backing in real world physics. In any given universe with a common physical ruleset and erratic distribution of resources there is only one common denominator which could serve as such: Time. Every service, every good produced has directly or indirectly time invested in it, and that can be counted. A spaceship will be pricetagged with the combined time invested in it from mining the resources over hauling and storing it to the time invested in designing the ship and of course manufacturing it.

Since this can be regarded as common sense, it might be possible, that a time based currency and valuation system could be acknowledged and accepted accross a universe with different factions.

"Our lives are not our own. We are bound to others, past and present. And by each crime, and every kindness, we birth our future." Sonmi-451

Wintermute XIII
Pandemic Horde Inc.
Pandemic Horde
#20 - 2013-05-06 13:16:29 UTC
Money is a form of communication - Post Modernism 101
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