Player Features and Ideas Discussion

The point is that having a fiat currency backed by a fiat currency is just nonsensical. It is basically saying, "we have currency A backed by currency B, neither of which are backed by anything of real value."

Further, the notion that something is a fiat currency does not mean it has no value. It means it is not backed by something that has real economic value.

For example, if you have 10 apples and the nominal price (i.e. the money price) is $1.25/apple, the nominal value of the 10 apples is $12.50. The real value is $12.5/$1.25 or 10....the quantity of apples.

So people keep insisting some thing like PLEX have value. Sure. Fine. But this attempt to connect it to a fiat currency to then call it a currency is just daft. Everything in game (that can be bought an sold) can be connected to a fiat currency via the PLEX market, but nobody thinks that a heavy neutron blaster is a type of currency. I can connect my ****ing car to a real life fiat currency. That does not make my car a currency.

As for trends, that is all well and good, but the question is why is there a trend? Yes, PLEX have been trending up. But saying they have value in game is about as useful as saying neutron blasters have value in game. Most items in game have some degree of value. For example, even a noob ship can have value (a cheap cyno ship). So, when somebody says, "PLEX have value," as an explanation for the price increase that should be meet with a big fat, "Okay, and....?" Here, let me give you a concrete example. The value of every character in game with an active training queue is going up. Because "the character has value"? No, that is helpful as saying "water is wet". The value of a character with an active skill queue is increasing...because...the ****ing skill queue is active.

Is there speculation in the PLEX market? Probably. This is probably what is going on. People who have lots of ISK or are going to be dialing back their play time want a hedge against possible inflation. What to do? Ah-ha, PLEX prices. Convert your ISK to PLEX. When you come back to the game you'll have pretty much the same amount of ISK or more. Further, that there is little inflation in game you might come back and find you have more ISK than you started with.

Could it be a bubble? Yes. However, bubbles in an asset market usually entail where the price of a good becomes unhinged or disconnected from its intrinsic value. Has that happened with PLEX? Hard to say. Bubbles are always easy to spot after the fact and most research indicates that bubbles are inherently unpredictable. One thing I'll note is that if there were a bubble something like the ban on multiplexing/broadcasting would be an event that could "prick the" bubble. Further, bubbles often pop when the central bank (in this case CCP) intervene. We know CCP has intervened and yet prices continued to rise after that. But maybe these events were sufficient.

So what else....the amount of ISK entering the economy. It is, by most accounts enormous. This is brand new ISK. Its potential for inflation should be equally large...but it is not when you look at a lot of in game items. Except for PLEX. Alot of that ISK, IMO, seems to be finding its way into the PLEX market. Thus, if it is the ISK entering the economy then the solution is to address the new ISK entering the economy.