I can't help it. I want to focus my guild on running services for:
1) Fractional Reserve Banking, insured interest bearing accounts with representatives in every major settlement.
2) Loans to settlements and/or credit worthy guilds.
3) Insurance service on properties with reasonable rates.
Sounds exciting, right? It kinda does to me, although much of the viability of any of those business models will depend on the design of the playable game... I bet there is room for at least some of it.
The gnome barbarian nods thoughtfully. "This sounds like an excellent idea. I suggest you place it over here, far away from the marshals."
In seriousness, if the game supports this, it'd be a neat little option. Or maybe guilds could have the ability to give loans and the like to their members.
| 2 people marked this as a favorite. |
I plan on hoarding all of my gold into some sort of labyrinthian crypt with monsters to protect it.
Goblinworks Executive Founder
|
Fractional reserve banking is only possible with fiat currency or when your debtors accept payment in bank drafts.
Full-reserve banking is possible on a precious metal standard, but make sure your depositors know under what circumstances their deposits will be available for withdrawal.
Or you could simply lend your own money- that way defaults can't make you bankrupt.
Or you could just base value on how much you have saved in the bank? <gasp> I know, shocking, basing something on that actual thing being in existence instead of some ethereal based non object.
The problem with allowing someone to build a banking structure similar to what we have now is that we'd end up with the same problems. A gold coin would no longer be worth a gold coin, but whatever a series of odd math calculations determined it to be, and the people who are in charge of those calculations would be the only people with power. They could collapse the economy at whim simply to destroy rivals. There are just too many real world parallels against this to want it to happen.
And, most of the insurance companies are in the business of NOT paying money out. It's easy to give money to them, but get it back, even for legitimate claims, is an arm twisting exercise that usually requires lawyers, and in the end, you end up worse off for fighting, even if you are in the right. Only people who end up winning are those same lawyers. And the insurance companies who avoid litigation because it's so expensive.
Seriously, we have laws and they still can't stop wholesale corruption in the banking industry. What kind of 'laws' would the game have to prevent banking corruption? I say avoid the whole thing entirely, and save your sanity.
|
Goblinworks Executive Founder
|
Or you could just base value on how much you have saved in the bank? <gasp> I know, shocking, basing something on that actual thing being in existence instead of some ethereal based non object.
The problem with allowing someone to build a banking structure similar to what we have now is that we'd end up with the same problems. A gold coin would no longer be worth a gold coin, but whatever a series of odd math calculations determined it to be, and the people who are in charge of those calculations would be the only people with power. They could collapse the economy at whim simply to destroy rivals. There are just too many real world parallels against this to want it to happen.
And, most of the insurance companies are in the business of NOT paying money out. It's easy to give money to them, but get it back, even for legitimate claims, is an arm twisting exercise that usually requires lawyers, and in the end, you end up worse off for fighting, even if you are in the right. Only people who end up winning are those same lawyers. And the insurance companies who avoid litigation because it's so expensive.
Seriously, we have laws and they still can't stop wholesale corruption in the banking industry. What kind of 'laws' would the game have to prevent banking corruption? I say avoid the whole thing entirely, and save your sanity.
Well, there's the law of conservation of mass, which says that the player-run bank doesn't create gold, but only transfers it from person to person. Presumably, many of the uses of gold in-game WILL destroy it (in the sense that it needs to disappear from what players have in circulation).
Then there's the fact that the bank will only have as much money as it can convince players is worthwhile to give to it. Somehow in Eve several people got absurdly rich by this method.
Fractional Reserve could work if the reserve ratio was set high (80%+) because you could facilitate bank/money transfers through in-game paper.
Since gold is a tangible that is easily stolen it would be a much "safer" way to move money around.
Eg. Bob the Paladin writes a check to Mike the Mage for 1000 gold pieces. Mike takes check to local branch and deposits it. On the back-end 1000 gold moved from Bob's account to Mike's. The transfer requests are validated through in game /tells by the bank representative if they are unusual transactions, or auto-approved if Bob is paying Mike on a regular basis and nothing is unusual. If Mike was robbed before his check was deposited the robber got nothing because the transfer will not be validated.
Keep in mind this is all only if "gold" is as I'm presuming a physically tangible thing. It being a tangible thing also alleviates much of the risks associated with using such a service in EvE online. It wouldn't take 2 keystrokes for the bank owners to run off with all the gold. It would take a wagon train and a bunch of cloak and dagger stuff.
It also creates a huge opportunity for security service related characters and or "heist of the century" type of stuff, but all that is fun, yeah?
It's also possible of course to offer multiple services. Fee based Full Reserve Banking and multiple interest bearing account types based on Fractional Reserve Ratio.
@Marou_, that's an interesting point.
If large quantities of gold really do require coordinated logistics to transport, then that does open up some really interesting dynamics.
Yeah, after all; most of the exciting stories about the wild west surround banking and assets moving from place to place. I'm thinking in any such endeavor in a sandbox having a large stop-loss account would be a necessity.
Even if gold ends up a non-tangible asset or NPC's handle banking I think there is room for insurance, bond underwriting, and angel investing; given how prone to destruction player created content would be, and the capital required to erect and maintain such content.
Getting in at the ground level of a player run and created economy is exciting stuff. The first 12-50k players will have a huge impact on how things function for everyone else on account of momentum and acceptance.
I seem to remember a post from Ryan Dancey saying that gold will not be tangible, though.
If gold is non-tangible and there are NPC bankers that are in every NPC settlement and PC settlement that cannot be robbed and can hold infinite sums of money; there is still room for investment type services, bonding, insurance, courier services, etc.
In a player run economy where players build and destroy parts of the world there is always room for making money with your brain instead of with a sword or spells.
Sure, I'll play the game in a normal way too; but focusing on providing needful services while turning a profit appeals to me, and would give me purpose in a "make your own purpose" sandbox environment.
|
Goblinworks Executive Founder
|
Fractional Reserve could work if the reserve ratio was set high (80%+) because you could facilitate bank/money transfers through in-game paper.
Since gold is a tangible that is easily stolen it would be a much "safer" way to move money around.
Eg. Bob the Paladin writes a check to Mike the Mage for 1000 gold pieces. Mike takes check to local branch and deposits it. On the back-end 1000 gold moved from Bob's account to Mike's. The transfer requests are validated through in game /tells by the bank representative if they are unusual transactions, or auto-approved if Bob is paying Mike on a regular basis and nothing is unusual. If Mike was robbed before his check was deposited the robber got nothing because the transfer will not be validated.
Keep in mind this is all only if "gold" is as I'm presuming a physically tangible thing. It being a tangible thing also alleviates much of the risks associated with using such a service in EvE online. It wouldn't take 2 keystrokes for the bank owners to run off with all the gold. It would take a wagon train and a bunch of cloak and dagger stuff.
It also creates a huge opportunity for security service related characters and or "heist of the century" type of stuff, but all that is fun, yeah?
It's also possible of course to offer multiple services. Fee based Full Reserve Banking and multiple interest bearing account types based on Fractional Reserve Ratio.
Checks are possible with a 100% reserve requirement. One depositor issues a check which allows another person to withdraw gold against the check issuer's account.
80% Fractional reserve banking would allow a bank to have 8000 gp in deposits, but loan out 10,000 gp to qualified lenders. That precious metal has to come from somewhere, unless bank credit it valuable enough to float the difference. With fiat currency, bank credit IS valuable enough. With precious metal currency, a run on the bank can bankrupt the bank and leave the depositors broke as well.
Fractional Reserve could work if the reserve ratio was set high (80%+) because you could facilitate bank/money transfers through in-game paper.
Since gold is a tangible that is easily stolen it would be a much "safer" way to move money around.
Eg. Bob the Paladin writes a check to Mike the Mage for 1000 gold pieces. Mike takes check to local branch and deposits it. On the back-end 1000 gold moved from Bob's account to Mike's. The transfer requests are validated through in game /tells by the bank representative if they are unusual transactions, or auto-approved if Bob is paying Mike on a regular basis and nothing is unusual. If Mike was robbed before his check was deposited the robber got nothing because the transfer will not be validated.
Keep in mind this is all only if "gold" is as I'm presuming a physically tangible thing. It being a tangible thing also alleviates much of the risks associated with using such a service in EvE online. It wouldn't take 2 keystrokes for the bank owners to run off with all the gold. It would take a wagon train and a bunch of cloak and dagger stuff.
It also creates a huge opportunity for security service related characters and or "heist of the century" type of stuff, but all that is fun, yeah?
It's also possible of course to offer multiple services. Fee based Full Reserve Banking and multiple interest bearing account types based on Fractional Reserve Ratio.
Checks are possible with a 100% reserve requirement. One depositor issues a check which allows another person to withdraw gold against the check issuer's account.
80% Fractional reserve banking would allow a bank to have 8000 gp in deposits, but loan out 10,000 gp to qualified lenders. That precious metal has to come from somewhere, unless bank credit it valuable enough to float the difference. With fiat currency, bank credit IS valuable enough. With precious metal currency, a run on the bank can bankrupt the bank and leave the depositors broke as well.
This is true, the bank could get a "run" with Fractional Reserve. Which is why I think Fractional Reserve account types would need to bear interest. If the bank is profiting by making loans on 20% of your deposit, a portion of the risk and reward should go back to the depositor. Knowing you were bearing X% interest, paying no fees, and in a worst case scenario (bankruptcy) could recover 80% of your assets would appeal to more people than the also offered "Full Reserve" accounts that had fees and did not pay interest.
Thing is, if checks are widely accepted for large gold transactions there would be no "run", which is why many of the banks in the real world have crazy low reserves.
Being public enemy #1 in a game with horses and foot travel would be unbearable, so all risks and benefits should be disclosed up front to minimize this possibility.
Reserve ratio would have to be carefully determined and adjusted by number of accounts and total assets. If you have 100 players that on average have 2000 gold deposited and rarely take withdrawals an 80% reserve ratio is perfectly acceptable.
Rather than the insane ratios we see in our real "lawful" world I'm thinking if the bank had 10000 deposited in Fractional Reserve accounts it could loan out no more than 2000. I have no interest in creating the widespread criminality and ursury present in the real world. I believe there is plenty of opportunity, money, and prestige to be made without doing all that.
An 80% reserve to me means the bank must keep 80% of liquid assets on deposit available at all times. That still leaves plenty of room for loans and the sale of more risky assets.
I nothing else, I like the idea insofar as it establishes a bank which can be robbed!
Dibs on being Mr. Pink.
Exactly, more compelling content. I think many games automate and simplify away things like logistics and money. It creates situations where RMT flourishes and sending more supplies to outpost X is as simple as visiting the mailbox.
It seems like distance is actually going to matter in PFO based on the dev blog posts. If distance matters moving material (weapons, building supplies, etc) half across the world should be a risky endeavor with caravan guards and numerous PC's involved.
With distance not mattering (mailboxes) and gold being something anyone can perfectly protect by visiting an NPC, many exciting dynamics and opportunities for high levels of player engagement are lost.
This is a perfect example of less being more. Less automated tools with an emphasis on player control = much more player engagement than automating those systems.
----------------------
Lets say there was a Pathfinder Bank that was player run, and it's primary heavily guarded reserve location was raided by a DM controlled dragon resulting in a loss of assets equaling 40% which were of course transported to the Dragon's Lair.
How engaged would the bank and depositors be in recovering the lost assets? How engaged would treasure hunters be in getting there first?
How large of a bounty could the bank offer adventurers to rescue the assets from it's stop-loss account?
Goblin Squad Member
|
@Marou_, sounds like you'll be happy!
Of course, some people will want to do things like create banks and insurance companies, offer loans with interest, and even sell stock in companies and settlements. All of those things and more are great additions to the game, and we're thinking about ways they can be implemented safely and without causing problems with griefing and fraud.
|
Goblin Squad Member
|
Player controlled fractional reserves in an MMO seems like a bad idea to me, since constrains the developers' control over currency in the marketplace, which is one of their tools for controlling the flow of the game. Without it, they can control a number of variables to an extent, by increasing or reducing the flow of cash in various areas.
We've already seen this in the real world, where how a region develops is controlled by those who lend the money. Why take that out of the developers' hands?
(edit: Arise!)
