A Currency Crisis in Video games? NFT's and blockchain are a solution if weighed properly.
https://www.ign.com/articles/new-world-currency-crisis-deflation
"New World Is Stuck In a Currency Crisis"
- Jared Moore
I haven't picked up this game nor would I after hearing about the broken economy that is going on in-game. We all know that tokenomics have issues themselves, but we also know that instituting blockchain as a currency within any game can solve a number of issues. I saw the headlines on IGN and thought it would be an interesting LEO and even a 1UP post.
"New World is currently being affected by a deflationary currency crisis so bad that on some servers, players have started bartering raw materials with one another instead of spending their increasingly valuable coins.
As per an article by Player Auctions, Amazon's latest MMORPG is currently facing a troubling time with deflation. Unlike other MMOs, which often have to combat inflation caused by players generating more money through grinding out quests and amassing small fortunes, New World is facing quite the opposite problem.
According to the article, the game's primary methods for distributing New World's currency to players across the land - through monster drops, salvage, and completing quests - aren't offering enough coins to keep up with the rate that they're exiting circulation as players spend their hard-earned coins. As circulation in the game decreases, this has resulted in prices on in-game items such as crafting materials falling "not necessarily because there isn’t enough coin to afford them, but because the value of the currency is so much higher than the value of goods."
I know sound money is important and this is why BTC is great because it can be broken down into smaller easily transferable units. The question is how valuable is a 'coin' if it is too valuable to exchange.
I have written before how I view micro-transactions in-game. I have given my kids a hard time about buying in-game 'skins' for their characters on Fortnite simply for the fact that it's pissing away money. If you are going to pay for an asset, you should be able to own it. Owning means you should be able to sell it or transfer it. Of course NFT's (non Fungible token) solve this dilemma and therefore will be the future of ALL multiplayer video games.
Deflation is a world wide issue we are all facing right now. I know inflation is all in the headlines, but it's really because of a number of factors. The truth of the matter is that technology, baby-boomers retiring, and lack of 'workers' has created a crisis within all modern societies today. Top that off with Government's willingly shutting down the economy as if it had an on-off button.
No problem right? In the infinite wisdom of bureaucrats you can simply create new units of debt to pay past debts. So shutting down an economy is no problem. Well of course it's hard to find a politician that truly understands the value of real money. Now we have currency chasing a lower amount of goods, where that currency isn't even reaching the average household. Of course the cartels have supplied institutions and banks with tons.
In the video game the currency is worth more, so people are hoarding it. I guess this can outline an issue with a gold-backed system (Austrian), but also shows the value of currency itself. In real world, the system itself is Keynesian mixed with corporatism and fascism.
Like in the game this poses "a number of problems to players in-game, the falling price of raw materials alone could affect the way that fans play the game in the future. As prices lower, this could potentially disincentive players from leveling up certain skills in order to generate income."
Isn't that just like real life?
"For example, if the price of raw materials fell sharply enough, then players may be less likely to sink time into mining them as the return for ore being sold would become so negligible that it wouldn't be worth their time."
True economies need to balance out. If there is less Ore, then it stands to reason it's price should increase. This can certainly play out in real life, but it would seem in-game economies are playing out in the real world just in a different way. In actuality it would seem world leaders are playing the world economy like a video game.
Blockchain game creators need to take note of this.
I'm not sure if the shipping container Crisis is similar with the bare-shelves we have today, but what is happenening is a feed-back loop where the producers have less income coming in simply because of the bottleneck. They then have less dollars to buy raw-materials and eventually less and less get's produced.
"In ‘Deep Ship’? Biden Weighs National Guard To Address Record Number Of Vessels Off Los Angeles"
"In some servers, Player Auctions reports that the value of the currency is now so high that players have regressed back to a barter economy where resources are being traded instead of coins." This in actuality leaves the economy broken.
I have always said 'assets' are the most important thing to acquire. Even though 'dollars' are printed on a screen there are not many actually circulating in the general economy. The actions on the the small screen represents a gold back currency. Here we have a debt based currency with a mix of inflation and deflation.
Although the game does not represent what is happening here, it certainly shows issues in artificially manipulated environments. Lack of products on shelves are showing higher prices. This represents a weakened dollar, even though the big intuitions have been given more of it. In the video game the 'gold' is being hoarded.
Our assets today are limited and are more valuable then what the currency represents. Blockchain can certainly solve many of these problems this world is facing, unfortunately the gang in charge of the world economy only want to cement their position into any change that may occur. We can guarantee central bank digital currencies will have provisions to print moar just like tether. Simply put we need currencies that represent the true value of goods being produced and offered on the shelves. Could digital currencies be hoarded in the same way because their value far outweighs the products to purchase with? This needs to be contemplated before blockchain gaming starts producing their own token.
If you made it through this post congratulations! Micro and Macro economics are very difficult to navigate if you haven't delved deep enough.
Posted Using LeoFinance Beta