I don't particularly care, I think you might've noticed, but in the proceedings there was an observation by dpb which very much deserves discussion. He said :
Historically it’s always been the case that whatever Mircea offers as far as trades go has been a +ev deal for all involved, but that can’t last forever I suspect.
So, admitting for a moment that such a thing ever existedii, we readily agree that it can't possibly last for a purely thermodynamic reason - it is, as alf puts it, "an exponential/runaway growth hallucinatory nonsense".
So it's a miracle, if it did occur, nothing short of a wonder. How did it happen ?
My original answer, directed towards the comment section there before it kept growing and growing to its respectable size you admire here, started with "This very much depends on what you mean by". Because it does.
So - the source of +EV for everyone was notional valuation. What is, in your estimation, the value of a virtual item in a computer game called "1k bv numina", with no further discussion or specification ? Zero, right ? Right.
However what if it were further specified that "1k bv numina" refers to a virtual item in a computer game that specifically guarantees each item will be bought back at no less than 1`000 satoshi ? I suppose some evaluation of the guarantees (and the guarantors) will be required, but we can also agree it is no longer 0. That in my case it is experimentally pretty much exactly 1`000, that in Paul Graham's case it would be pretty much epsilon matters not - it's not zero anymore, is it ?
Now consider the rationale given by me as a basis to price the things in actual gaming practice : Memoranda and shit, like 1800s high diplomacy! It was, more or less, accepted, and by this act of further specification - because you're not simply trading "a virtual item in a computer game called 1k bv numina and guaranteed to sell for 1`000 satoshi" but rather "a virtual item in a computer game called 1k bv numina that's guaranteed to sell for 1`000 satoshi and can only be produced through overcrafting in so and so conditions and is required to feed the crafting process of so and so in so and so volume".
This gain of meaning, this increase in specificity supports a different valuation. Before the arguments became cogent, the items in question sold for a pittance or didn't sell at all. Once the arguments were brought, and weighed, the market unlocked, and we've traded tens of millions of ECu's worthiii.
This is the whole story : the base value of items in game went from 949 mn ECu on December 19th, 2015 to 7.171 bn last night. That is, yes, a 655% increase in the total guaranteed value of virtual items in a virtual game.iv
That increase aside, the notional value of items exploded. To give a brief rundown of what that means :
- There's a grand total of 245`991`707 ECu worth of blueprints. These regularly sell for 1`000% on the market, meaning that the above value has to be sweetened, by no less than 2.21 billion ECu worth of notional value.v
- There's a total of 121`921`452 ECu worth of basic harvestables. These sell for 150% and thus add another 60 or so million notional ECu to the global Eulora economy.
- There's no less than 109`659`695 ECu worth of various tools, from simple mining and farming implements (usually fetching about 200%) to elaborate craft tables and whatnot - some of whichvi can't be had at any price. What's a fair evaluation here, no less than 100 million, and no more than how much ? Half a billion ? Half that ? Twice that ?vii
- Two batches of 20 Inconsequential Sacrifice Tokens sold at auction in the past week, each batch going for 13mn ECu. Their base value is... 10 ECu. That's 6`500`000%. What now ?
The examples given, picked from a sea of examples available, would support an extra... hm. How much ? Say roundly 3 bn ECu and leave it at that. Two fifths of the total 7.171 bn ECu value we were discussing aboveviii.
Now consider : the 7.17 bn exist because MP said Minigame said the base value will be respected ; but the 3bn exist because the players evaluated the mechanics of their production and consumption - in a word, the economic situation - and came to this conclusion.
Eulora contained 949 mn ECu worth of goods in December 2015. It went up to 7.17 bn in December 2016. The notional valuation however was a mere 150 to 200 mn last year, whereas this year it adds in excess of 3 bn. Which is to say : the base value of items increased 655% in a year, ie faster than any developing economy known to man, but the notional value of items increased at least 2`000%, or roughly three times faster.
So then - how is it possible to have +ev deals for everyone ? Simple! For as long as the notional value grows faster than the base value, all is peace and harmony! Exactly in the same manner "modern democracy" ensures peace and prosperity. Once the mood sours, once expectations of jam tomorrow give way to a desire for bread today - expect ugliness, hostility and warfare. Not so much in Eulora yet, owing still to the fact that the world is young and the space plentiful not to mention to the convenient happenstance that fighting hasn't actually been implemented yet (but will be!) -- but expect ugliness, hostility and warfare nevertheless.
More generally, leaving local strife aside, for as long as there's a corpse to eat -- be it China's empire at the time a tiny irrelevant island was posturing on the world's stage as if somehow - against all odds, and against all evidence - it mattered ; be it England's empire at a time square jawed farmhands led by a mischevious, insolent cripple-cum-televanghelist honestly thought the World Series happens in fucking Idaho (World famous potatoes!) ; be it the never-to-be-great-again -- for as long as there's a corpse to eat, someone somewhere will be announcing shocking GDP growth and an "unprecendented" age of peace and prosperity (for its subjects strictly, of course).
The logical observation in lieu of conclusion would be that if you're going to play virtual economies, you're probably best advised to do so in the relatively safe environments of Eulora rather than in the suicidal environment of MF Global & friends.ix
Or, conversely put : the present world -- this great achievement of a few centuries worth of progressive gargle -- can't possibly be all that great or worth all that much of anyone's time. If a precious few people can reconstruct the entire thing within a short few years inside a tiny shard of doped silicon then what was it to begin with ? The value of reality comes precisely from its inadherence to emulation ; once emulated it is of no further interest. A solved problem, as they say.
What comes next ?———
- I don't think you fully appreciate the breath of it. Go re-read the null sets discussion and think about it : if MP's rule that WoTs must not be normalized (ie, there can't be a "common rule") is respected, then the scoring criteria employed by nodes will diverge. Therefore, for any locus of action L which allows a choice be made between individual actions a1...an, each being evaluated by nodes N1...Ni as values V1...Vi there will not be any algorithm allowing the chooser to select such an a so that all V > e for an arbitrary e (such as for instance e=0). No matter what you do - there will be trouble. What this means is that acting towards purpose rather than from cause is shown in practice to be just as untenable as it is in theory ; and that if there exists a large entity with high esteem in front of all the nodes there will be peace, but otherwise - war. This then is the mathematical, as opposed to conventional, definition of monarchy - not an institution that emerges from "tradition" or "divine right" or any such nonsense, but a necessary construct of any correctly set out theory of reality.
And if MP's rule isn't respected, the WoT collapses under sybil load (which is just another statement of "modern democracy" with all its ballot stuffing, faux representation, concern trolling and astroturfing goodness). [↩]
- For what it's worth as an anecdote, I believe that he is correct in his evaluation of Eulora's coupla years history to date, yes.
This however doesn't mean the players didn't manage to engineer massive -EV activities for themselves. For instance there was once a case when a bundle of items was offered for auction, and a player tried to buy the bulk and sell the parts for a profit - which turned into a catastrophic loss. How this can possibly work is anyone's guess - and if you have a theory the comment box below is all yours - but that's how it worked nevertheless. [↩]
- One Eulora copper's equal to one satoshi, so you know, 0.x whatever BTC worth. [↩]
- Technically you could say this is all GDP - making Eulora by far the world's fastest growing economy. The objection could be brought that most of this is financed by foreign capital inflow (in the form of Bitcoin deposts), yes, but then again - exactly the same is the case for any other developing country ; and moreover the tax office of any fiat country would attempt to tax all of the 7`171−949 = 6`222 value added throughout FY2016. [↩]
- Will this notional value ever be realised ? Who knows. Will the notional value of currently marked-to-market derivative products, such as soy futures or eur/rub PUTs ever be realised ? Some of it will ; some of it won't. That's how business goes.
Was this notional value ever realised ? Oh brother, has it. Some of the blueprints still stuck in my storage were bought back when people were happy to throw them away for 115%. [↩]
- The scarcity and then absence of WOS aka Worn Old Screens has been a cause of alarm in Eulora for months now. [↩]
- A recent auction was announced to patch the weakness of the player economy specifically in the tool area (and Pete Dushenski has graciously agreed to hold the gavel). Its base value comes to 3 * 9`999 * 935 * 1.5 + 5`000 * 2`039 * 2 + 2`000 * 6`306 * 2.3 + 1`000 * 9`374 * 2.5 + 200 * (39`654 + 40`510) * 3 + 10 * ??? * 500 + 2 * ??? * 600. As you can see, it can't even be evaluated, seeing how nobody knows exactly what the base value of the last two items is, owing to the last not yet being seen by any player and the first's characteristics not having been made public by its (only) holder.
The part that can be evaluated comes to 163`001`792.5 ECu - so go ahead and try your hand, how much will this auction collect ? You can review the October 2015 discussion of monetary flows and their economic relevancy, if you wish, but you don't have to. Form a theory - any theory you wish - and make a prediction. How much will the auction gather ? What % over the base value will this 163mn Ecu (ie, 1.63 BTC) pile of tool blueprints sell for ? Will it be 200% ? 500% Less ? More ? Half, double, what ? What'll it be ? [↩]
- In fairness, their basis is also a mere 245`991`707 + 121`921`452 + 109`659`695 + 200 = 477`573`054 ECu - if you scale that up to 7.17 bn you end up with a notional in the 40 to 50bn range which is clearly exaggerated. You know, just like the uncountable trillions of notional derivatives valuation on which the whole "civilised" world currently rests. What now ? [↩]
- Because yes, those notional valuations come from somewhere - for every Bitcoin worth of Pointed Stick Eulora sells there's thousands of fewer dollars available for Lockheed Martin to sell its worthless paper. It is "+ev for everyone", but it very much depends what you mean by everyone : every deal we close in Eulora means a little more famine for USG's version of Ugandan children. [↩]