No offense meant to anyone, but the Wikipedia entry on Inflation is extremely bad. 'Inflation' is not a 'general price increase over time'. That would be like believing 'heat' is a general temperature increase over time. General prices can only rise if money supply is being increased at a too-high rate. Slow down the rate of increase, and prices will fall. Given fixed, constant money supply, and a fixed quantity of goods to purchase, general prices will be constant. Even if demand for TV sets rises due to the Superbowl, and people start paying more for that good, society as a whole will necessarily spend less somewhere else on other available goods, thus 'general' prices will be flat, neither rising over time or falling. IRL, if money supply were to be fixed at a constant level, then because resources are continually harvested, and new goods produced, increasing the total availability of goods in the world, general prices would fall gradually as the ratio of goods to money supply slowly changed. Economists originally referred to the expanding of the money supply as 'inflation', and said that 'inflation', i.e. excessive money printing in the case of paper money, leads to generally higher prices (specific prices can still fall due to various reasons, such as productivity increases).
(Real prices rise (or fall) for many reasons. It is in the interest of many entities to have you believe this is inevitable and/or even for your own good. Popular usage by the media has resulted in the confusion of 'inflation' coming to mean 'price inflation', usually in the context of prices rising due to a 'heating' economy, bad weather, consumer demand, 'just because', etc. Economists use the term 'Inflation' to refer to an increase in the money supply, and will sometimes make this explicit by using the term 'monetary inflation'.)
I'm a total lvl 8 noob, so correct me if I get something wrong about CoX...
With respect to INF, it is the 'monetary inflation' definition that is most pertinent. INF is money in CoX, after all. To illustrate, if two monetary units (monits) could buy all the goods in a society, then a fraction of a monit might make you the equivalent of a trillionaire in current INF or dollar terms. If you own one of those monits, then you could buy half of all the goods available in that society. If an entity then produces another 2 monits, very quickly the total price of all the goods in society would rise and settle at 4 monits. Your one monit is now only able to buy 1/4 of all available goods, and you have had your total purchasing power cut in half, while some beneficiary of the new monits just got a lot of free money. In essence, you were just taxed on your wealth by 50%. No biggie for you, at least in a game world, since you have so much. For the average poor player with the equivalent of a few trillionths of a monit to his name, anything sold on the free market just became twice as expensive.
In CoX, INF is created constantly out of thin air. It's not a fixed quantity that simply circulates, as real money does (or should do). Thus prices on any free-market in the game comprised of non-infinite goods (items of some degree of scarcity, be it rare or not), will not be stable, and in the case of constant INF creation (monetary inflation), the prices will increase. Coming up with sinks for INF is a band-aid at best, some of which are better than others.
It should also be noted that simply buying and selling of items is only a sink to the degree that INF actually disappears forever, i.e., the INF you spent to buy anything from the system (NOT other players), the INF required to produce something from a recipe, the INF given to the market in fees, etc., are all being sucked out of the game. Thus the total INF disappearing in a 300 billion INF transaction might only be about 15 billion in the consignment house, and zero in a player to player trade, right? In CoX, it's simple and easy enough to know if INF is still being created too quickly relative to sinks, and that is if free-market prices for these rare items keep going up. If they start to trend down over a long time, then sinks are more than keeping up with INF creation.
So, it's difficult to incorporate a money system in a game, and then just create that money from scratch as a drop, without having the problems we're seeing. I realize the currrent CoX system evolved over seven years, and there was not necessarily that much INF being created to start, and not necessarily any obvious damage to not sinking it all within the first year or so. I don't know the history, but the problem is obviously serious at this point, since as a brand new, 1-week player, I was randomly drive-by-gifted a total of 1.1 MILLION INF within a 24-hour period, by two different players. This obviously has major game-balancing implications.
IRL, if we used gold as money, we would see very little gold 'evaporate', i.e., zero sinks, and very little net gain (new gold mined and minted). Prices would be very stable, with a likely gradual price deflation, as world production increased the sum total of all available goods and raw material flows relative to the total supply of gold, which would increase more slowly.
In a game, you don't want game-gold to just appear like manna from the sky. A better system might have INF be more like a commodity such as wheat. It could be used in a recipe to make other stuff, or sold as a raw commodity, but it wouldn't be THE money. Let's say the devs decree a separate money that I'll name 'monits', but that they might call 'statesmans' or 'heroes'. The money supply of monits would be held fairly constant relative to the amount of 'goods' in the game. Then as people slacked off on procuring INF, the price of INF in terms of monits would rise. As the devs started adding new sources of easy INF and more INF flooded into the game, the price of INF would fall, at least on the free-market. With money a separate, game-controlled 'commodity', general prices could be held to a fairly flat level, though in-game prices for specific items could still fluctuate wildly based on supply of rare random drops.
Then if a certain AT/build is not so good at getting INF for exchanging for money, the devs could possibly come up with plausible ways for that AT to acquire money in some other way, all without breaking INF-related game-systems.
(IRL, if gold popped out of every bug you squished and plant you grew, but it was required that it be used as money AND it never rusted away or evaporated in any way, then RL would be just as screwed up, with gold being plentiful for most, but still rare for some, and people lugging around ever-increasing mountains of gold to pay for sticks of chewing gum. Kind of like paper money is about to be soon. )
No offense meant to anyone, but the Wikipedia entry on Inflation is extremely bad. 'Inflation' is not a 'general price increase over time'. That would be like believing 'heat' is a general temperature increase over time. General prices can only rise if money supply is being increased at a too-high rate. Slow down the rate of increase, and prices will fall. Given fixed, constant money supply, and a fixed quantity of goods to purchase, general prices will be constant. Even if demand for TV sets rises due to the Superbowl, and people start paying more for that good, society as a whole will necessarily spend less somewhere else on other available goods, thus 'general' prices will be flat, neither rising over time or falling. IRL, if money supply were to be fixed at a constant level, then because resources are continually harvested, and new goods produced, increasing the total availability of goods in the world, general prices would fall gradually as the ratio of goods to money supply slowly changed. Economists originally referred to the expanding of the money supply as 'inflation', and said that 'inflation', i.e. excessive money printing in the case of paper money, leads to generally higher prices (specific prices can still fall due to various reasons, such as productivity increases).
)
(Real prices rise (or fall) for many reasons. It is in the interest of many entities to have you believe this is inevitable and/or even for your own good. Popular usage by the media has resulted in the confusion of 'inflation' coming to mean 'price inflation', usually in the context of prices rising due to a 'heating' economy, bad weather, consumer demand, 'just because', etc. Economists use the term 'Inflation' to refer to an increase in the money supply, and will sometimes make this explicit by using the term 'monetary inflation'.)
I'm a total lvl 8 noob, so correct me if I get something wrong about CoX...
With respect to INF, it is the 'monetary inflation' definition that is most pertinent. INF is money in CoX, after all. To illustrate, if two monetary units (monits) could buy all the goods in a society, then a fraction of a monit might make you the equivalent of a trillionaire in current INF or dollar terms. If you own one of those monits, then you could buy half of all the goods available in that society. If an entity then produces another 2 monits, very quickly the total price of all the goods in society would rise and settle at 4 monits. Your one monit is now only able to buy 1/4 of all available goods, and you have had your total purchasing power cut in half, while some beneficiary of the new monits just got a lot of free money. In essence, you were just taxed on your wealth by 50%. No biggie for you, at least in a game world, since you have so much. For the average poor player with the equivalent of a few trillionths of a monit to his name, anything sold on the free market just became twice as expensive.
In CoX, INF is created constantly out of thin air. It's not a fixed quantity that simply circulates, as real money does (or should do). Thus prices on any free-market in the game comprised of non-infinite goods (items of some degree of scarcity, be it rare or not), will not be stable, and in the case of constant INF creation (monetary inflation), the prices will increase. Coming up with sinks for INF is a band-aid at best, some of which are better than others.
It should also be noted that simply buying and selling of items is only a sink to the degree that INF actually disappears forever, i.e., the INF you spent to buy anything from the system (NOT other players), the INF required to produce something from a recipe, the INF given to the market in fees, etc., are all being sucked out of the game. Thus the total INF disappearing in a 300 billion INF transaction might only be about 15 billion in the consignment house, and zero in a player to player trade, right? In CoX, it's simple and easy enough to know if INF is still being created too quickly relative to sinks, and that is if free-market prices for these rare items keep going up. If they start to trend down over a long time, then sinks are more than keeping up with INF creation.
So, it's difficult to incorporate a money system in a game, and then just create that money from scratch as a drop, without having the problems we're seeing. I realize the currrent CoX system evolved over seven years, and there was not necessarily that much INF being created to start, and not necessarily any obvious damage to not sinking it all within the first year or so. I don't know the history, but the problem is obviously serious at this point, since as a brand new, 1-week player, I was randomly drive-by-gifted a total of 1.1 MILLION INF within a 24-hour period, by two different players. This obviously has major game-balancing implications.
IRL, if we used gold as money, we would see very little gold 'evaporate', i.e., zero sinks, and very little net gain (new gold mined and minted). Prices would be very stable, with a likely gradual price deflation, as world production increased the sum total of all available goods and raw material flows relative to the total supply of gold, which would increase more slowly.
In a game, you don't want game-gold to just appear like manna from the sky. A better system might have INF be more like a commodity such as wheat. It could be used in a recipe to make other stuff, or sold as a raw commodity, but it wouldn't be THE money. Let's say the devs decree a separate money that I'll name 'monits', but that they might call 'statesmans' or 'heroes'. The money supply of monits would be held fairly constant relative to the amount of 'goods' in the game. Then as people slacked off on procuring INF, the price of INF in terms of monits would rise. As the devs started adding new sources of easy INF and more INF flooded into the game, the price of INF would fall, at least on the free-market. With money a separate, game-controlled 'commodity', general prices could be held to a fairly flat level, though in-game prices for specific items could still fluctuate wildly based on supply of rare random drops.
Then if a certain AT/build is not so good at getting INF for exchanging for money, the devs could possibly come up with plausible ways for that AT to acquire money in some other way, all without breaking INF-related game-systems.
(IRL, if gold popped out of every bug you squished and plant you grew, but it was required that it be used as money AND it never rusted away or evaporated in any way, then RL would be just as screwed up, with gold being plentiful for most, but still rare for some, and people lugging around ever-increasing mountains of gold to pay for sticks of chewing gum. Kind of like paper money is about to be soon.