Eveconomics

At EBANK, we have had a lot of issue with people impersonating us. CCP, the janitor of New Eden, are usually really nice about making sure this doesn’t take place, when made aware about any attempt at such.

On the eve-online forums this morning a post was made, stating that CCP had removed the clause which prohibited impersonation.

As far as I’m aware, that is really scary scenario. I realize that the nature of the internet allows for complete anonymity, and that impersonation is an inherent pitfall of a medium like the internet. But in a virtual world, surely there should be the opportunity to create a name for yourself, without fearing that somebody will be able to impersonate you to the degree that it can cause irreversible damage, without any chance of being able to counter nor prevent.

Impersonation 101

Impersonation comes in different flavors. There’s the indirect approach, which relies on people searching for a name, but not knowing the exact spelling. So say that one wanted to find “Chribba”. Often, people only know a person like Chribba, by reference of their friend over some sort of voice communication(Ventrilo, teamspeak). That means that people might not hear “Chribba”, but “Chrippa” or even “Kribba”. This allows for confusion on the part of an user. If a person registers these misspellings, then they might be contacted, and can lure somebody into losing their assets.

This happens to EBANK quite regularly. We used to allow people to deposit ISK into the bank by donating money to the character “EBANK Ricdic”. If people created a character called “EBANK Rikdic”, it might confuse a person enough to cause them to deposit to the wrong character.

The second approach that relies on the fact that people in most online games are allowed to have several identities inside the game. Using a bit of social engineering, it’s possible to trick someone into thinking that you are an alternative character of somebody else.

So while it is still illegal to impersonate other players, it raises some interesting points in my mind.

The case bridging the gap

I think there is a reasonable argument for creating a system where individuals can become “Confirmed” members. A system like this is commonly seen implemented by social networking sites. While it’s not limited to social sites, more extreme kinds of identity confirmation are things like “Extended Validation Certificates”, which are glorified SSL certificates, which certifies that a legal entity are whom they claim they are, as well as the validation technique which Paypal uses.

I have yet to see this being tried in a virtual world. However, I think for a complex game like EVE Online, there’s certainly a player-base which would benefit from this.  Especially the people who operates in the player-driven market, could benefit from being able to identify the identify of a person. While it does not stop scams, it will increase the barrier to entry considerably.

While it’s a good thing to establish a sense of persona in game, it will break the immersion of the game. And I’m sure that this is an undesirable effect of taking EVE from being a recreational environment. But there’s another option.

I give to you, trademarks!

The ability for a person or corporation to create a trademark which is easily identifiable is an interesting concept. Having a Trademark owner, who can grant and revoke a persons “usage” of this trademark, which would show up in their character sheet, it’s possible to create something that’s not easily fake-able. Unlike corporation name, a trademark would have to be unique beyond the spelling. It would have to be confirmed to be unique by a human.

I realize, having been on the Council Of Stellar Management for a year, that the resources inside a company are pretty sparse, that this is probably a long shot.

Brand recognition is a fundamental concept in economics and is a corner stone of culture. It would be an interesting feature, yet simple addition to the vibrant community. We have already seen how players have gone with a feature and used it for things which it wasn’t necessarily intended for. Who knows where the players would take it.

Just because something is simple, doesn’t mean that it’s useless. A trademark feature is a natural progression towards an environment where characters are truly valuable and there’s a way to establish a name for yourself.

Not to screw in a light-bulb. Honestly, I couldn’t care about that. And I doubt CCP would either, seeing as it’s light 24/7 in Reykjavik at present.

But it has been about a year since the first CSM was sweating their asses off in the meeting room, known as Exodus, at CCP HQ, due to the lack of air-conditioning. A small ½x½ meter window was our savior that weekend.

One of the topics for discussion that weekend, was shares in EVE Online. Mainly the fact that they can’t be traded. But a very important thing which was also discussed, was the problems with share dividends. The dividends system is really old by comparison to things like the alliance system. However, it suffers from a “large” problem: It’s impossible to pay out a large sum of ISK at once.

The technical aspect

It turns out that the dividend system can only pay out the value of 2,147,483,64 ISK at a time. Anybody who has taken a computer science will, will immediately identify this value to be the size of a signed 32-bit integer. I.e an integer value with sign, that fits into 32 bits. The value of 32 bits is equal to 2^32, which comes to 4.3 * 10^9. That means the unsigned value of a 32-bit integer is 4.3 * 10^9 big.

To make it signed, you divide the value by 2, and put both + and – signs in front of that. That makes the 32-bit signed integer have a value from −2,147,483,648 to +2,147,483,647.

Based on this information, it’s fair to assume that the dividend system validates it’s values against the capacity of a 32-bit signed integer.

CCP could make it a 32-bit unsigned integer. But then again, that would only double the capacity. While it might be a temporary fix, in the long run we will face the exact same problem.

Bring out the 64 bits!

The obvious solution to this problem is to allow the dividend system to pay out the value of a 64 bit integer. The capacity of 64 bit is equal to 2^64, which is equal to 1.84 * 10^19. That’s a lot!

Even by making said value signed, it will still be more than enough.

“But we don’t have time”

Because the dividends system simply creates a transaction in the EVE database, it’s fairly reasonable to assume that the problem lies client-side. As such, it must be a value check on the client, which keeps you from paying out a large value. Because the value of transactions are virtually unlimited at this point(Probably a 64-bit signed integer) in terms of EVE Online, it should be possible to change the dividend system to allow such high payouts.

How long might it take? Well, assuming that the value validation on the client side wasn’t coded by a monkey, it might be a single method which needs to have it’s value, which it checks against, to be a 64-bit variable. Hard? If it is, then I’d like to point out that maybe there’s a larger issue at play: That the code-base was coded by monkeys.

CCP is known for it’s yearly fanfest, which in and by itself is not that uncommon, even if CCP has a quite different way of doing it than, say, Blizzard.

Every year, CCP invites players to join them in Reykjavik, Iceland, for 3 days of talks about EVE, roundtables and general fun, with the giant party being on the very last day of fanfest. CCP obvious has costs involved with having to pay for the venue, food staff, crew, etc. In the past they have merely sold passes for about 75ish USD per person. Given the fact that it’s not uncommon for conferences to run close to break-even in terms of actual cost, I think it’s fair to say that 75USD is a very fair price.

To my utter surprise, some clever guy at CCP(Possibly while drunk) figured out that they could sell the fanfest tickets for the in-game timecards, known as “PLEX”es(Pilot License Extensions). For a mere 5 of these, you get a ticket to fanfest. The interesting thing is that these PLEXes are sold by CCP for real money, like normal game-time cards. I have discussed PLEXes before on this bug. But what makes PLEXes very different from “normal” game-time cards, is that they can be sold for in-game currency.

The cost of 5 of these is in the order of about 85 USD. They are sold in bundles of 2 for around 35 USD. They have the value of 30 days each.

The smart part is that in order for 1 fanfest ticket to be bought, a person would have to buy 6 of these PLEXes. That means that unless he is buying for a friend too, he will end up with 1 extra PLEX. That can either be used for more game-time OR be sold on the market for in-game currency. That means for every fanfest ticket sold, there should actually be 1 extra PLEX in the system, or 1 month of extra game-time.

That’s a very smart way of promoting the “legal” way of buying ISK. And it creates an increased supply through the 1 extra PLEX, as just described. And using basic economics theory, extra supply leads to extra demand, or a lower price.

In addition to that, CCP offers “Sisters Of Eve” tickets. These are tickets which are intended for family members of EVE Players, who wants to go to Iceland, but don’t want to be together with all the nerds. This year, they are taking the attendees to a gletscher(I’d like to go there, to be honest) on the first day, and for some kind of spa on the second.

Personally, I think this is cool. From a market perspective, it increases supply and demand for PLEXes, which has several uses, and strengthens the market.

However as I have discussed briefly before, I’m paranoid about when governments and other interest groups are going to get the smell of it, and pursue it and try to regulate it. The scenario isn’t unlikely. It’s just a matter of time, and the current rate of growth in the MMO market.

At this point, it’s now possible to buy in-game items for real-life money, and then buy something out of the game, for that, i.e the fanfest ticket. That completes the full circle between the game and real-life. You can buy in-game values with real-life money, and vice versa. When the governments all over the world gets the hint of this, is probably just a matter of time. Eventually they will try, and things like these makes that day move closer.

Recently in the world of New Eden, there’s been discussion about botting and what action CCP should take.

Botting has been the white elephant in the room for some time now. Everybody knows that there is “macroers” out there. Or at least extremely predictable people. But quite recently, our dear Chribba did something extremely interesting.

EVE allows you to keep log-files of all in-game communication. Extremely handy feature, which very few has actually data-mined, even if there’s some very interesting applications for it.

Chribba went ahead and put a character in the main trade-hub in New Eden, Jita. It’s generally known that Jita “local” channel is mostly pure spam. In addition to that, it’s also fairly widely known that Jita local tends to be filled with scam.

However quite recently, some smart guys figured out how to abuse inconsistencies in the way numbers are written. Let me give you an example.

On the normal market, all numbers are written like 999,999,999.00. On the other hand, in a contract, the very same number would look like 999,999,999. As you will notice, if there’s no cents cost, said cents will not be showed. While this is a serious game-design problem in my opinion, that not the point.

What Chribba recently proved, is that there’s a considerable amount of “shady” behavior when it comes to the “chatting”(Or lack there of), in Jita local.

From following data, we can see that a minority of the people in the channel, are responsible for the most of the chat. Right, no big deal you might say. But one will also find that the “chat” is extremely repetitive. In fact, most of it is simple spam of contract scams, abusing the cents-issue.

There’s some clear patterns to be observed in the logs, if you look into those.

Ricdic, amongst others, suggested on the Market Discussion forum that CCP should start “to track repetition in key presses in order to determine if someone is a bot”. Being fairly concerned about privacy, even if all my RL-information is out there as a result of my CSM-candidacy etc, I entirely disagree with the suggesting put forward by these people.

What is suggested is indisputably a key-logger. While the intention is of course not malicious, it’s important to notice that there’s some people out there who’s QUITE serious about their privacy.

One of those is EFF, who had some serious concerns about Blizzard’s Warden software.

I think it’s extremely important that while it would be nice with a game without any botting/macroing, that we do not compromise the privacy of the individual, as we are seeing in our current society(USA and others are great example of governments who want’s to spy on people, and get away with it).

I’m not suggesting that CCP should ignore it. However, I think it’s important to look at the situation from a more practical aspect rather than idealistic. If a macro/bot is causing serious grief on players(Or CCP), then we should deal with THAT individual. It’s impossible to stop it all entirely.

People like Bjørn Lomborg, who see things in a larger perspective, have some very interesting views, which I find relevant to this discussion. Eventually CCP only has so many resources. By focusing it on the things which bugs the players the MOST, rather than trying to break up with certain issues which can’t be avoided anyways, we are all better off.

This weekend the second meeting during this Council Of Stellar Management was held. We spend about 3 hours discussing a number of issues, most being related to the recent expansion to EVE Online, “Apocrypha”, which introduced a number of really exciting things, but also a few problems which we tried to cover to the best of our ability.

At the meeting the topic of 0.0 mechanics came up. A few members of the CSM have a large interest in 0.0, so it was only natural that we eventually addressed that topic. A few questions were bounced around, to which I thought I’d collect my thoughts and throw them out there. So here you go!

This is NOT the mechanic you are looking for

I think that people have become obsessed with solving solutions with mechanics rather than taking alternatives solutions which will give the players a greater degree of power. It’s my understanding the sovereignty was originally implemented in order to prevent “station-bouncing”, where people would take turn at claiming a station. So while it helps with solving that problem, it’s one of the few desirable things which the mechanic brings with it. The other thing, which is also most important, is the e-peen-factor.

Once we start discussing e-peen, it’s a largely ideological discussion between the idea that EVE is either a game or a virtual society. The former condones and appreciates the fact that people compete(That’s the whole idea from their point of view, because that’s fun). From the point of view of a person who likes to think of EVE as a virtual society, it’s not a desirable thing, because e-peen doesn’t foster a good attitude of the community, because it’s elitist.

The question really is, do we NEED a sovereignty mechanic? If were players shape how 0.0 looks rather than a crude mathematical way of determining who owns what, wouldn’t everybody be better off? What benefits does it bring to the player, to have it?

While there’s a case to be made for controlling the deployment of things like Jump Bridges and Cyno Jammers, then I suggest that maybe there’s a system which could allow for this kind of granular control without bringing with it undesirable ramifications?

Something about lipstick on a pig

A saying goes along the lines that even if you put lipstick on a pig, it’s still just a pig. While it might seem convent to just add a few bells and things to the current system, it won’t really address the core issues. Hence why rather than just beating the current system to the point where it reanimates itself, starting on a blank slate might be a consideration which has to be made.

Shape the world, not people

We have seen time and time again how people with power have tried to shape people’s behavior to fit into the world, rather than shaping the world for people to fit in.

And here is the first mention of what really is the crux of this whole post. Government! 0.0 is all about political conflicts. 0.0 is the playing-field and sovereignty is the rules to which the game is played. While this is the opposite to using the fort metaphor(HI GREYSCALE), I think both makes sense in it’s own context. Maybe that’s just to show the weaknesses both of these metaphors have. However when discussing the political and territorial(macro-level) aspect, rather than micro aspect(Individual systems as the playing-field), it makes a bit more sense, meaning that they can co-exists without causing any headaches.

So in order to not shape people, we need to figure out what kinds of people are out there exactly. What types of social structures, and their ideology and way of playing, is out there. It was apparent from the discussion, which the CSM had, that there were strong ideological differences between different types of players. So I came up with following:

Player-types

Embrace diversity and foster it

The idea is that there’s a range of different social structures and ideas about what 0.0 should be like. That is why I think the initial focus of a new 0.0 should be to figure out how to best shape the world and the tools to suit all these kinds of structures. A feature is all about giving players tools to shape the world and not tell them how the play the game. If they want to blow a hole in the fort’s walls, rather than use the entrance, then they damned better be allowed! Want to catapult yourself into the fort? Go right ahead. Right now we have a sovereignty system which tells you to use the front-entrance and that you have to have your army walk in a straight line. That’s the wrong way of looking at things, and I think any eventual new incarnation of the system should take a the approach of giving players tools, rather than drawing up a clear playing field. The players should draw the playing-field themselves trough their actions.

Corporate and governmental tools

I’d personally love to see EVE to be the first game to create so extensive tools for it’s players, that true government-style things emerge. While we already have entities which mimics politics, we don’t have any real tools for it. At present it’s all kinda “fuzzy”. Promoting the idea that alliances should be a government-like entity, is something that I think is an awesome idea. Once we start creating a society where people really “belongs” to a society, we can create really  interesting situations.

Well. This is just my thoughts on the approach which I’d like EVE to take. This is not an execution plan or anything useful to hash out concrete features. That will have to wait till later

You haven’t derailed yet? What’s going on?

Oh! I did a lecture at EVE University this friday. I’m pretty happy with how it turned out, even if I was pretty tired(Should be pretty easy to notice from how easy I was to distract al the time). I will try to find a recording and share it with you guys. I discussed my experience with the CSM, having been a part of it for almost a year straight now. Any new candidate should have a listen. There’s some gems in there, if I may say so myself.

As I’m writing this, my dear love Tranquility is being patched with Apocrypha, one of the coolest expansions I have ever seen to a game. I have obviously prepared myself for this big event by stocking up in advance of the large gold-rush. But I thought I might create a blog post about the economics of expansions, which I briefly discussed in my EON article in EON #13.

ISK sink with a touch of inflation

To an expansion, there’s several parts. Usually, there’s new gadgets and ships for people to fly. As we saw with the Orca when it was released with Quantum Rise last year, that creates a major ISK sink(Currency is removed from the game) in the short-term. When we talk about real-life economics, it’s not uncommon that people see the decrease in money-supply as deflation. While that’s right, this is not the case in EVE. Neither is inflation the same as economic growth. The terms are merely defined by price-indices.

But when new ships are released, we do see a very large spike in demand. It’s conventional wisdom, that if you buy up minerals before an expansion, chances are you will make a nifty profit. This is due to the price-inflation which an increase in demand/speculation brings with it. In this case we see that the increase in the price-index and *NOT* the economic growth is what causes inflation. This is unlike real-life where people tend to use inflation interchangeably between those 2 concepts.

AI is the root of all evil

On the other hand, a very interesting new feature, the new NPC artificial intelligence, might turn out to be the root of all economic-growth-evil. Insurance in EVE is known to be a fairly decent source of economics growth. I can obviously only speculate about the impact that rapid economics growth might cause, but lets leave that till another post.

But the idea is that because of this new and improved AI, we might see more ships blown up, resulting in an increase in the rate of the economic growth. This is just speculation, but having tried this new AI on the test-server, I wouldn’t be one bit surprised if this turned out to be the case.

If people lose ships, they will want new ships to replace them. Again, an increase in demand which goes to amplify the above-mentioned inflation in prices due to the demand.

We are being invaded!

With CCP going to great lengths to acquire new subscribers, I think it’s reasonable to assume a spike in players in the world, which could have a large effect on the market once again. As if more demand of materials trough lost ships and new shiny gadgets isn’t enough, I think that we will see that the new players which will flock to the game, will require a decent amount of ships. However there’s a case to be made against the idea that it will be a very sudden spike. Due to the vertical learning-curve in EVE, I think we will see a wave-like increase in demand. When it’s on deep water the wave is very high until it reaches land, where the amplitude(and thus frequency) decreases. We will see an initial spike in the frigate and cruiser market. 1-2 months down the line it’s also quite probable that we will start to see an increased demand in battle-cruisers and battleships. What effect will that have? Well, given normal supply and demand theory, we can assume that as demand increases, price will increase too. That gives a net inflation.

Fear not, our markets shall save thee!

It is however important to realize that EVE is an extremely effective economy. It’s extremely rapid to respond to changes in supply and demand, thanks to a stock-market-like behavior.

So while it’s certain that we will see an inflation spike in the short-term(We are talking 1-48 hours), after that we will have a period of deflation relative to the spike, until it reaches a level which is likely to be above the current average.

Recently EVE-Bank reached a major milestone. EBANK was launched about August 2007 and was soon to become really big. At this point, we have over 5000 users, which is a lot.

A couple of days ago, we managed to reach 2 Trillion ISK, even if we now are just a tad below due to a large withdrawal. Never the less, we managed it and we have shattered the record for public investment in a single entity.

However, EBANK has to control it’s growth. If we take on too many customers, then we will break our neck. Thus, we have to limit the amount of new accounts at that point. It’s obviously something we hate doing, but it’s needed. That’s why competition in this field is good for the publics interest.

But I have been reflecting about what it took to create EBANK and how it has come together with the community to create something truly great.

The history of EBANK

Back when I was a complete stranger on the “Market Discussion” forum, where all of the secondary market takes place, I launched my first IPO. Obviously even back then people were somewhat paranoid. So in order to increase people’s confidence in it, Ricdic offered me to lock down all blueprints in his corporation in exchange for a favor. At the time I thought that was fine. Well, a few months later I read a thread by Ricdic, suggesting he wanted to start a bank. I thought that he was bonkers. But never the less he approached me and wanted a favor of mine. The EVE Online API had just been launched, and he wanted that to be a core part of his new bank. Given my programming experience, he wanted me to create him a simple bank. No big deal.

I went ahead and created a library for pulling the XML from the API and parse it into a database. At that point it was still proof of concept however. But we had a number of people who helped testing the concept version which worked very well despite it’s simplicity.

After showing Hexxx the concept I made, we got him onboard the project for what is now EBANK. Along the line we got a board of directors and a number of staff members. Eventually we launched EBANK and it has been growing ever since from our efforts. And it has grown beyond our wildest dreams

It doesn’t take a lot

The moral of the story is really simple. Even with my self-taught skills(Which can be attributed to my shelf worth of books on programming) it was possible to make a difference. Granted I by no mean did the EBANK software alone. Most of the work is to be attributed to Hexxx and Mr. Horizontal. But if you have an idea, hook up with people, make a proof of concept version. Version 1 is never perfect, so you want to take the things you learn from the concept and make them solid. Otherwise, you will find that you have baked concept and a piece of software where there’s some fundamental issues. By writing the 20% of the code which does 80% of the job, you learn what works and what doesn’t. Once you have learned the lessons and faced the problems which will arise, you can boil it down and write the 80% of code which is trivial to write but takes time.

Innovation and thinking out of the box is what makes our synthetics worlds’ financial systems such a wonderful thing. As we are given more tools by the gaming companies, just like CCP does, we can build a solid foundation of social and financial structures which will create the basis for our further experience of the game and evolve virtual worlds into something truly bigger than that if it’s parts.

On the Council Of Stellar Management we have spend the last week or two discussing and looking at the issue about Tech 1 loot from Non-player characters. It’s my perception that people who have considered the impact and the potential a change in this regard would have, are supportive. Obviously, there’s a few short-comings of the immediate and obvious solution. This is why the CSM has agreed not to rush this out the door.

For the benefit of myself I made a mindmap to try and outline the issue. I thought that I would share it with everybody.

T1 Loot Thumbnail

Feedback would be appreciated.

I have noticed recently that the ISK Sellers in EVE have been increasingly active in filling my mailbox with silly adverts for their shady deals. This seems to me like a product of a change which CCP recently made to their GTC program. But let me just backtrack a bit and look into the recent history of how CCP has dealt with “ISK” selling trough a clever business strategy and game mechanic. If you know about it, move on from that part for the extent of my observation and analysis.

History of GTCs

For the longest time EVE has offered Game Time Codes. A popular way of going about paying for one’s subscription if one doesn’t posses a credit card. A clever individual found out that they could trade it for ingame currency. Obviously some people disagreed with this, but CCP didn’t make it illegal unlike other games. Be it conscious or not on their part at the time, I can only speculate about. But the fact is that they had the option between either making it illegal or providing a supported way of doing it, because of the sheer risk of people trying to fraud people with these.

In advance of writing this post, I tried to find out exactly when the “old” GTC system was actually implemented. It’s a major event, when CCP went ahead and made an actual game-mechanic which allowed you to trade GTC’s trough the account interface on the website. It was also a step towards being able to buy in-game currency for money and it being a legitimate and respected thing to do.

The latest development was that CCP implemented a way of trading 30-day game time codes(”Pilot License Extensions”, very clever) on the in-game market. When the Council Of Stellar Management was approached on this issue which was already being worked on at the time, I think there was a more or less unanimous agreement that this was a good idea. At the time I was quite vocal about the fact that CCP doesn’t offer GTCes themselves in the same way as Battleclinic. A month or so ago by now, CCP went ahead and started offering GTC’s without a middle-man.

Obviously there’s several reasons to why CCP would do this, which will bring me to my conclusion of this post. However it’s important to emphasis that to the average Joe, it’s my perception that it was very welcome. It’s granted that the “Elite”/Veterans of EVE maybe weren’t amused by this idea, due to the key aspects of this, mainly due to the fact that they tend to have very strong opinions about in which direction that the game should go. It’s a valid argument, but it’s not relevant to this discussion.

Impact of this change

And here’s where an observation I have made recently comes into play. Many experience that the people who illegally sell in-game currency tend to not only spam the “local” channel, but also by evemail. CCP managed to get rid of most of this some months ago. However after CCP started offering GTCs themselves, I have noticed a sharp increase in said spam in my inbox. After reflecting on this a short moment, it became apparent to me why that was the case.

Lets make the assumption that CCP did this to combat the ISK Sellers. How is this best done? Decrease the barrier to entry to do it legally and thus cater to the demand which would otherwise take the risk and buy ISK illegally. So here’s what I think that happened:

People found out that they could now buy ISK legally. Instead of taking the risk, they now just buy the GTCs from CCP. This is evident from the increase in supply of GTCs on the market in Jita, which has subsequently lowered the price of them by about 20%. The dear chinamen saw a drop in demand as a result of this, hurting their wallets. Hence we now see a knee-jerk reaction(The act of being more active trying to gain more customers) by the ISK sellers, to the move by CCP. It’s also noteworthy that they are now starting to trying and blur the line between GTCs(PLEXes) and buying ISK illegally. An interesting move which could benefit them. But at this time I think that the widespread use of ISK buying trough illegal means is put on ice.

It’s important that CCP keep pushing for it. We have seen with the upcoming boxed release CCP has chosen to include a 60-Day GTC, which can be converted into 30-day game-time cards. So you could basically get 300million ISK and 30 day game-time card by just buying the box. An interesting way of introducing new players to EVE by making it one of the first choices that these players have to make.

Welcome.

This blog is a new by me, Charlie Eriksen, also known as LaVista Vista in EVE Online.

The purpose of this blog is to have a place to write about economics. Not only in EVE(As the name might suggest), but in virtual economies like EVE.

As long as I don’t procrastinate too much, you can expect to see random chatters and some relevant stuff right here. So please stay tuned.