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Accipitor
Caldari
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Posted - 2008.04.11 16:17:00 -
[1]
Edited by: Accipitor on 11/04/2008 16:26:28 ok so i have been jiped 200 mil and ccp refused to fix the problem
here is what i petitioned (not edited)
"so i sent up a loan contract for 7 days meaning that they cna loan the money and at the end they pay it back?
isn't that what a laon is suposed to do?
well tehy accepted it then failed it and now im 200m less that what i had
your online website says nothing about this, i don't get colateral at all because i cna't put in colateral...
and i don't get my isk becasue it failed???
what kind of a contract did u create? and geve to the public?
will i see my 200 mil that i lost?
i don't know if this is an exploit but i would like to know is it supposed to work like this? this hurts and [not] impressed
Accipitor"
"Hi,
Sorry that we can't handle your case in stuck queue. Now I'm transfering your case into the right queue. Best of luck!
Best regards, GM Vitas EVE Customer Support Team"
oops ok thanks
"Hi,
You can read more about contracts here: http://support.eve-online.com/Pages/KB/Article.aspx?id=324
Taken directly from that article:
"#
Loan
You can decide to Loan an individual or someone in a specific player corporation or alliance items and/or money. You can set both a price and collateral, which is collected from the contractor upon acceptance as well as "Money Lent". You can either choose to loan money or to set a collateral, but not both. This is done to lessen confusion because setting a collateral and loaning money doesn't make any sense.
You can loan a lump sum of ISK by setting up this type of contract but you have to be aware that the payment for the loan is deducted upon acceptance, not completion. For example, if you're loaning someone 10M ISK and accepting 500K as payment you should set the loan amount as 10.5M ISK and payment as 500K. That way the contractor will receive 10M upon acceptance (500K is deducted immediately) and he will have to return 10.5M ISK when the contract is completed. You cannot set any kind of collateral with money loans so you should make sure that you trust the person you're loaning to. Also, since these types of contracts are almost always between two individuals they will not be visible to others in the character's contract history.
You can also loan most items you have, ranging from minerals to fully fitted ships.
If you enter a fitted ship into a loan contract the item hierarchy of the ship is maintained so all modules remain fitted. Important thing to note is that if you enter an insured ship into a loan contract you will not get an insurance payout if the ship is lost while on loan, but the contractor will get a basic payout for the lost ship.
However, if your corporation loans an insured ship to any character in the corporation or in any corporation in your alliance, the corp will get an insurance payout and in that case the contractor will not get anything. What this means is that if the ship is destroyed while on loan the issuing corporation will receive the insurance payout for it. Because of this the corporation might be able to have the collateral of such a loan lower than he might otherwise because it might just need to cover the price of a new insurance plus the price of other items. This only applies for corporations under these specific circumstances. It really doesn't pay for corporations to loan outside their alliance!
If lent items are lost during the loan period the contractor is able to replace them with identical copies except in the case of space ships. If the contractor loses a cruise missile launcher that he borrowed in this fashion he can buy a new one and "Complete" the loan contract, but if he would lose a Raven spaceship then he will never be able to complete the contract.
You are not able to loan blueprint copies, but blueprint originals can be copied. As such, you could loan a blueprint original in order for a corp mate to research it."
(continued) a drake and a 1965mustang have alot in common, they're cheap but thier fittings can get expensive.
./_ _ _ ___ __\ (]]]_ _ o _ _[[[) |\_o_ __ ___o_/ | |__|..............|__|
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Matsui Hideki
Royal Amarr Institute
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Posted - 2008.04.11 16:18:00 -
[2]
IIRC, you're not supposed to post GM logs on the forum
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la Rasa
Minmatar Tha Shiznit
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Posted - 2008.04.11 16:23:00 -
[3]
Originally by: kb article You cannot set any kind of collateral with money loans so you should make sure that you trust the person you're loaning to.
As confusing as that article is, that sentence seems pretty clear.
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Accipitor
Caldari
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Posted - 2008.04.11 16:24:00 -
[4]
You are not able to loan blueprint copies, but blueprint originals can be copied. As such, you could loan a blueprint original in order for a corp mate to research it.
The expiration possibilities for this type of contract are 1 day, 3 days, 1 week and 2 weeks."
Loan contracts, can be failed and the isk or items kept, sadly this is one of the risks of using that type of contract.
Best regards, GM Twinni The EVE Online Customer Support Team
(me)
"http://support.eve-online.com/Pages/KB/Article.aspx?id=324
does not have the
"loan contracts can be failed and the isk or items kept"
was not any were to be found nor was there a warning of any sort, if you ask me, if i loan money from the bank they make sure i pay it back or they will just take it back..... so because they have not paid me back my loaned money shouldn't i beable to take it back??
this is an exploit that i have fallen through... thinking im behind safety when "loaning" stuff out
it's very simple really, the original isk or items on a failed loan should go back to the original person at the nearest station
or if it's an item i could possibly get the "base price" back from the items that i lost in the failed contract loan
if im wrong on thinking this way then tell me and i will scam the bank with these policies"
(gm) Hi,
Any contract can be failed, except item exchange ones. Courier ones can also be failed and you keep the items.
From the article it says:
"You cannot set any kind of collateral with money loans so you should make sure that you trust the person you're loaning to"
We are sorry but in this case there is nothing further we can do.
Best regards, GM Twinni The EVE Online Customer Support Team
(me) "then whats the point of a laon .. if they can fail it then why not take it off and jsut make it to where you can only give money to the person ... "contract is a legally binding exchange of promises or agreement between parties that the law will enforce." .
a contract is a contract "Contract law is based on the Latin phrase pacta sunt servanda (pacts must be kept)" so where is the must be kept???
if i gave the money to the person then yeah i would be at fault but no i contracted the money to the person and that contract must be kept ..... its' the deffinition of contract......"
(gm)
Hi,
We are sorry, but this is how loans work in Eve. This is not always in line with what happens in the real world we are sorry. Loans are best used between two trusted partys if you are going to be loaning isk. We are sorry.
Best regards, GM Twinni The EVE Online Customer Support Team"
(me) "then rename the contracts to failed agreements"
(gm) Hi,
We will pass along your suggestion. If there is nothing further, can we close this petition for you?
Best regards, GM Twinni The EVE Online Customer Support Team
(me) b4 u do close this is there a discusion that i can post this on on the forums .... i think this is an intresting exploit that ccp refuses to fix
Accipitor
(gm)
Hi,
You are more then welcome to start a thread about this on our forums. We would suggest the general forum.
Best regards, GM Twinni The EVE Online Customer Support Team
------------------------------------------------------------------
the conclusion is that contracts are jipped from the begining and that a contract does not mean what they call it, it has no law
i rally every one that has been jipped to complain against ccp
Accipitor
a drake and a 1965mustang have alot in common, they're cheap but thier fittings can get expensive.
./_ _ _ ___ __\ (]]]_ _ o _ _[[[) |\_o_ __ ___o_/ | |__|..............|__|
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Dirk Magnum
Spearhead Endeavors
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Posted - 2008.04.11 16:48:00 -
[5]
Edited by: Dirk Magnum on 11/04/2008 16:48:19 tbh I didn't even know there was an official loan system in this game. Next time forgo the official system if it's bugged and just give them the money straight away, AFTER getting collateral from them of roughly equal value (for example, set a private item exchange contract for, say, "I will give 200 mil -- I will receive Megathron x2".) Obviously the "I will receive" bit will have to be for items they already possess.
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Tarminic
Forsaken Resistance The Last Stand
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Posted - 2008.04.11 17:30:00 -
[6]
Originally by: la Rasa
Originally by: kb article You cannot set any kind of collateral with money loans so you should make sure that you trust the person you're loaning to.
As confusing as that article is, that sentence seems pretty clear.
Ahem. ---------------- Tarminic - 34 Million SP in Forum Warfare Play EVE: Downtime Madness v0.81 (Updated 4/8) |
Crackzilla
The Shadow Order SMASH Alliance
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Posted - 2008.04.11 18:01:00 -
[7]
Working as intended. Seriously.
How else would you propose that a loan system work? That after the loan period the isk is deducted from the account regardless of if they have the isk or not?
This could be obviously abused. I setup a 1 bil loan to a friends alt. The alt fails to pay back the amount. The alt spends 1bil of gear and splits it with me. I get my 1 bil back a week later. The alt is deleted and a new one created.
Even in the real world contracts are not enforced to the degree you are suggesting. Companies and individuals break contracts often. The legal system encourages payment by making the cost of breaking the contract painful. The legal system does not 100% enforce contracts.
I could lie on a mortgage application and sign a contract to buy a house. By the time the company has realized that I have no money and started eviction procedures I would have gained several months of free rent. The law cannot take money that I do not have. Companies compensate by tracking "trust", ie credit scores, and the legal system brings the pain by filing possible fraud charges. So is the pain worth a few months of free rent?
What you've found is that is trust in an online game cannot be tracked nor the people held accountable. Not all features in the game are intended for everyone to use. Some features like loans should be used when backed by a corporation/alliance or a baseball bat when used with a real life friend.
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Ixianus
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Posted - 2008.04.11 18:07:00 -
[8]
Originally by: *****zilla
Working as intended. Seriously.
How else would you propose that a loan system work? That after the loan period the isk is deducted from the account regardless of if they have the isk or not?
This could be obviously abused. I setup a 1 bil loan to a friends alt. The alt fails to pay back the amount. The alt spends 1bil of gear and splits it with me. I get my 1 bil back a week later. The alt is deleted and a new one created.
Even in the real world contracts are not enforced to the degree you are suggesting. Companies and individuals break contracts often. The legal system encourages payment by making the cost of breaking the contract painful. The legal system does not 100% enforce contracts.
I could lie on a mortgage application and sign a contract to buy a house. By the time the company has realized that I have no money and started eviction procedures I would have gained several months of free rent. The law cannot take money that I do not have. Companies compensate by tracking "trust", ie credit scores, and the legal system brings the pain by filing possible fraud charges. So is the pain worth a few months of free rent?
What you've found is that is trust in an online game cannot be tracked nor the people held accountable. Not all features in the game are intended for everyone to use. Some features like loans should be used when backed by a corporation/alliance or a baseball bat when used with a real life friend.
Instead of your completely ******** suggestion.
How about a collateral item is offered pending acceptance from the loaner.
For the duration of the loan the item is placed in suspension with neither party having access to it.
If the loan is repayed by the deadline the item is returned to the loanee.
If the loan fails to be repayed by the deadline the loaner takes possession of the item.
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SoftRevolution
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Posted - 2008.04.11 18:09:00 -
[9]
Edited by: SoftRevolution on 11/04/2008 18:10:25
Quote: ok so i have been jiped 200 mil and ccp refused to fix the problem
This is a fakepost, yes?
Surely noone could be this stupid?
How would you have 200m to loan and not know this?
Please be trolling EVE RELATED CONTENT |
Karentaki
Gallente Aliastra
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Posted - 2008.04.11 18:23:00 -
[10]
The loan contracts are designed for loaning ITEMS, not ISK. The fact that you have 200 million ISK yet don't know this disturbs me. Also, I suggest you edit out the GM communications before you get switch-slapped.
On the other hand...
Would you trust something with teeth but no eyes!?!?!
Drainpipe of Doom pilot! |
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Crackzilla
The Shadow Order SMASH Alliance
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Posted - 2008.04.11 18:34:00 -
[11]
Edited by: *****zilla on 11/04/2008 18:35:30
Originally by: Ixianus
... yai (yet another insult)...
Wasn't my suggestion. It was what the OP was asking for. Did you read the thread before posting?
Originally by: Ixianus
How about a collateral item is offered pending acceptance from the loaner.
Item Exchange is used for this currently. Person A needs isk, Person B volunteers to provide some but need collateral. Person A sells something to Person B with the verbal agreement that Person A will buy the stuff back at a later date. No drama.
Perhaps you're thinking of acting as a public bank. You'd like to offer a 200mil loan, see collateral offers, and accept any that met the minimal guidelines. Still wouldn't work publicly. You would be spammed by offers of shuttles for collateral as players work the odds that someone presses accept.
There would be some uses for the modificatons you propose but I can't them being widely used.
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Estel Arador
Minmatar AFK
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Posted - 2008.04.11 18:51:00 -
[12]
Originally by: Accipitor ok so i have been jiped 200 mil and ccp refused to fix the problem
Unfortunately, CCP can't fix the problem since the problem is you being ignorant...
Skills Explained |
Joe Starbreaker
Starbreaker Spaceways
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Posted - 2008.04.11 19:05:00 -
[13]
Originally by: Accipitor ...they have not paid me back my loaned money shouldn't i be able to take it back?
Have you tried?
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Gridwalker
Amarr
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Posted - 2008.04.11 19:13:00 -
[14]
On a more sympathetic note...
I can understand how someone who is new and has never used the contract system before might be fooled into thinking there is some form of guarantee. There is, after all, no explicit warning.
But what you have to understand is, there is no possible way to make a guarantee. You need to treat everyone you come across in EVE as someone that could vanish--without ANY trace--instantly. How do you hold a two day old character accountable? How do you hold any character accountable when they can just transfer the stolen goods to another character and delete the one you dealt with?
You can't.
EVE was designed to be harsh, and justice and disputes are handled by the players, not by CCP. If you can figure out how to scam someone, without using actual exploits, that behavior is allowed. When I was new, I was tricked out of isk. I learned from that and moved on. You'll need to do the same.
In EVE, trust no one.
Oh, and before you decide to poke around the contract system and get ripped off again--avoid freeform contracts. Both loan and freeform contracts are designed for corporations for record-keeping. You can also get ripped off with courier contracts if you're not careful.
Only "Item Exchange" contracts are secure, and even then you need to keep a close eye on what you are doing as there are ways to fool someone who isn't paying attention.
Anyway, welcome to EVE.
-Grid
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Tzar'rim
Reckless Corsairs
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Posted - 2008.04.11 19:21:00 -
[15]
At all the "OMGLOLZROXOR u haf 200 mil how can u not know!!!?!!?!?!?!?!!?" tools; Not everyone uses the loan system nor should they have to deal with it in their whole EVE career.
Go troll somewhere else, or rather don't troll at all.
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Mithfindel
Argent Group
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Posted - 2008.04.11 19:22:00 -
[16]
Originally by: Joe Starbreaker
Originally by: Accipitor ...they have not paid me back my loaned money shouldn't i be able to take it back?
Have you tried?
I wonder if "Don Vito" Viceroy is still playing...
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TheVad
Amarr Metalworks
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Posted - 2008.04.11 19:35:00 -
[17]
Edited by: TheVad on 11/04/2008 19:36:15
Thats why for isk loans you forgo all this and use a trusted source like EBANK or FuryBank
TheVad
Project Manager & Chief Editor| www.eve-bank.net
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Ixianus
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Posted - 2008.04.11 19:35:00 -
[18]
Originally by: *****zilla Edited by: *****zilla on 11/04/2008 19:19:26
Originally by: Ixianus
... yai (yet another insult)...
Wasn't my suggestion. It was what the OP was asking for. Did you read the thread before posting?
No, I can't read or write. Thankyou for your jackass response. And you did make a suggestion Mr.Minmatar. You suggested not using the system at all unless you trust the person, which is imo ******** when I thought up a better system in 5 seconds.
Now, past the obligatory forum smack.
Quote: Item Exchange is used for this currently. Person A needs isk, Person B volunteers to provide some but need collateral. Person A sells something to Person B with the verbal agreement that Person A will buy the stuff back at a later date. No drama.
Perhaps you're thinking of acting as a public bank. You'd like to offer a 200mil loan, see collateral offers, and accept any that met the minimal guidelines. Still wouldn't work publicly. You would be spammed by offers of shuttles for collateral as players work the odds that someone presses accept.
Nor could you define a minimum amount for isk accepted. What is the value of a Mega? What is the value of a domi webber? Some items do have an average market price but anything sold through contracts does not.
There would be some uses for the modificatons you propose but I can't see them being widely used.
Hence why I said pending loaner approval.
Person A wants 350 million, alright. So they offer 12 units of Punishers, this is clearly insufficient, so the loaner refuses the offer.
In this system the responsibility of estimating value of collateral would rest with the loaner, and so no average worth would have to be assigned, although the running market average of things could be shown as a general indicator.
The issue of spam is possible yes, but no more than currently experienced with the contract system/escrow I would imagine.
I have toyed with the idea of running a loaning operation / pawn in the past, and with proper tools to prevent abuse it could be a very interesting game mechanism.
Quote: Item Exchange is used for this currently. Person A needs isk, Person B volunteers to provide some but need collateral. Person A sells something to Person B with the verbal agreement that Person A will buy the stuff back at a later date. No drama.
Yes, despite your earlier claim about trust and the lack of it. Actual contractual agreement >>>>> verbal agreement. With a working loan contract system neither party could take advantage of the situation within what has been decided in the contract prior to agreement. The loanee either pays back and has the collateral returned or doesn't and loses it.
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Alora Venoda
Caldari GalTech Giant Space Amoeba
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Posted - 2008.04.11 19:53:00 -
[19]
you can use a loan contract to "pawn" an item for ISK. yes it can be done using item exchanges but the loan facilitates in 1 what would otherwise require 2 contracts.
to borrow money against some physical collateral (much like loans in real life), you setup a loan contract where you are lending the ship/items and the ISK is the collateral. this is reversed from what you would expect... but if the loan is "failed" then you keep the isk and they keep the ship/items.
if there is an additional ISK payment i guess the payment field on the contract would have to be negative, if that's possible.
~~~~ ~~~~ ~~~~ Take away the risk and it would make flying around in space utterly pointless.
Take away the flying around part and you make EVE into a space themed spreadsheet application. |
Crackzilla
The Shadow Order SMASH Alliance
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Posted - 2008.04.11 20:15:00 -
[20]
Edited by: *****zilla on 11/04/2008 20:22:28
Originally by: Ixianus And you did make a suggestion Mr.Minmatar. You suggested not using the system at all unless you trust the person, which is imo ********
I suggested precisely what is in the CCP description of what a loan contract is and how to use one. I shall next suggest a day when everyone will want to get out of work and go home. I suggest this day be named "Friday".
Originally by: Ixianus
Person A wants 350 million, alright. So they offer 12 units of Punishers, this is clearly insufficient, so the loaner refuses the offer. ... The issue of spam is possible yes, but no more than currently experienced with the contract system/escrow I would imagine.
With an effectively free form system the spam would be highly annoying. With the current contract system someone must have the exact item to complete the process. With a freeform collateral system anyone can offer any item and as many times they want.
There would need to be some sort of fees/isk sink attached to the offer. Otherwise I could offer you the same set of Punishers thousands of times hoping I get lucky and you click on accept. So fees would need to be included. Such as each offer of collateral must include something like a 1% fee of the loan amount.
Originally by: Ixianus
I have toyed with the idea of running a loaning operation / pawn in the past, and with proper tools to prevent abuse it could be a very interesting game mechanism.
Agreed.
However interest is attached to loans to cover both the utility of the money along with risk of losses. There is a difference between low risk and no abuse. If the system cannot be abused this creates a race to the lowest interest rate possible. If I had 100mil that I wasn't using my best action would be to offer it as a loan for 100,000,000.01 isk. Without any risk any competition would be forced to undercut one another. No one makes isk.
Since collateral is required the money supply does not increase. If someone has the assets but not the isk why not sell the items except for when the item is insured?
The loaner must ask for more collateral than the loan is worth to guarantee the loan. Loans would be offered not for the interest but gambling on the loanee to default. The only profit margin would be collecting the collateral and exploiting the price difference between collateral and loan.
Originally by: Ixianus
Yes, despite your earlier claim about trust and the lack of it. Actual contractual agreement >>>>> verbal agreement.
The great part is with Item Exchange the value was determined before hand. There isn't a difference between loan amount and collateral. I'm not loaning 100mil for a bs worth 95mil. I'm not loaning 100mil for a t2 ship worth 105mil. I'm pawning a bs worth 95mil for 95mil and offering to hold the bs for a few days.
The loaner can sell the asset when needed. No trust is needed. If the person doesn't want it back or can't afford it then we've both gotten fair value. Worst case is the loanee has to shop on the market for a replacement. The monetary transaction is atomic and assumes no other actions by the other party.
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hUssmann
Caldari Veto. Veto Corp
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Posted - 2008.04.11 20:25:00 -
[21]
Edited by: hUssmann on 11/04/2008 20:25:37 Stop using the word exploit, you have no idea of it's meaning.
If you're so ignorant as to ignore basic game mechanics and rule 1 of CCP's guide to playing EVE then you deserve to lose every penny.
Originally by: CCP Trust no-one in EVE, Ever.
Ginger Magician > You are merely an effective ganker of haulers who runs at the first sign of combat. |
Gridwalker
Amarr
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Posted - 2008.04.11 20:30:00 -
[22]
Originally by: Ixianus No, I can't read or write. Thankyou for your jackass response. And you did make a suggestion Mr.Minmatar. You suggested not using the system at all unless you trust the person, which is imo ******** when I thought up a better system in 5 seconds.
You're going to need thicker skin if you're going to survive in EVE.
The system you thought up can't work. If you read my post, you would realize that.
All I need to do is accept a loan on an alt, transfer the isk to a completely different account, and then delete the alt.
There is no way to enforce accountability on EVE, or any MMO. You need to treat every interaction as if it is the last time you're ever going to see that person.
Also, keep in mind, scamming IS LEGAL in EVE.
I suggest taking your loss as a learning experience and moving on.
-Grid
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Crackzilla
The Shadow Order SMASH Alliance
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Posted - 2008.04.11 21:28:00 -
[23]
Originally by: Gridwalker The system you thought up can't work.
Well, his suggestion was different from the OP. It would somewhat work but not like he intends.
He wants something where you could offer a bs worth 110mil as a collateral for 100mil. You would receive the isk right away and the bs would disappear into the ether until the isk is paid or the loan defaults. Neither parties would have access to the asset.
If the isk is paid back then the loanee gets the asset back. On defaulting the loaner receives the asset. This part would be enforced similiar to contracts today. Such as Item Exchange trades for one racial freighter in exchange for another.
Of course this leaves open other ways to game the system as we've seen with contracts/trades.
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Ixianus
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Posted - 2008.04.11 21:52:00 -
[24]
Edited by: Ixianus on 11/04/2008 21:53:22
Originally by: Gridwalker
Originally by: Ixianus No, I can't read or write. Thankyou for your jackass response. And you did make a suggestion Mr.Minmatar. You suggested not using the system at all unless you trust the person, which is imo ******** when I thought up a better system in 5 seconds.
You're going to need thicker skin if you're going to survive in EVE.
The system you thought up can't work. If you read my post, you would realize that.
All I need to do is accept a loan on an alt, transfer the isk to a completely different account, and then delete the alt.
There is no way to enforce accountability on EVE, or any MMO. You need to treat every interaction as if it is the last time you're ever going to see that person.
Also, keep in mind, scamming IS LEGAL in EVE.
I suggest taking your loss as a learning experience and moving on.
-Grid
"Did IQs Just Drop Sharply While I Was Away??"
You need to stop trying to act like a tough guy and work on some reading comprehension.
Explain to me exactly how deleting an alt nullifies the collateral thats still suspended in the contract? Ohh, damn, you're smart.
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Ixianus
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Posted - 2008.04.11 21:57:00 -
[25]
Originally by: *****zilla
Of course this leaves open other ways to game the system as we've seen with contracts/trades.
I'm not familiar with exploits regarding this sort of contract system, what could result?
Also how would it work not like I intend?
I'm sure there is some way to do something shady with it, however, aside from the usual scammers trying to offer shuttles for 500million I don't see right away any problems.
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Squirrrel
Gallente Squirrrel Industries
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Posted - 2008.04.11 22:07:00 -
[26]
You should have researched the loan system with much lower sums of isk before entered into it.
Would you enter contracts for serious amounts of money without reading the small print and doing some research in the real world?
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Benco97
Gallente Exchangable Properties
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Posted - 2008.04.11 22:13:00 -
[27]
As far as the ideas go I don't have a clue, as far as the OP goes... well.. you live and learn mate, dont give your money to people you don't know and expect to get anything back, simple as that.
Originally by: Kirjava This man speaks the truth, when he farts we count the length in seconds and make squillions buying winning lottery tickets.
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Joe Starbreaker
Starbreaker Spaceways
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Posted - 2008.04.11 23:30:00 -
[28]
Can you give us the details on how he convinced you to lend him this money, by the way? Like what system were you in, how did he make contact, what did he say? What was the trigger that convinced you to sign on the line?
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Ixianus
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Posted - 2008.04.11 23:50:00 -
[29]
Originally by: Joe Starbreaker Can you give us the details on how he convinced you to lend him this money, by the way? Like what system were you in, how did he make contact, what did he say? What was the trigger that convinced you to sign on the line?
Probably similar to me, trying to be nice.
I've loaned out billions, luckily though I've always had the money returned, or been compensated. Course I don't loan anymore.
But yes, I second, details!
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Crackzilla
The Shadow Order SMASH Alliance
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Posted - 2008.04.12 00:58:00 -
[30]
Originally by: Ixianus Also how would it work not like I intend?
The first issue is that there isn't any pressure to have a high interest rate. If everyone is guaranteed to get their isk back or the collateral and we assume collateral is worth more than the isk then interest rates would fall. Either few would use the system to loan out money as its not worth the hassle or many would and the rate drop would remove profit.
Originally by: Ixianus And as for selling, I could see situations when someone would want to keep the item being offered as collateral rather than selling it and risking prices rising or simply not being able to aquire the item again.
We assume that the interest rates are low and loans are available. Also we assume no games in the difference between collateral price and loan amount. This increases the money supply, leads to speculation, and creates inflation.
Say I have 100mil. I buy a faction item for 100mil. I then use the faction item as collateral for 100mil. I use that isk to buy another faction item for 100mil. Then use that as collateral. Continue until either I reach the maximum numbers of loans my skills allow or the market runs dry. Each loan is for a long period of time.
The good news is that this would increase overall interest rates. The bad news is that I could use this to speculate on the market. This increase inflation. Heres how. I've got several items out of there in limbo. The lender is guaranteed of making the isk back or the item. But what if the item has a different value when the loan is up? This creates not loans but a futures market.
If the item is worth less than the loan I default on the loan. The loaner is stuck with an item worthless post nerf while the lendee has effective locked in the item price for a period. If the item is worth the same than nothing needs to be done. It gets interesting if the item increases in value. It makes the most sense to speculate and this increases prices if production can not keep up.
The saving grace would be demand for loans might prop up the interest rate and the lendee must make enough from speculation to afford the initial cost of the loan. So every attempt the lendee must be willing to effectively pay the interest up front to receive the loan. So for a 100mil loan the lendee pays 5mil up front along with 100mil worth of collateral to receive 100mil isk.
Originally by: Ixianus
The idea of the loan and collateral system works off of the assumption that the person offering up collateral wants their item back, for whatever reason, and doesn't want to risk it being lost on the market or the like.
It isn't rarity that makes collateral work but relative value. Putting up collateral says that if the loan defaults the pie will be sliced up and the lendee will receive whatever is left. Difficult to slice up collateral if lender keeps the item and has no obligations to the lendee.
There are three possible combinations. The first is that the collateral is worth less than the loan. We assume that the loan won't be paid back and so won't be accepted. So we ignore this.
The second possiblity is that the loan amount precisely equals the object value. This arrangement arrangement is fair. The loaner offers 100mil. The lendee offers a bs worth 95mil. The loaner changes offer to match to 95mil. So the system must have some sort of way to strike a deal.
For collateral to work it must be worth equal or more than the loan amount. If it is worth more than its for the lender to gamble that the loan isn't paid back (ie 100mil loan, 110mil collateral, loan defaults, loaner makes 10mil). If you know 100% sure you'll at least make your isk back then you're not making money from interest but from loan defaults.
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