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Utemetsu
27
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Posted - 2012.03.19 14:02:00 -
[121] - Quote
What EVE Currently lacks isn't oversight. It isn't hard-coded mechanics or a lack of GM enforcement of 'good practices' as we see in other MMOs.
What's required for a banking sector (and really, any large-scale financing sector) is an efficient and transparent way of managing risk. Hexxx himself has said that EVE is a game of 'risk management' not 'trust management'. The bottom line in the real world is that you put your trust in the government that it won't collapse, in the banks that they'll give you the money you ask for when you ask for it, and that the system works.
I could see an FDIC type organization going up in tandem with a banking sector -- an additional entity which serves as an 'insurer' to banks and their clients' accounts (presumably up to a certain amount). Audit this thing frequently, and it should work as intended -- should any banking entity implode on itself either through financial mismanagement, or from a player 'cashing out' those deposits would be insured (again, up to a certain amount) by the insurer.
Moreover, such an entity would serve as a risk mitigator -- more banks would open, and it would even behoove the players themselves to open multiple accounts across a few banks in order to keep as much of their ISK 'insured' as possible.
To reiterate -- EVE's banking sector needs a depositor protection foundation to mitigate risk.
Eve Morning Report - Daily Economic News of New Eden
www.evemorningreport.themumm.com
"I almost pooped my pants." ~ Lord Jita
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Darth Tickles
Northstar Cabal
Fatal Ascension
87
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Posted - 2012.03.19 14:14:00 -
[122] - Quote
Where exactly does the mitigation of risk come from by adding another equivalent point of failure? |
Utemetsu
27
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Posted - 2012.03.19 14:24:00 -
[123] - Quote
Darth Tickles wrote:Where exactly does the mitigation of risk come from by adding another equivalent point of failure?
It removes it entirely from the banking process. With frequent audits and oversight from trusted third parties, it serves as a pool which the banks 'buy into'. The individual depositor would not be interracting with the insurer, but the bank itself would be. The risk is then on the bank, not the depositor. It is in the Bank's best interest to be insured, as depositors wouldn't otherwise deposit without financial insurance (so-to-speak). Combined with the bank's own reserve of 'run money', risk is minimal, especially at smaller ISK amounts.
Even in the real world, there are plenty of points of failure, and when you notice your money is a fiat currency, the first point of failure is right there in your wallet. The trick is transparency and oversight. Since CCP is out of the question in terms of oversight, you turn to trusted third parties.
Eve Morning Report - Daily Economic News of New Eden
www.evemorningreport.themumm.com
"I almost pooped my pants." ~ Lord Jita
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Kara Roideater
Perkone
Caldari State
33
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Posted - 2012.03.19 14:30:00 -
[124] - Quote
Utemetsu wrote:Since CCP is out of the question in terms of oversight, you turn to trusted third parties.
Like Cosmoray, Bad Bobby and the chaps who set up EBANK and ran it so flawlessly? I can see this working. 
Edit - Apologies for the slightly snarky comment. I couldn't resist! But Darth Tickles is definitely right on this, you're talking about relying on additional layers of the already problematic current system.
Wish I could stay engaged with this thread as it is an interesting one (despite my view that banks in eve serve no useful purpose, fail to provide decent business models, and introduce risks that are more easily mitigated within smaller ventures). Unfortunately, work calls but I look forward to reading the rest in a few days. |
Mara Villoso
Big Box
63
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Posted - 2012.03.19 14:49:00 -
[125] - Quote
Hexxx wrote:Mara Villoso wrote:Sentence preceding the one quoted in the OP:
"The velocity of money falls steeply and steadily from the start of the graph, January 2007, until late 2008. This is happening at a time when the money supply was growing. "
When did EBank run? Oh yes, between 2007 and mid-2009.
Funny. I'm of a mind that causation and correlation are two different sorts of things. Personal opinion however. 
My point being, there was a bank and it did nothing to solve the purported problem. It also calls into question the original assumptions and conclusions in the devblog, namely, that there was no banking sector. Having a bank didn't solve the problem. So I don't see how 'banks we need them.' Banks we had them. The banks they do nothing. |
Adunh Slavy
Ammatar Trade Syndicate
353
|
Posted - 2012.03.19 14:54:00 -
[126] - Quote
I do believe you've got it. :)
I'm unsure of a lot of it too, there would be a lot of details and procedural things to work out, not to mention the code, the web server and all of the RL implications of that to deal with as well.
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Darth Tickles
Northstar Cabal
Fatal Ascension
88
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Posted - 2012.03.19 14:55:00 -
[127] - Quote
Right, so not only do I have to worry about my bank running away with my money, now my bank has to worry about his bank running away with his (my) money.
What you guys don't grasp here is that you're working against an inherent tendency towards disorder in these artificial and foundationless institutions that you're imagining. Inherent in every "check and balance" you're imagining is a human point of failure, whether that's planned dishonesty, incompetence, negligence, burnout, ennui, real-life demands...the list truly goes on and on. Complex institutions work in real life because we organically develop social and legal systems of incentives, the allocation of rewards and punishments.
For all the potentialities inherent in the entire Eve market, all that wealth and productive potential you guys hope to engineer organizations to unleash and capture, you can't currently create the incentive for one auditor, VV does it voluntarily. Why? Because after the first few days, playing space bureaucrat #473 is ******* boring as snot and financially unrewarding.
If you want to engineer interesting new things in this game (and I am all for that, I have seen some amazing ideas in my time following this forum), then you need to look at the basic mechanics that you have to work with, not try and transplant the form of real life organizations without understanding their basic function and how they organically developed from those basic functions to take on the structural form you see today.
Anything that isn't based on a realistic appraisal of the limits of incentives in Eve interactions is doomed to hilarious and catastrophic failure, and the more complex and grandiose the structure you attempt to create, the more hilarious and catastrophic that failure.
The interesting thing about hex is he knows this, though I'm not sure if this is consciously or subconsciously. He knows that these imaginings won't exist for a second based on their inherent interactive qualities, so he has to create an excitement surrounding them, and that excitement is based on this ill-conceived notion of transplanting form and structure "whole-hog" from the real world. Unfortunately, when the excitement wears off, and the cruel realities of inherently illogical space bureaucracies kick in, he's long gone, and it's everyone else left cleaning up the mess. |
Kara Roideater
Perkone
Caldari State
33
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Posted - 2012.03.19 14:58:00 -
[128] - Quote
Hexxx wrote:Mara Villoso wrote:Sentence preceding the one quoted in the OP:
"The velocity of money falls steeply and steadily from the start of the graph, January 2007, until late 2008. This is happening at a time when the money supply was growing. "
When did EBank run? Oh yes, between 2007 and mid-2009.
Funny. I'm of a mind that causation and correlation are two different sorts of things. Personal opinion however.
Ok, one last point because I'm an addict ...
Causation and correlation are certainly different but in this case there is at least an identifiable correlation. In the case of the supposed effect of banks not even a correlation can be identified as evidence that having banks will do what you claim. Obviously, this is by no means definitive but it does suggest that some explanation is necessary, at the very least.
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Adunh Slavy
Ammatar Trade Syndicate
353
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Posted - 2012.03.19 15:00:00 -
[129] - Quote
Darth Tickles wrote:
Reality
I'm in it for the discussion, it's fun. Don't harm my fun with your dose of reality please! :) |
Darth Tickles
Northstar Cabal
Fatal Ascension
89
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Posted - 2012.03.19 15:10:00 -
[130] - Quote
Adunh Slavy wrote:I'm in it for the discussion, it's fun. Don't harm my fun with your dose of reality please! :)
Absolutely. I have no problem with people talking about how they'd like to have flying purple unicorns. My concern is this conversation is dangerously close to people trying to ride said unicorns.
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Utemetsu
28
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Posted - 2012.03.19 15:22:00 -
[131] - Quote
Darth Tickles wrote:Right, so not only do I have to worry about my bank running away with my money, now my bank has to worry about his bank running away with his (my) money.
Where do you think Banks get their money?
 IMF
Federal Reserve
Eve Morning Report - Daily Economic News of New Eden
www.evemorningreport.themumm.com
"I almost pooped my pants." ~ Lord Jita
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Jake Andarius
Andarius Trading Corp.
8
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Posted - 2012.03.19 15:24:00 -
[132] - Quote
Darth Tickles wrote: Absolutely. I have no problem with people talking about how they'd like to have flying purple unicorns. My concern is this conversation is dangerously close to people trying to ride said unicorns.
While exceedingly cleverly written, the idea behind your response misses the point. Idealistic discussions are not used in order to substantiate those theories directly in reality. They are instead the driving force behind finding practical, realistic, and workable innovations that make the world around us a better place.
Andarius Trading Corp. |
Darth Tickles
Northstar Cabal
Fatal Ascension
89
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Posted - 2012.03.19 15:30:00 -
[133] - Quote
Utemetsu wrote:Where do you think Banks get their money? IMF Federal Reserve
Nonresponsive.
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Darth Tickles
Northstar Cabal
Fatal Ascension
89
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Posted - 2012.03.19 15:32:00 -
[134] - Quote
Jake Andarius wrote:While exceedingly cleverly written, the idea behind your response misses the point. Idealistic discussions are not used in order to substantiate those theories directly in reality. They are instead the driving force used to find practical, realistic, and workable innovations that make the world around us a better place.
Ok, when you guys think you've remotely entered the realm of the "practical, realistic, and workable innovation" be sure to let us know.
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Adunh Slavy
Ammatar Trade Syndicate
353
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Posted - 2012.03.19 15:33:00 -
[135] - Quote
Darth Tickles wrote:Right, so not only do I have to worry about my bank running away with my money, now my bank has to worry about his bank running away with his (my) money.
If you are refrencing the idea I've been discussing, the Clearing House, then this is not correct.
The Clearing House would only be holding enough ISK to balance accounts for the duration of a given settlement period. By the end of the settlment period, the House should not be holding any ISK on behalf of any one.
If you're refrencing the idea above where someone mentioned the FDIC, then I agree, that's not a very good idea as it creates too much moral hazard IMO. |
Utemetsu
28
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Posted - 2012.03.19 15:33:00 -
[136] - Quote
Darth Tickles wrote:Utemetsu wrote:Where do you think Banks get their money? IMF Federal Reserve Nonresponsive.
Not sure why you think it's nonresponsive.
Eve Morning Report - Daily Economic News of New Eden
www.evemorningreport.themumm.com
"I almost pooped my pants." ~ Lord Jita
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Darth Tickles
Northstar Cabal
Fatal Ascension
89
|
Posted - 2012.03.19 15:41:00 -
[137] - Quote
Adunh Slavy wrote:If you are refrencing the idea I've been discussing, the Clearing House, then this is not correct.
The Clearing House would only be holding enough ISK to balance accounts for the duration of a given settlement period.
Then it's the same, another equivalent point of failure.
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Darth Tickles
Northstar Cabal
Fatal Ascension
89
|
Posted - 2012.03.19 15:41:00 -
[138] - Quote
Utemetsu wrote:Not sure why you think it's nonresponsive.
Then I'm afraid I can't help you.
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Jake Andarius
Andarius Trading Corp.
9
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Posted - 2012.03.19 15:49:00 -
[139] - Quote
Utemetsu wrote:Where do you think Banks get their money? IMF Federal Reserve
Unfortunately, no central bank in the traditional sense could be introduced to EVE without CCP hard-coding it in.
Central banks (Federal Reserve, Bank of England, etc.) are the origins of all money that enters their respective economies. Usually this process is heavily regulated in a way that limits the amount of currency creation so inflation does not occur. But the point is that, in times of crisis, a central bank can in fact create money out of nothing and loan it to a private commercial bank that might have otherwise failed because of a lack of liquidity for debt obligations.
Unless something seriously changes in the EVE universe, CCP is not going to hand over to the players the capability to directly create money.
(Darth Tickles: If you look over this forum thread, I believe I have shot down a lot of suggestions that are unrealistic and held up the realistic suggestions that could not only improve the game, but could be executed fairly easily.)
Andarius Trading Corp. |
Darth Tickles
Northstar Cabal
Fatal Ascension
89
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Posted - 2012.03.19 16:01:00 -
[140] - Quote
Jake Andarius wrote:(Darth Tickles: If you look over this forum thread, I believe I have shot down a lot of suggestions that are unrealistic and held up the realistic suggestions that could not only improve the game, but could be executed fairly easily.)
No, you haven't. The entire discussion is so disconnected from the relevant underlying realities that it is merely whimsy, the proverbial "flying purple unicorn". That you believe otherwise just shows how badly this thread does need the "cold shower" it is receiving.
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Jake Andarius
Andarius Trading Corp.
9
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Posted - 2012.03.19 16:27:00 -
[141] - Quote
Darth Tickles wrote:Jake Andarius wrote:(Darth Tickles: If you look over this forum thread, I believe I have shot down a lot of suggestions that are unrealistic and held up the realistic suggestions that could not only improve the game, but could be executed fairly easily.) No, you haven't. The entire discussion is so disconnected from the relevant underlying realities that it is merely whimsy, the proverbial "flying purple unicorn". That you believe otherwise just shows how badly this thread does need the "cold shower" it is receiving.
Good ideas
- Black booking to provide a public list of scammers - It is as easy as creating a forum post, listing names of players, and getting feedback from other players to update it. I actually have recently started to maintain a "white list," because, if you are going to invest, it is incredibly useful to know the investment history of your options. (Akeirah)
- Promote only decentralized, diversified investments - If a corporation is starting to control large amounts of ISK by itself, avoid that corporation. Find a smaller place to invest your ISK if you choose to do so. (Adunh Slavy)
- Auditing corporation - The creation of a regulatory group that audits, rates, and places caps on overall deposits of all participating investment opportunities would be a fantastic idea. This would put some pressure on bonds or other investment groups that do not have the wallet history evidence to support their claims. (Adunh Slavy)
- Collateralized loans - This has already been implemented by a number of people, but it bears repeating. Collateralized loans are a really solid way for investment structures to function. (Darth Tickles)
- Anti-scam opt-in option for accounts - This idea does require CCP hardcoding something, but it would be relatively simple flag. The difficulty would be for CCP GMs to deal with the scams that did eventually occur once an account is flagged. But even that is not an incredibly unrealistic proposition. All other MMOs on the market have that as a standard. If players really wanted it as a whole, CCP would implement it. (Vaerah Vahrokha)
- Insurance - This idea seems to be in its development stages right now, but it shows a lot of promise. The general premise of risk diversification is extremely solid. (Hexxx, Utemetsu)
Bad ideas
- Corps that handle large ISK flow to other corps - This creates a huge, unnecessary risk. If that one corporation fails, it can take with it a large amount of the ISK of all those corporations.
- Central banking to provide loans to banks in liquidity trouble - It requires CCP hard-coding and handing over ISK creation to the players.
- Most New EVE Software Features - Most things in general that requires CCP hardcoding new features to the game are very difficult to achieve, because it takes a lot of player pressure to get any one specific design feature implemented.
- Commercial Bank Money - This idea works in the real world, but I think it would be a step backward in terms of functionality from what already exists in EVE.
These ideas are merely the ones for actually improving EVE, and I probably missed a couple as I just compiled this list in a few minutes. In addition, there was a lot of discussion of economic theory, which educates everyone as to how exactly the economy functions.
Andarius Trading Corp. |
Kara Roideater
Perkone
Caldari State
33
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Posted - 2012.03.19 16:37:00 -
[142] - Quote
Jake, in order for Darth to understand that you have shot down an idea you must also insult the person who forwarded said idea. Strange, I know, but it's just how his hearing works.
Seriously, though, it is well worth remembering how badly wrong banks have gone in the past and dwelling continuously on the negative aspects. What is missing is any good justification for their existence (contra the premise of this thread) and whilst abstract discussions are certainly interesting and of considerable value in and of themselves, so far as they appear to be validating the central premise of the OP they can be potentially dangerous themselves. So, a modicum of name-calling might be necessary just to clearly frame the evolution of the discussion. Taking the list you just gave, there is obviously nothing there that suggests there is any need at all for banks in eve and it is well-worth making that point emphatically since it might escape the notice of a casual reader who sees only detailed discussion of how banks might, hypothetically, work.
Edit - Also, 5 and 6 on your pro list are baaad ideas
Edit2 - To expand on that last point, 5 would effectively remove scamming as no one would deal with non anti-scam accounts (no rational actor anyway). 6 requires a set up something like a bank and suffers from all the weaknesses. There is also, by Hexxx's testament, insufficient demand for it within a framework that would not be guaranteed to lose money. |
Adunh Slavy
Ammatar Trade Syndicate
356
|
Posted - 2012.03.19 16:38:00 -
[143] - Quote
Jake Andarius wrote:[quote=Utemetsu]Where do you think Banks get their money?
Central banks (Federal Reserve, Bank of England, etc.) are the origins of all money that enters their respective economies. Usually this process is heavily regulated in a way that limits the amount of currency creation so inflation does not occur. But the point is that, in times of crisis, a central bank can in fact create money out of nothing and loan it to a private commercial bank that might have otherwise failed because of a lack of liquidity for debt obligations.
This is a side comment, I don't want to derail the thread, but Modern Central Banks, with Fiat Debt money can do nothing but inflate the money supply. Can go to out of pod if we want to go into that more. |
Darth Tickles
Northstar Cabal
Fatal Ascension
90
|
Posted - 2012.03.19 16:39:00 -
[144] - Quote
ROFL
those are all terrible ideas except #4
they betray both a juvenile understanding of the nature of interactions in Eve and complete lack of awareness of what has been tried before in terms of financial institutions
i'll spend my lunch hour banging something quick out for you guys, so you have the option of expending your commendable enthusiasm on something remotely useful that is grounded in actual knowledge about the nature and history of financial institutions in eve
whether you choose to take advantage of that and actually try to innovate or just continue to circle jerk each other about purple unicorns is your call |
Jake Andarius
Andarius Trading Corp.
9
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Posted - 2012.03.19 16:42:00 -
[145] - Quote
Darth Tickles wrote:those are all terrible ideas except #4
I think I love you just for that quote. Really. That just made my day.
Andarius Trading Corp. |
Darth Tickles
Northstar Cabal
Fatal Ascension
90
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Posted - 2012.03.19 16:44:00 -
[146] - Quote
Kara Roideater wrote:Jake, in order for Darth to understand that you have shot down an idea you must also insult the person who forwarded said idea. Strange, I know, but it's just how his hearing works.
Hey, I've been nice.
If this was just the dynamic duo of hex and secnes, where i think there is no hope of anything positive ever emerging, i'd just be slamming cocks in doors with my usual charm and panache.
If these are just eager young minds pointing in the wrong direction, then i'll take an hour of my life and try and change their minds for the better
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Kara Roideater
Perkone
Caldari State
33
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Posted - 2012.03.19 16:50:00 -
[147] - Quote
Darth Tickles wrote:ROFL
those are all terrible ideas except #4
they betray both a juvenile understanding of the nature of interactions in Eve and complete lack of awareness of what has been tried before in terms of financial institutions
i'll spend my lunch hour banging something quick out for you guys, so you have the option of expending your commendable enthusiasm on something remotely useful that is grounded in actual knowledge about the nature and history of financial institutions in eve
whether you choose to take advantage of that and actually try to innovate or just continue to circle jerk each other about purple unicorns is your call
1 is a terrible idea? Seriously, a player maintained public list of scammers is a terrible idea? I think you may have slid into the realms of rhetoric in pursuit of your otherwise valid central point.
Just drop the name-calling and aggressive flourishes, eh?
Edit - Just saw your post above. fair enough but try to play nice! |
Adunh Slavy
Ammatar Trade Syndicate
357
|
Posted - 2012.03.19 16:51:00 -
[148] - Quote
Jake Andarius wrote:
Most New EVE Software Features - Most things in general that requires CCP hardcoding new features to the game are very difficult to achieve, because it takes a lot of player pressure to get any one specific design feature implemented.
IMO, this is the only thing that will get anything serious off the ground, and although rather crude and crass about it, Darth is correct that what we discuss will likely never happen.
That however does not discount the usefulness of the academic hypothetical debate. May not be very useful for Eve, but provides entertainment. So I hope when and if any purple unicorns do come, puns intended, their horns and other phallic like appendages are pointed in the proper directions. ;) |
Darth Tickles
Northstar Cabal
Fatal Ascension
90
|
Posted - 2012.03.19 16:54:00 -
[149] - Quote
Kara Roideater wrote:I think you may have slid into the realms of rhetoric
I never left. I don't hold subscribe to any code of behaviour in the pursuit of ultimate truth, all I care about is achieving functional results with the least untruths possible given the relative importance of the subject
dont try and box me in maaaaaaan |
Utemetsu
28
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Posted - 2012.03.19 16:54:00 -
[150] - Quote
Darth --
Before this thread heads the way of the red herring, I just wanted to make a couple of personal opinions regarding the conceptual idea of a bank with regards to your comments:
Any time you invest ISK in anything (ships, bonds, IPOS, loans, banks) you are taking a risk. As is typical in eve, potential reward scales with the risk involved. Your 2.5 billion Tengu CAN net you some nice killmails, or a steady stream of bounty income. The risk associated with any purchase made is entirely dependant on two things:
A) Your willingness to take the risk
B) Other player's motives
It's on B where most of the 'tepidity' of your response to the idea of a Bank. EBANK ran fine until one player's motives changed, taking the money, and leaving the institute to implode in on itself. If that had not happened, and assuming that another player wouldn't have taken that place at a later date I think EBANK would still be around. The plain and simple truth is this: It's business model worked.
Collosal amounts of Risk are taken every day in every corner of the galaxy. Every time a corp hires a new player to join their ranks, they are taking the risk that they are a spy, one of which could comprise an entire coalition (with asset values far exceeding anything that a single, bank entity could hope to amass).
What reasonable security measures are in place now protecting bond-fillers and investors of other ilk? The answer: None. But people STILL continue to maintain a healthy bond and loan market DESPITE the complete lack of 'insurance' (for lack of a better term) on said investments.
I'd say your purple-flying-unicorn exists already in that form, moreover, I'd go to say that that unicorn isn't large enough as it is.
Despite a massive amount of ISK existing within EVE, how often that ISK is moved (e.g. it's velocity) has remained stable. A bank could facilitate a very healthy amount of monetary velocity through deposits and withdrawals alone, putting aside any potential investments that It could make with it's available funds.
Eve Morning Report - Daily Economic News of New Eden
www.evemorningreport.themumm.com
"I almost pooped my pants." ~ Lord Jita
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