Let's Talk Bitcoin: Interview with Richard Garriott

Discussion in 'General Discussion' started by smack, Feb 22, 2014.

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  1. smack

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  2. Drocis the Devious

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    Wow, I can't imagine Bitcoin being a good idea for anything. It seems like it has some major flaws in its design, and I'd like to think that we have a perfectly good currency system available to us over the next 10 years for Shroud of the Avatar.
     
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  3. Margard

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    Thanks again! and for all future things you post

    This is much appreciated keeps me entertained and away from the pesky forum , you know the open PvP threads :p
     
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  4. smack

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    I really like this quote from the podcast.
    Interestingly for the game I'm working on right now, Shroud of the Avatar, we're slowly turning off -- they're not gone but we're sort of turning off to a large degree both the faucets and the sinks to have more of a fixed monetary policy, more fixed level of currency available in the world.

    Listen to the full interview for the context and how they're going to do that within SotA!
     
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  5. Drocis the Devious

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    I'm just getting to that part of the interview...

    But I wrote about this many months ago, here:

    http://evilgrief.com/2013/08/03/top-5-reasons-not-to-have-a-vendor-based-economy/

    So this is a very interesting interview for me. Plus, Richard is just a really REALLY smart guy.

    Update: Yes, extremely interesting interview. It's almost like RG was reading my blog post. (atleast I'd like to think he was) :)

    One thing that I'm still very uncertain of though is how do they think they're going to add gold or resources to the world of "new players" without the old players having a huge advantage that creates an unfair advantage?
     
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  6. licemeat

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    I'm only 25 minutes in...but I feel like the economy is in good hands. I'm glad to see they won't stop ebay type sales.


    edit --- 17:15 is where he talks about ebay type sales and support
     
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  7. Kal

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    awesome
     
  8. Drocis the Devious

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    So two big takeaways for me involving bitcoins.

    1) The interviewer (about 36 minutes into the program), while explaining that he wanted to give his volunteers a reward but quote "We aren't going to give them real money" explains exactly why bitcoins is not a good idea for almost anyone (and especially a company like Portalarium).

    Bitcoins are not real money. It's something else, and although it has value, it's not very stable.

    2) Which leads me into the next takeaway. Why would anyone want to gamble in anything but the most successful and stable currency in the world? Sure, the US/European economy may crash tomorrow, but is that likely? So for example, does it make sense for Shroud of the Avatar to accept bitcoins as payment for pledges? (because that's probably what most bitcoin supporters would like to see)

    I would say, NOOOOOOOOO. Because Shroud of the Avatar doesn't want to wake up tomorrow and learn that the value of Bitcoins is worth less than what they paid for it.

    Note that I'm not saying Bitcoins won't turn out to be fantastic (anything is possible!). I'm just saying that it's very risky and the idea of accepting bitcoins seems like more of a hedging strategy for people that need non-traditional hedging strategies. Does that sound like Portalarium? I sure hope not.
     
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  9. Jatvardur

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    This is debatable. The price of Bitcoin relative to USD may fluctuate wildly but the functionality of the network is very similar to how it started. Ergo, the "real" value of Bitcoin is unchanged. That said, the hashing rate has increased exponentially. This translates into increased security (some caveats ofc) and also a greater requirement of electrical power. Someone estimated this to be about $15m per day (this naively puts a floor under the price, this can be debated but it is best to read up on it first). Once you understand the fundamentals then you can see why it has many of the necessary similarities to money (economics aside because that is a slightly different issue).

    Comparably, the value of gold doesn't change but the price does. This isn't supposed to be a facetious comment but there is a lot of aversion to Bitcoin without taking the time to properly understand. Krugman being an excellent case in point of sticking his foot in it.

    One thing that would be attractive to me is accepting Bitcoin for in-game items or for selling accounts. If we put aside the moral issues of account selling and look solely at the mechanics then it would be safer to sell for Bitcoin. Unlike with Paypal, the buyer can't renege by insisting that they didn't receive delivery.

    Diversification of income. Doesn't need to be from a hedging angle rather it can be about increasing the demographics of the user base. Bitcoin can be exchanged into most currencies at a fairly low cost (cheaper than a bank or Paypal).

    Marketing: this is potentially a huge angle. There aren't many games accepting Bitcoin and folks are generally looking for more places to spend Bitcoin.

    Another angle is that Bitcoin, and other cryptocurrencies, is like a call option. Downside is limited to what you put in while upside is potentially huge. As Portalarium have already given away Baron and Duke level pledges as rewards (which I actually disagree with) then accepting Bitcoin (with the threat of price going to zero) is only a concern if all of their income comes from Bitcoin. A concern which would need to be re-assessed if it was reality.

    Richard compared Bitcoin to an IPO of a tech startup, which isn't too far off the mark either.
     
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  10. smack

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    There definitely aren't that many games that support Bitcoin yet, and certainly not from a well known publisher or developer. Some of them are definitely exploring this, as is Richard / Portalarium. But there are a few smaller players that are taking the gamble. I think Richard wants to be the first major developer to do so within an MMO (yes, I know...):

    https://twitter.com/RichardGarriott/status/421160311866273792

    I would actually like to see him try and find a way to do it within SotA, if only in a limited way at first.
     
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  11. Drocis the Devious

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    Jatvardur, you as a Bitcoin supporter can already use bitcoins with anyone willing to take the same risks as you. So you could buy whatever pledges or add on store stuff you felt you wanted to purchase, you'd just have to have an intermediary. If it's easy to do and there's no risk, then it wouldn't be a problem.

    I would not want Portalarium to take those risks however because it's not easy and there is considerable risk. It's really a very simple business case as to why companies that use bitcoins are playing with fire. Yes, fire is a very powerful tool, but I don't want this game to get burned - especially while my money is trapped inside it. :)
     
  12. vjek

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    44:53 " ... I'm confident we will ultimately take bitcoins within the game itself. "

    If any of the economic theories, policies, or designs described in this interview are going to be applied to SotA, that would be news.
    My personal impression of RG's attitude towards RMT is that he's very much pro-RMT.
    And yet, he describes a closed monetary pool, vaguely, for SotA, but mentions Portalarium will add money when new players are added to the game.
    And still, they refuse (the dev team opted-out from answering it here) to answer one simple question:
    Is it currently a design goal that players will be able to purchase in-game currency with real-life cash/money, directly from Portalarium?

    Personally, I'd rather see a primarily resource based economy to match a primarily crafter-driven economy. Seems like a better path, versus a closed monetary pool. Given they haven't even given us a list of hypothetical/logical faucets or sinks, so far, I still have that ominous feeling for the SotA economy.

    I heard nothing from the interview which raises my confidence in having a fun, challenging, rewarding, innovative and RMT-free persistent multi-player online experience, for SotA.
     
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  13. Kal

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    he said they will allow people to sell items on ebay and other such sites. this is great for player freedom. he said he expects and hopes that it will happen. just start listening around the 16:30 minute mark.
     
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  14. Jatvardur

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    With all respect, I disagree on the first and would accept the latter as taste.

    it is very easy to trade Bitcoins and has many in-built protection mechanisms (prevention of double spending / duping).

    In terms of risk I'd accept that the prices are volatile, and so that is often unattractive to many people. Especially from a business perspective, volatility in income is not desirable. While I could be cute and link volatile income to anti-fragility that could be bordering on facetious for too many. ;-) Given the potential high returns (uncomputable) I think they could accept this as a loss leader; I think they could write off the risk as a marketing gimmick. I am assuming that this is a small fraction of their total income, if it was otherwise then yes I'd be looking for them to de-risk (depending on the landscape at such a time).
     
  15. HoustonDragon

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    There are so many risks and fluctuations concerning Bitcoins and their values, that I personally hope they do not risk SotA's current stability by becoming involved with their trade. There are also some fairly nefarious transactions associated with their trading schemes, including some of which fall under criminal jurisdiction and potential prosecution.

    It doesn't make sense to risk trading a currency that could potentially end up completely devalued or even forcibly seized under laundering statues due to connections to other markets. There are so many legitimate, reputable, and available digital methods of transaction payments, that this one seems a little redundant.
     
  16. Jatvardur

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    Have you compared the aggregate value of all criminal activity transacted in US Dollars versus Bitcoin?



    It can't seized in a conventional sense. Again, as I said to Bedear, you need a better understanding of the fundamentals to see why some of this is naive. Until you have any statement is going to be ignorant (I say that in a technical sense).
     
  17. Drocis the Devious

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    When bitcoin makes and enforces their own laws, you'll have a very good point here. ;)


    I believe Houston Dragon is correct that anti-money laundering laws and regulations would allow for seizure of funds. The "technical" exactness of this is arbitrary in these forums. I could post all kinds of related links where people with bitcoins (buyers and sellers) have been hauled into court under related issues (bitcoins forfeit).

    I'm not trying to pick a bitcoin fight here, the viability of bitcoins seems arguable on both sides to me. However, the point I think that both Houston and I are making is that it's not wise to "risk it" from Portalarium point of view. As you yourself said, and I'm paraphrasing here...the real risk would be in taking in too many bitcoins. I agree. So it would really just be a marketing scheme (and maybe a good one) if they ever supported bitcoins. But WHAT IF some giant drug lord decides that the market for SotA is ripe to move funds through bitcoins and back out through ebay (for example)?

    Would the small positive marketing impact of using bitcoins ever outweigh that risk? NO.
     
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  18. Akeashar

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    The US Government has already done seizures of Bitcoins in relation to criminal activity. See what happened when the Silk Road went down.
     
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  19. Jatvardur

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    All the enforcement agencies already know about it. Credit cards have agreements but they rely upon the laws of the land for enforcement. Bitcoin could (in theory) be no different. Given its relatively youth age this remains to be seen how far it will be supported. German courts have already ruled in favour of Bitcoin being money. The UK tax agency had a plan but they are currently re-evaluating.

    Bitcoin isn't regulated in the traditional sense which was ultimately the point of it. But that doesn't mean that governments don't regulate people.



    The Madoff ponzi scheme cost investors (on aggregate) $18bn. That is US Dollars and that's only one example which is greater than the entire market capitalization of Bitcoin. I think we need some perspective here without the scaremongering.

    I respect you as a poster on these forums, I can see that you're a smart guy. My criticism shouldn't be taken personally (just in case you thought it was) but I think there is a chasm of knowledge that needs to be filled.

    Indeed. If / when the time comes. I can't say what the value of Bitcoin will be on that day, nor can I say how well supported it will be by world governments but I'd hope that RG responds in a way which is consistent with the exposure accepted and shows some management of risk. That said, I'd still fully understood if he made mistakes.

    I think we need to get a bet going here. Hmmm, something like: 100,000 gold to the winner if Bitcoin brings in at least X number of players (or fails to bring in), plus Y amount of equivalent pledge dollars, 12 months after officially being accepted on the main SOTA website.


    That would put some skin in the game. ;-)

    They could do that anyway using dollars. I'm not saying that is an attractive prospect, but if you have houses trading for thousands of dollars then I'm sure it has to attract potential money launders anyway. I don't know what the exact rules are here for MMOS and KYC / AML. Anyone with any info on that?

    I don't think I can offer a proof to the contrary, so I accept that as you position and suggest we make a bet. ;-)
     
  20. Jatvardur

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    They have seized his computers, yes, but that isn't meaningful in and of itself. They need the password to his wallets and it isn't entirely clear to me that they actually have access to his wallets.

    I'm going from memory and a quick scan of wikipedia. If I'm wrong on this then please post.
     
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