The economy of a Minecraft world is pretty fascinating because everything about the world is fabricated players using resources mined from the same world, a feature not present in most games. There are no swords that enter the marketplace through some simulated marketplace, and there isn’t a strong need for such a thing either. Recently, I wrote about an hour’s worth of code for my small Minecraft server in order to allow players to setup shops from chests they owned. They’d place their items to sell in the chest and put a sign above declaring what they’d give for what they’d take. It made trading much easier and an entire trading district blossomed overnight (literally). Because each chest store could only sell up to two items (because two signs can fit above a double-width chest) and each chest took up physical space, it meant that there was a need for players to construct buildings (perhaps large in some cases) for their store. As there was not a “global” market that you could access from any in-game location, that meant that factors that you’d find in the real world such as location had an effect (it’s potentially profitable to start up a series of remote outposts to sell food and arrows). The area of the town at spawn doubled that day.

A shop with in stock and out of stock chests

But there was no currency. I deliberately avoided establishing currency because a number of friends were adamant about not having one, but their disdain for currency isn’t unreasonable. I’ve been around and how “economy” works on many Minecraft servers (as well as other in other games) is through a combination of periodical welfare payments, game-powered shops with rates set by the game, and in the case of roleplay servers, virtual employment. In the case of the shops, rates for multiple items were set by the server owner manually or through a list of item rarities (generated by finding the distribution of materials in a given world). I find the latter particularly farcical – value is very much not simply determined by rarity. On more than a few servers, it seemed as if everyone’s business was to farm sugar cane en-masse – and it worked, because sugar cane as bought by the server’s shops at a fixed price. I didn’t want that and I got the feeling that my server’s players didn’t want it either.

There was, of course, another choice – have algorithms dictate the exchange rate based on the volume of trades by players. A player had suggested this as well, but that meant that I’d have to dedicate time to researching and tweaking the algorithm (although the player said he had some experience with this), plus it’d be open to market manipulation due to the small volume of trades that happens when you only have a smaller server. If I made an error, it could significantly tip the balance the wrong way and I’d have to deal with the aftermath (and after taking a one or two week leave, as it tends to happen). Instead of all of this, I was anticipating that a currency might develop on its own (commodity money). Two different groups of people did setup currency exchanges, but their exchange ratios were not properly fair. One diamond-for-gold exchange ran out of diamond in an hour because the diamond was too cheap for the amount of gold. Beyond that, there wasn’t enough trust to be had for the exchanges and they didn’t catch on.

While bartering has been enjoyable, trading can be challenging because you may not have the item the seller seeks, and you’re also encouraged to delay trade until the real necessity arises. With bartering, some items are impossible to sell because the effort involved in trading for them (and calculating the right barter ratio) is significantly greater than crafting the item themselves, even if prices are as low as you can go. That leaves us with need for an official currency, and probably one that’s driven by money a la a credit card (to lubricate the process even further). We spent a bit of time discussing what to do about that, and I had considered giving everyone a set amount of credits (perhaps 10,000 per head) – something that I can do because it’s a computer game – but I think the currency would never come into use nor stabilize. What we probably will do is setup a certain number of one resource for a certain amount of money at a game-controlled exchange. It’d be a fixed currency backed by gold or something, mostly likely to be something like iron ingots or gold ingots. It seems no one wants fractions either (although decimals is merely a representation), so we’re thinking about having the exchange rate at a large whole number such as $32 for an iron ingot. It has to be high enough to make it possible to trade lower-value items – a great analogy for that, as a friend said, is if the lowest currency denomination suddenly had to be $20 USD, you could no longer trade a large number of objects unless it was in excessive bulk quantities. Another friend suggested using factors of $8, because most items have a stack size that’s 64 or a multiple of 8 – that’s an interesting idea. The question also arises whether we’d want a floating exchange rate in the future too.

One of the currency exchanges

Someone abusing the in-game 'tablet' image board app to advertise

Overall it’s been pretty fun trying to stimulate trade and there has been many analogies to history and real life. Because new versions of Minecraft also continue to come out, the value of items can change. Gold’s value may change in v1.9 because of new items added, and one could currently move money into or out of gold ingots in anticipation, depending on how they expect the value of gold to trend. There’s also been some clever people really working the market (perhaps quite in an evil manner), by, for example, buying out a shop and reselling  with higher markup. Some of the guys on there are younger too, and some of them have really sharpened lately.