Why 15 silver?

[Ary Endleg]

I would like to know why is exchange ratio 15 silver for 1 gold?

 

Is there some sort of stabilizing factor for that ratio? I personally don't see it, since both are used only for purpose of exchange.

Is there some indicator of amount of each type of coins in circulation so that it would have ratio of 15:1?

OR

Is this just community's stubbornness or will to have solid exchange ratio backed up by nothing that would justify it's agreed value? After all there if it has firm unchangeable ratio of exchange, then both coins will have same buying power even though one type might be easier to come by than the other. This would result in specific people getting upper hand in buying power by working with coins that are "in favor" due to improper rate of exchange. Moreover circulation amount is interchangeable due to the way coins are "minted" from the shop, there are no guarantees that ratio of circulation will be stable ever, so why is the price stable?

 

In simple words, if it's easier to obtain 1 gold rather 15 silver, then due to that exchange ratio one can profit in buying power because said person can always aim to obtain favored mintage over unfavored one. Hence taking lower effort/expense to obtain same gain.

 

Once again I don't know IF or which coin type is/should-be favored, but current way of how market works alone makes no sense to me because I fail to see what exactly is stabilizing this exchange price. Somebody point it out for me. If there isn't such thing then my speculation above is correct.

[Eara Meraia]

the way I see it - the only currency in MD is gold actually (and I don't see the need to have more to be honest). The only reason why silver needs to exist is - because some things are worth less then 1 gold and you get in trouble if you have only gold. Unless you want to devaluate gold to the level of silver you need something smaller to split gold up. Exactly the same thing with RL currencies - 1$ = 100cent because community agreed that it is practical. They could also have agreed on 1$ = 15 cent. I don't see gold and silver like $ and euro and I think it is good. Personally I dislike all market manipulations with money and I don't wish any preferances of values for MD.

 

So you make an exchange from gold to silver if you want to buy 1 bone from me (lets say 1 bone costs 1 silver coin in my understanding) and you assume that I will have trouble to give you the change. This function is fully enough for me to justify the existance of gold and silver.

 

Does it make sense for you, Ary?

[Chewett]

A number of "Gold Certificates" are currently valued at 1 gold OR 15 silver.

 

However I am currently unsure if these came before the standardization of 15 silver = 1 gold. I believe they came after.

[Ary Endleg]

Even if you put it that way, as smaller part of same currency rather than different currencies, question still stands, why 15 silver for 1 gold?

 

I see it specifically as conspiracy because of current ratio. It's historically famous gold to silver ratio.

 

You also have to take into account that in history there weren't currencies, rather there were valuables and since in differently sized markets as well as it's ever changing nature meant that they were valued differently all the time. That's why you can call them "currencies". Most games today employ such concept where silver is just part of gold piece, I don't really think it's the case in MD although it seems that way, it actually isn't because community has power to enforce the value and there are no official channels or anything solid to maintain that ratio other than community itself. Even with gold certificates, ratio can't be stable.

 

So really which is it? Freedom of price or developer's firm support of price?

[Chewett]

There have been cases where a seller has stated that X silver is worth less than the conventional gold price, but these are few and far between.

 

Its just been a number we have stuck by and used for many years now, to the point where official auctions also state that the transfer rate for this auction is 15 silver = 1 gold. (just remembered this).

 

I cant remember how it came about, but its now been a standard so long people use it without question.

[DARK DEMON]

This is like asking why a dollar is 100 cents :P

[Burns]

It actually isn't, a dollar is 100 cents because somewhere, sometime, somebody put down a law stating that it works that way. They built their dollar out of nowhere, and had the wits to not use some strange weirdo system like this feet-yard-mile business, but a proper decimal system.

 

I trust you did your research and already know of this post for theory http://magicduel.invisionzone.com/topic/3795-the-exact-price-of-1-silver-coin/#entry29515

 

The rate of 15:1 just got accepted as a going rate when the first gold to silver trades were made, because gold coins were basically untradeable on their own. If you want to 'calculate' a fair rate, i think it'd work to check how much money (on average) you need to put in a branch to reach a gold, and how much silver you can get for the same amount of money.

[No one]

As Chewett stated, it just stick to this value.

A number of "Gold Certificates" are currently valued at 1 gold OR 15 silver.

 

However I am currently unsure if these came before the standardization of 15 silver = 1 gold. I believe they came after.

 

And yes, in some auctions, it is stated that 1GC = 15SC.

But there are also the cases where "only GC are accepted" and with that the change rate changes. There are some cases when ppl wanted only SC or only GC and the rate variated from about 12SCto about 16SC per 1GC.

 

 

Anyway, if you want to sell some GCs for something like 5-6SC, please let me know, I'd like some of those.

[Ary Endleg]

I like the replies so far.

 

Note for Burns: That would be normal approach to come with a proper exchange rate. Thing is the amount of credit investment into shop to gain those coins is actually POTENTIAL inflation rate only. You have no idea how people spend their credits, some might avoid silver branch at all and get gold from other branch for example. In shop you can get 40 silver and 5 gold but there is nothing that guarantees that each player will get all of those coins or at least equal ratio, hence if you don't know how much each person is "minting" then you can't calculate inflation rate, only potential inflation rate which won't help with anything. Second part of equation is actual amount of coins in circulation, we don't have stats about those and even if we did we would still need to separately count amount of coins on active players only, since inactive player's coin isn't in circulation since he doesn't participate in the market.

 

With your idea I can only calculate "effort" (credit investment) needed to obtain either 15sc or 1 gc. If I find that one is superior, I can grab that one and hence "profit" because it took me lesser effort to "mint" it. Thing is you can't do this in mass amount because you are limited with credits and shop resets. But if this gets found out and everybody gets to know what is easier to grab from shop, since many people have limited credits they would go first for that option if their interest is wealth. Only leaving paying members to possibly empty up shop, but they would also probably start in same place. Once this would be done in masses you would witness high amount of inflation of one particular coin type. At some point it would become obvious and exchange rate would be forced to shift.

 

I've come to fascinating observation regarding coins. There is no monetary system that enforces those rates. Market has freedom to alter exchange rates. Both gold and silver have only one use, as trading currency. Both gold and silver are equally accepted payment.

From which I conclude following. Currently as thing stands, due to equal acceptance of coins and their sole purpose community was able to come up with consensual (rather than enforced) monetary system in which different currencies became treated as single currency having standardized exchange ratio. Since this system isn't enforced, in times of special trade events, exchange rates do deviate in order to supply newly arisen demand which appeared temporary due to unique use/acceptance of certain type of coin, while other one is denied for this certain trade. This new exchange rate deviates in reasonable amount due to the fact that this new exclusive use/acceptance is only temporary. After this use/acceptance expires rates go back to standard, because of this demand is aware that long term value is same, hence demand won't be willing to pay huge deviation in rate and that's why supply can't impose too high exchange price.

 

In short: gold and silver are treated as same currency most of the time, this changes to two currencies when special auctions happen that ask specifically to accept only one type of coins, once this auction is over market again has single currency.

 

I find this part of MD market fascinating, I can't think of such example in real world.

[haustorium]

real quick thought....

 

its what the market will bear.

 

any conversions rate regarding anything is only acceptable at the rate that the market will bear. meaning if people don't BELIEVE in the rate then the rate will change to an amount that the PEOPLE will ACCEPT and BELIEVE in. you ask why a 1:15 rate because its the RATE that at one time the MARKET would BEAR and it didn't change for quite a while thus made it into law and tho the rate should of changed but didn't because the market at the new time wouldn't ACCEPT the new value.

just my thoughts

please let me know if im onto something! THX!!!

[Muratus del Mur]

wait a sec :))) so the 1:15 ratio is simply because on some notes i said its equal 15 silver? really?

 

ok if this is so, then it is amazing. It is proof of the power of standards and OPINION when it comes to market and valuables.

As soon as i get the time do so it i will remove such description from notes. It was probably at that time a pure guess, that became ..standard....you realize now the power of opinion when it comes to stock market, and value of things? amazing really.

 

Now my focus is on balancing the true value of things, and the true value of things is somethign dynamic, given by TWO things:

 

1) actual usability of the valuable (in the outer world gold is valuable but less valuable than INOX, of you consider its usability)

2) rarity...yeah RARITY defines value on the market.

 

so lets see what is valuable for real....

tools are valuable in md as they are in the outer world... a tools can help you survive, ghather food and other usable stuff.. a 100$ bill is as useful as a piece of worthless garbage, if you consider its actual usability

Diamonds are valuable, both as usability and as rarity. But so is art, art is unique.

 

In both cases, money is just a convention, they have no value, they are just an agreement about their value. Now i do realize most of you know this, but there are kids around here that hear this first time in their life, and nobody teaches you this when you sell your life and time at work for a pile of printed papers called money.

 

I will post shortly a list of resoruces, but later also a list of items, to determine their estimate rarity value. This is very exciting for me, because i have the chance to do  dynamic mechanism of estimating real value of stuff.

 

Do you even realize the value of this lesson? because it is a lesson, a lesson of how opinion turns to value and rarity fights usability. Virtual against real, both ending in a very unreal thing called money, that allows you to get very real "stuff"

[Grido]

In connection with this, is it possible to have noted somewhere the total amount of gold/silver on active accounts? Something that's updated automatically so that if people are interested, they can keep track of the actual ratio between the two amounts.

The closer the volume of Gold compared to Silver that there is available, the lower the value that Gold holds when trading, and the further apart the volume, the greater Gold should be valued at when trading.

It would naturally also need to include notes, and other items that are clearly marked as equating to gold/silver.

[Chewett]

Actually the value of 15 silver to one gold happened much much before notes were even a thing Mur.

You set the note price based on the already agreed values.

[Junior]

9 minutes ago, Chewett said:

Actually the value of 15 silver to one gold happened much much before notes were even a thing Mur.

You set the note price based on the already agreed values.

Correct from what I recall there might of even been a forum discussion about establishing 15:1 ratio. (

)

Edited April 23, 2016 by Juni0r

[Miq]

There is one thing about this ratio that you are ignoring. These coins are Currency not tradeable metal.

Different valuations of currency are exchanged at a permanent and fixed ratio. 

Value of any denomination of the currency is dictated but the market(how many coins will i need to feed my elu).

 

So if you someone wants to raise a point that silver as a metal is worth more than it's current market value as a coin (in has happened in real world) then let's make a coin smelter and see what will happen.

[Muratus del Mur]

the value that i intend to keep equal to the metal value is gold, silver is the one fluctuating as the market or agreements desire.

 I still don't get it where the 15 silver per gold comes from, its intriguing. I am not saying i don't agree, i just say i dont remember where it comes from. From the values of the latest stats i see gold is more like 10 silver (right?)

 

I wish to remove any written form of this currency exchange rate and let silver to gold ratio be rumor based so to say. People will anyway define a value for it and will probably remain 15, but i want to be clear i don;t want to name a fixed value in silver for one gold. 

...and we are not even close to discuss diamonds yet...lol

[Muratus del Mur]

Something more...

this is something i want to do, but probably will forget to do it all the time, so i post it here so you can correct or remind me when it happens. Objects made out of gold should have a note somewhere stating their gold weight calculated in coins.

 

for example this:  Massive gold statue (20 Gold)

It means that statue its the amount of gold equivalent of 20 gold coins melted together. the craftsmanship for the object could make the statue worth more for example, but not less. One coin of gold should have its value in gold, not an agreed value like notes would have for example. 

 

For example you have a pile of gold , you just melt it together in a round shape of similar weight of a gold coin and you actually get a gold coin. I want gold to retain its actual metal value not a currency value, and will do whatever it takes to keep things like this.

 

In case anyone argues its not possible, feel free to comment, in case anyone doesn;t WANT this like that, that doesn't interest me at all. We need a true coin out there, and keeping gold as the measurement unit for it sounds to me the way it should be. The items that use gold like the kill items are set to use anything out of gold, and everything in the future will be set in such way that gold coin is a sort of weight unit.

 

Makes sense what i mean? (i could try to explain different if its unclear)

 

 

 

[Miq]

One problem with Gold standart coin in MD is that cold is neither rare nor has it any "value" in MD. You can't do anything with gold except use it as a coin. 

So value of the coin comes from the stuff that you can do something with, tools, creatures, items. avatars.

So the gold money in MD works nothing different from the paper money of RL. 

So all you can do now is be an proper government and print or destroy money from circulation. Thus inflating or deflating the system.

 

And this changes nothing about 1gc being 15sc  

[DARK DEMON]

I agree with Miq. You can't compare RL-note value to the price of the paper needed to make it.

How can a gold coin we currently hold be the same as one which we make out of a smelter using metal gold?

Edited April 24, 2016 by DARK DEMON