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Reader Comments (37)

Posted: Aug 26th 2009 12:08PM (Unverified) said

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I don't understand. How can you have bank without collateral, a system to evaluate creditworthiness and establish identities, overwhelming military or social force to ensure that the majority of employees/depositors are following the rules?

In a world without real consequences there can never be

Posted: Aug 26th 2009 12:31PM wjowski said

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EVE Online: Where griefing has evolved into corporate scandal.

Posted: Aug 26th 2009 3:17PM Crsh said

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It's part of the game, it's intended for players to risk and lose everything if they chose to not be cautious enough. And that's fine, Eve has something huge going in player-driven content that most successful MMOs can only dream of hosting (or they just want to stick to maniacally-controlled and scripted events, aka WoW and so many others).

Posted: Aug 26th 2009 2:35PM madeleen said

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EO is Ayn Rand's rancid fantasies in play.

Can anyone be surprised about any of these meltdowns when the people playing value their greed over others? The purpose of the game has turned into players looking to take others in ponzi schemes.

Of course a governing authority would work wonders to curb some of it. But that is not the purpose of this game.

I wouldn't be surprised if most of the players who lost their virtual money were just the game's little nobodies. People who don't do the high stakes things but wanted a return on the small cache they did save up.

Posted: Aug 26th 2009 5:20PM Tom L said

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Yes, like how our governing authorities have done such a .brilliant. job of regulating the fraudulent activities of the real world banking system. Entrepreneurship implies risk. Not every venture will be successful because humans cannot accurately predict the future with any certainty. Those that do get rewarded with profit and those that don't go bankrupt. EBANK didn't and is bankrupt. The investors/depositors took the risk for the promised returns.

The only difference a regulating authority would make in this would be to assign who is and who is not allowed to fail or worse, influence the success one institution at the expense of another, ie. Goldman Sachs vs. AIG. Thank you no.

I'll take Rand's flawed view of capitalists over the current corporatist nightmare every day of the week.

Ta,

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Posted: Aug 26th 2009 6:48PM madeleen said

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Luongo

The authorities in power in the US are Ayn Rand fans. Her nasty little philosophies are all over free trade and the un-governed financial institutions.


And what do we get? Melt downs like the one in EO but on world impacting scale. People will starve due to people thinking that they can crash systems because their self will trumps society.
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Posted: Aug 26th 2009 3:46PM Tom L said

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Dblade,

Spare me the banker-programmed rhetoric, that's what they want you to think. The FDIC exists for the bankers at our expense by introducing the moral hazard of augmented risk assessment. Socializing the risk and privatizing the rewards... On that issue, the political left are absolutely right, and precious little else. Banks should go bankrupt just like other poorly run businesses.

Banks only fold when they are revealed to be insolvent or over-leveraged beyond the risk profile of the investors (depositors) of the bank. It doesn't matter if the bank is virtual or real, human actions in both arenas are based on the same set of preferences. Yes, the boundary conditions are different as you point out, but those are internalized by the actors within the system. The good part about this particular bank failure is that, in reality, no one gets 'hurt' in the real world, other than their lost time. This is not a trivial thing, but it is more trivial than if a real world bank fails.

EVE is doing a great job of giving all of us object lessons in reality with minimal physical risk of lost capital. Think of it as paying a monthly fee for an education in economics.

Ta,

Posted: Aug 26th 2009 5:01PM Dblade said

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Tom, I don't see the FDIC being used to justify augmented risk assessment-its a guarantee not to banks, but to depositors in case of the bank folding. It's the reason really we trust banks at all to hold our money and provide transactions like checking. The "too big to fail" policy may do that, but I think as we see with GM, if you are going to have that, it needs to come with increased governance and real teeth to it to return the business to profitability in order to repay the creditor of last resort.

The problem with your theory is that we have seen what happens in real life when bank runs and systemic banking crises occur, and it is very much too prohibitive to even a healthy economy as opposed to other businesses failing. If there had been no FSLIC, the S and L crisis of the 80s would have plunged the US probably into a full-spread depression as hundreds of banks would have folded.

EVE is not applicable because I'm wagering there is little to no systemic risk that can affect the economy beyond the bank. Like I said, if it goes under, you just create more ISK through other means-nothing about it failing really affects that. But IRL systemic risk can cause even healthy banks with a good balance sheet to fail, the lesson of the financial crisis. Banks are too interdependent IRL as compared to in EVE, which is why EVE is able to survive banks being looted of all their assets, and why we IRL get great depressions and economic downturns.

So it's not as simple. In my opinion, economic theory is a useful tool, but like the rest of the social sciences, you have to be very wary of using varying situations to set a theory or rule in place.
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Posted: Aug 26th 2009 4:40PM Grok said

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BoB's demise actually demonstrates my point.

"Band of Brothers was dealt a crippling blow back in February when a well-placed member of their own alliance defected to GoonSwarm, but on his way out, used his access privileges to disband the Band of Brothers with one click of a mouse."

That doesn't sound like skill or strategy to me. It sounds like abuse of game mechanics. While I understand that's perfectly permissible under CCP's rules, it is exactly the kind of thing I'm talking about in my original statement.

Posted: Aug 26th 2009 5:43PM Kalex716 said

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Well I disagree... Theirs entire chapters in "The Art of War" on this kind of thing, making political moves like this just as essential if not more so to any mere battle objective. And it plays itself out in rather grandiose drama that actually goes a pretty long way towards enriching player experiences (for victory or tragedy depending on where your allegiance is drawn) that are iconically memorable and quite simply impossible to get on this scale in any other MMO.

Some people feel like all conflict should be resolved in a strict competitive oriented and equalized environment, but thats always idealistic and just rather simplistically "sportive" if you ask me (Arena's blah blah blah). Honor is an illusion, and games like EO with digital things at stake go a long way towards illustrating that, and if you can get over it its all the more fun... Or, when the rare chance you encounter it, its often something to be revered and respective and glorified. It's an enriched experience either way if you can see the big picture.
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Posted: Aug 26th 2009 4:51PM Graill440 said

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Really pathetic how many folks think there is a parallel between real banks and some player run bank in eve.

EVE is a game, running a real world bank is not, nor does a real bank have the luxury of infinite resources to fund itself like an eve bank does. Simpler and more greedy forces are at work here.

The problem here is the corruption in eve, no oversight worth anything by the devs, and devs that are corrupt themselves. Anyone suprised this happened needs to adjust their diapers.

Lets look at the possible failure mechanisms. The individual running the eve bank was skimming and now has a beautifuly FAT account and is playing his or her role, this one being the most viable, as corruption in eve both dev and player is the norm. This is most likely what happened.

Another possibility is the person running the bank is not the same one that started it, the account was sold, mums the word, and the idiot did not know how to play the AH to make capitol. Since eve devs say they meticulously track player run ventures via their godlike numbers crunching abilities they would have seen a difference in operation style and actions, since the devs did nothing, the account is apparently legit.

Still another possiblity is the same person that made the bank has run out of new players to invest in his or her ponzi scheme, never smart enough to play the AH the income dried up because of lack of new subs and or folks getting smart and just not giving money away to strangers (i thought eve was growing by leaps and bounds?)..............dejavu?

Posted: Aug 26th 2009 5:12PM Dblade said

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Grail, looking at that balance sheet, it simply looks like they issued loans to players who cheerfully defaulted and stuck the bank with a series of high-value losses. I'm not sure how EVE's currency indexes to EVE gameplay, but that bank has had 16 losses in the span of nine months totalling a trillion ISK. Players pretty much looted it.

To be honest, they should have expected that loaning people hundreds of millions of ISK in a cutthroat world with zero way to recoup defaults was very stupid, and limited actual loans to a modest size, relative to what they could get back by bounty hunters or some method. I think they chose the wrong model to base a bank on.
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Posted: Aug 26th 2009 6:34PM Grok said

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I suppose if you take your gaming seriously enough, then that makes sense. I just don't see defrauding people out of hard earned assets through social engineering, as enriching the game experience, in fact because it essentially circumvents much of the game mechanics I think it cheapens the overall experience.

How much cooler would the take-down of BOB have been had it come about through strategy and skill, rather than the epic struggle all coming down to one knob deciding to change sides?

Back to my original point though. This is just more of the same thing we hear of all the time. I don't see how it constitutes news.

**Newsflash**
EvE actively rewards deception and punishes trust!
**/Newsflash**

Posted: Aug 27th 2009 12:19AM Doran7 said

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"The federal government insures banks though"

…which is also pretty stupid considering that the money they guarantee it with is non-existent. If the bank gets into trouble the "Fed", an unaccountable non-governmental agent, prints more money which is backed by US debt and waters down the value of moneys already in circulation. Witness bank bailouts and current trouble with inflation caused by this guarantee. Banks in the real world play fast and loose with money as often if not more often than eve banks do and get away with it because rising taxes guarantee they won’t fail… this system is about to collapse.

Posted: Aug 30th 2009 12:34AM (Unverified) said

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Okay... This is all about make-believe money (ISK) in a make-believe world (EVE) in a make-believe bank (EBANK)? Simple fix: Just make-believe it never happened, flip some bits and put the ISK accounts back where they were, before they were bit-flipped to their current state. Seriously folks, how does a make-believe bank fold? Only if you make-believe it did and pretend you can't do anything about it. Reality check, anyone?

Posted: Aug 31st 2009 4:32PM Berzerk said

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See... here's the flaw in that logic. The reason why EVE is so amazing is because NOBODY will come to your rescue if you screw up, or if someone cheats you out of every last ISK you have.

Escaping from this world into another world is a way that large numbers of people relax, even if that world is just as messed up as this one.
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Posted: Sep 8th 2009 3:33PM (Unverified) said

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This is what fascinates me about EVE. I've played a trial, but I just couldn't get into it, unfortunately, but that doesn't make it any less fascinating. It really is an amazing example of what would happen in the real world without government authority. And its economy is as complex as the real economy.

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