An idea: credit cooperatives

Discussion in 'Marketplace Discussion' started by 72Volt, Jan 14, 2015.

  1. Hey EMC, I have another idea for a venture. I call it a 'credit cooperative'. It works like this.
    1. Person A sets up a credit cooperative, and begins accepting members through a post on a thread. They pay a fixed membership fee of a certain amount (e.g. 1,000r) which does not change, and this is added to their credit cooperative balance, which is kept track of by the CC owner.
    2. Person B, a member of the cooperative, has a double chest of cobblestone they wish to sell. They barter with Person C, who wishes to buy it, and agree a price.
    3. Person C collects the double chest of cobblestone on the credit cooperative's residence. This is where it gets interesting. Instead of Person C paying Person B the rupees, as would be the case in a regular transaction, the agreed rupee value is subtracted from Person C's balance and added to Person B's balance.
    4. Once a week (or once a month) the number of members is compared with the number of members at that time last week (or last month). The percentage increase between last week and the current week is calculated, and the balances of all current members are increased by that percentage, which they can then spend. For example, if the CC has 5 members on Tuesday, and next Tuesday it has 10 members, then everyone's rupee balance doubles.
    This idea is inspired by this.
    I asked myself "In EMC, where there is no divorce of the entrepreneur and labourer in a business because of the absence of banks and lending, can a cooperative exist distinct from a for-profit business?"
    The credit cooperative is the product of this thinking.

  2. credit = bank; bank = not allowed
  3. Technically it wouldn't be a bank. At it's simplest, a bank serves two functions:
    • to lend money, with the expectation of receiving it back plus interest at a later date
    • to 'borrow' money by allowing people to open accounts to save their money for interest
    A credit cooperative would serve the following functions:

    • to allow people to become members of the cooperative upon payment of a fee
    • to modify the ledger when a transaction takes place between members, to facilitate trade within the cooperative
    • to grant additional credit to the balance of members upon the expansion of the cooperative
    I get where the confusion would come from, as 'credit' normally refers to lending. But this doesn't involve lending; the focus of this is to create demand, by creating 'money' which doesn't exist in the player's balance, but only on a ledger, which can then be spent, meaning higher productivity and output.
    Bro_im_infinite likes this.
  4. The money would need to be stored on one account; this is illegal.
    B4DMAN5IMON likes this.
  5. What do you mean?
  6. If the person in which holds the money is banned, the money is gone. This is why banks are not allowed. Also because of scamming.

    Otherwise, great idea! +1
  7. I don't think you understand. The money is a fee to prevent people swarming into the cooperative as members to claim 1,000r of credit, which would then be spent, and the member would never be heard of again.

    It is not withdrawable, it's not a savings account which you can put money into, receive interest from, and withdraw money from. It's a fee to enter a cooperative, and trade with others under a system where you are paid in a credit, redeemable not in rupees, but only as goods purchased from other coop members.
  8. Can you dumb this down.

    Like a lot?
  9. i think he means that this is an organization that if you pay the fee, youll recieve cheaper thing with the credit you exchanged for the rupees
  10. If you have to say "it's technically not a bank" then it's pretty close being one in Emc setting. Most Credit cards companies are usually backed by large banks or large finacial institutions. Blah blah I get into it but end of the day what happened player B doesn't pay credit bill to the player A owning him rupees meaning the staff has get involed. Also how are going to convince player C that your not going to pay for item at hand and just bill player A. I can see players taking advantage of this by buying items or item which other wise couldn't afford. Yes they pay the minimum each month "3000r which regular member makes just signing in 30 days" what if gets to the point that Player A's rupee amount get low that he can't pay Player C. Another thing I can see Player B does make the monthly credit cause they forgot or just don't want too. There prolly more simple to explain this but I go back to what Mr.socks came up with during are staff IRC chat when discuss this. Credit=Bank; Bank= Not Allowed
    EffinBatman and PenguinDJ like this.
  11. I understand now. The player pays 1000r up front. (One time payment) The credits are not physical, and are not rupees! They are imaginary payment, managed on the forums/OP post.

    Galantisizer:200 Credits
    72Volt:274 Credits So, I put 64 wood on the market, and sell for 50 credits. 72Volt buys, and edits OP post. I now have 250 credits, and he has 224 credits. This way, you cannot scam, because if you don't get paid until you give the items. The player receiving the items, in this case 72Volt, confims it via forums. Also, players are not in control of the credits, the OP poster is. So the receiver can't just not pay the player once the items are received. I agree with 72Volt: This is in no way at all a bank. I guess you could call it BitCoin - EMC edition. :)

    Am I right when I say that its a one time payment? I think that it should be a one time payment, and you get a starting amount of 1000 credits. Then you must earn the rest by selling stuff for credits. EDIT: I cannot seem to be able to fix the spoilers, I am sorry.
  12. I feels you!
    Galantisizer and NathanRP like this.
  13. The way I understand it, this is basically a network of trading that makes sure everyone gets a fair deal. The credit system acts as a sort of alternative currency, but it's mostly resource based. You don't have to be rupee-rich to participate. I like this idea, but I'm a bit worried about establishing the value of things: unless there is a definite rupees-to-credit exchange rate, it seems like inflation would be huge, especially if it started off with only a few people. Plus, what happens if someone decides to leave the collective, taking with them a large chunk of credits? Will more be created naturally as others join, or what will you do?

    Like I said, cool idea, but there are still some kinks you would have to work out.
    tuqueque and boozle628 like this.
  14. Legality of it aside, what's the point of taking the resources to establish such a system? I see what it allows for, but only a small percentage of people would be interested because the rest of us can just use the traditional, non-complicated and secure system of shops without all the downsides
  15. To answer all questions:

    The Setup
    1. Guy sets up credit cooperative (the 'owner').
    2. Owner accepts members into the CC for 1000r* each.
    3. Members have their name written in a book.**
    4. In the book, 1000r is written as their credit balance, which can then be spent in trades.

    How Trades Work
    5. A member has a double chest of cobblestone (a seller).
    6. Another member would like to buy it (a buyer).
    7. They agree a price of 1000r.
    8. The seller gives the buyer the cobblestone, via an access chest on the residence of the credit cooperative.
    9. Instead of paying the buyer in physical rupees, he instructs the owner to transfer 1000r of his funds from his credit balance to the seller. (Remember that's in the book.)
    10. The owner edits the balances of the buyer and seller in the book.
    11. He subtracts 1000r from the buyer's balance and gives it to the seller.

    Inflation within the Credit Cooperative

    12. On Monday 1st, the owner notes how many members there are.
    13. There are 10 members.
    14. On Monday 8th, one week later, the owner checks the member count again.
    15. There are 15 members.
    16. That's a 50% increase in members.
    17. The owner looks at everyone's balance, and adds on 50%.
    18. Joe had 1000r, now he has 1500r. Bob had 5000r, now he has 7500r.
    19. By creating more money, we encourage people to spend more, meaning more things are made.
    20. This inflation system also rewards early adopters.
    21. If you join when there are 5 members, and have only 1000r in your balance, and come back when there are 100 members, you will now have 20,000r in your balance.

    Advantages of Credit Cooperatives
    • It's a great investment. Because inflation is pegged to the number of members, the more who join after you, the more money you make.
    • More inflation, means more money, which means more stuff gets produced, which means people are able to build more, hunt more, create more, mine more, all sorts of things can get done.
    • The inflation is spread equally amongst everyone with some funds in their credit balance, while inflation of the actual rupee is sluggish, and you can only get it if you vote or log in.
  16. Isnt this part just a more complicated bulk shop?

    I kinda like the idea, so ill join when i return to my home

    I think by inflation you mean interest(similar to a bank that gives you money each month or annually)
  17. It's an example of a trade. Anything can be traded via a credit cooperative, not just double chests (though in theory, an owner may need to impose transaction fees on those who engage in a lot of transactions, as it can be time consuming for the owner to manage two people buying and selling a dirt block back and forth for 1r.)

    I haven't set it up myself, it's just an idea. But I might.
    tuqueque likes this.
  18. The primary problem with your argument from staff POV is this:
    If that book is in player hands AND is editable, then there aren't any logs to protect either side and for staff to be able to prove who did what.

    Also your argument that:
    Means you are treating this system as separate to the rupee and supplying some sort of gain (like a bank does interest).

    I understand your plans and see how it would work in practice, but it will not be allowed to exist on Empire Minecraft.
  19. Apart from the arguments already listed above, this system would be extremely vulnerable for abuse, I also have to say that this looks way too complex for me. I don't really see any advantages here (and believe me, I honestly tried) but only problems in the making.

    So I sold a DC of cobble and we both told the credit holder about it. But as it turns out the credit holder has taken a short leave of absence (unintended and unexpected) and now I'm stuck without my DC of cobble and without payment. Guess I should ask staff... but I can't.

    Of course that is an extreme example. But still...

    So, something less drastic: when I sell a DC of cobble in the regular way both buyer and seller will have their stuff as soon as the deal is done. And the buyer can basically sell as soon as he/she has a DC of cobble. But in your example the items would be located on the "credit stores" plot. Translated: I need to take a lot of effort to get my DC of cobble over there, then the buyer would need to take mutual effort to get it to his plot again. I don't see any advantages here, only more work...

    Thing is; wouldn't it be much easier on the both of us (seller and buyer) if we both worked on getting the items to the new location?

    Now don't get me wrong here. I like your idea. Thing is; its much easier to criticize ideas than it is to come up with them. Many people don't stop to think about that. And personally I think you really tried to organize and think things over.

    Don't let this be a downer which may discourage you of trying something else. If at first you don't succeed....

    My advise? Don't try to mimic things from the real world "because it could be fun". Like, in this case, credit card (-like) companies. Here's not saying that it couldn't be fun, I bet that it can be, but it simply wouldn't be suitable for public use because of its huge risk for abuse.

    So instead focus on whether something is doable or not. And try not to overregulate.

    For example....

    You know that smpX has many shops which are also heavily used by players. Better yet: even players from other servers. Problem: those "darned" 10rupees you need to pay for your vault (disclaimer: just a saying, no criticism intended). So how to solve this "problem" ("" because I personally don't consider it one)?

    Well, you could put bulk storage up for rent. So allow players access to a chest on a "storage residence" so that they can put items in there which they might want to sell which would save them the need of using the vault all the time (I know that this could also be an issue for discussion, but as said: it's just an example).

    In this situation your role as service provider should be done, don't try to overdo it. Because if player A now sells the stuff on the "storage residence" to player B they might come up with the idea themselves to give player B access to the items for player A. That's when they'll get you involved again.

    But otherwise they'll simply do their transaction, move the items, case closed.

    The less you, as service provider, have to do the less risk there is for abuse (depending on the situation of course).

    Just my 2 cents.
  20. On the topic of the book, I was intending to use the book as a metaphor for explanatory purposes, but forgot to put a note at the end of the post that it would be more feasible for the player to use a Google Drive doc or something, which could then be set up with a change log somehow.

    On the topic of the gain, why on earth would that make the business legitimate? Assuming all actors in EMC's economy are rational, technically every single transaction results in one player supplying a gain to another. I should add, with regards to the gains, it is less comparable to a bank, and more comparable to betting. By joining the credit coop, you are essentially placing a 1000r bet that more people will join than will leave the coop in the future.

    (I haven't thought much about a leaving procedure - potentially, one could leave the cooperative by requesting to receive their 1000r fee back; their credit balance could then be distributed across others in the cooeprative? It'd be redundant anyway, they could just buy some diamonds through the cooperative and sell them. It'd mean they could get more than 1000r back.)