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Where is our money?

McCormick said:
bartonpaper.jpg
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Or Dr. phil? :(
 
Mike onda mic said:
Instead of comparing mindark with banks you should compare them to something similiar like online poker sites. Both have players deposit money for credits and the operator takes a cut (called the rake in poker) of the money cycled. Trustworthy casinos have statements such as this from pokerstars.com

Safety and Security
PokerStars' commitment to safety and security is second to none. We value the integrity of our gaming system above all else and use the latest in encryption and security technology. Our player's funds are kept in segregated accounts held with a leading European bank and are not used for operational purposes. For further details, please visit our integrity page.
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I don't use online poker sites, but I hope the details on their Integrity Page are a lot more explicit, because this assurance is just a facade, with no guarantee whatsoever that clients funds are safe.

But here's the Mindark version from the EULA, which some earlier contributors hadn't read.

Despite the similarity in terminology, all Virtual Items, including virtual currency, are part of the Entropia Universe System and/or features of the Entropia Universe, and MindArk retains all rights, title, and interest in all parts including, but not limited to Avatars, Skills and Virtual Items.

I think Section 7 of the Terms of Use, which describes the mechanics of withdrawals, may confuse because it makes no mention of this clause, yet is subject to it should the worst happen.
 
chevrons said:
I don't use online poker sites, but I hope the details on their Integrity Page are a lot more explicit, because this assurance is just a facade, with no guarantee whatsoever that clients funds are safe.

But here's the Mindark version from the EULA, which some earlier contributors hadn't read.

Despite the similarity in terminology, all Virtual Items, including virtual currency, are part of the Entropia Universe System and/or features of the Entropia Universe, and MindArk retains all rights, title, and interest in all parts including, but not limited to Avatars, Skills and Virtual Items.

I think Section 7 of the Terms of Use, which describes the mechanics of withdrawals, may confuse because it makes no mention of this clause, yet is subject to it should the worst happen.
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Nice input on the legal side of the problem!

I also play on Poker Stars and my view is they are a regulated entity (i.e. what they do is controled) so I trust that the statement they are making is true and that they are indeed segregating all the funds (or they might be crooks but it's a different problem).

I also regret MA is not taking the same kind of steps to give warrantees to players...
 
coubo said:
Nice input on the legal side of the problem!

I also play on Poker Stars and my view is they are a regulated entity (i.e. what they do is controled) so I trust that the statement they are making is true and that they are indeed segregating all the funds (or they might be crooks but it's a different problem).

I also regret MA is not taking the same kind of steps to give warrantees to players...
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The major difference between the two certainly is, that it takes a lot more to keep EU running compared to what is needed to maintain operations for Online Poker. Development cost for an environment like EU is does cost a lot, and it earns the money over a long period of time.
So how could EU give guarantees to the players, if there is no guaranteed income?
 
RagLodbrok said:
The major difference between the two certainly is, that it takes a lot more to keep EU running compared to what is needed to maintain operations for Online Poker. Development cost for an environment like EU is does cost a lot, and it earns the money over a long period of time.
So how could EU give guarantees to the players, if there is no guaranteed income?
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That's the problem of the company and its shareholders! Companies are business ventures, they may loose or gain, that's their risk! It should not be customers who take the risk for them.

Pokerstars does not have any guaranteed income either. If people don't play, they don't get any rake and they still have to pay their employees and servers. I don't see much difference with MA... MA has higher costs but likely also higher margins.
 
rofl, just came to think about posting this for fun, picked out some of the info from the swedish tax office.... so this is both correct and accurate info about mindark as company.

I found two companys (One old, no longer active) one, and a newer active one.
So here u go.
What i think is fun read here is how much their bussnies/purpose has changed from the old comapny to the new one
Sorry for the weak translation at times, it was a really tricky document to translate >_>

(Old one)
Name: MindArk AB
Organistion number: 556559-2960
Adres: JÄRNTORGET 8 PL 22
Postalcode: 413 04

Regestation info
companyform: Ltd
Registation date: 1999-06-23
Status: bankruptcy finished 2006-10-25
Mothercompany: -
(Koncern/group)?mother: -
F-tax status: Unregisterd for F-tax
VAT status: Not active in VAT register
employer status: Not register as employer

Bussnies/purpse
The company is going to develop and sell computer applications, own and administrate permanent property and the value of the shares , And execute other there thru alike activity.




(New one)
Name: MindArk PE Ltd (publ)
Organisation number: 556640-4769
Adres: JÄRNTORGET 8 PL 22
Postalnumber: 413 04

companyform: Ltd
Registation date: 2005-08-02
Status: The company is active
Mothercompany: -
(Koncern/Group)mother: MindArk PE L.T.D (publ) (556640-4769)
F-tax status: Registerd for F-skatt
VAT status: Active in VAT Register
Employer status: Registerd as employer

Bussnies/purpse
The company shal directly or through subsiderat develop and supply a virtual internetbase platform for entertainment and economic activitys for a global userbase, own and administrate permanent property and the value of the shares as well as through subsiderat run bank- or other financingmovement, And execute other there thru alike activity.
 
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thoreau said:
We've been there.
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While I think frigid is probably right in his post there that wasnt the point I was trying to make. If everyone gets their fair share of loot (same long term tt value loss %) which would make it not gambling they still make money in a similar way as a poker room by taking a percentage of the money cycled as a fee for running the game. Some of the earlier posts where comparing mindark to banks which having nothing in common with how mindarks business works and saying mindark is in good shape for having more of the players money in hand then a bank would. Mindark does not pay you interest and banks wouldnt beable to give you interest if they didnt use a majority of the money to loan to other people at higher rates. If a bank runs out of money from lots of people trying to withdrawl they can sell the notes (maybe not nowadays :() to another bank or invester to get the money. If we all cash out how will mindark get the other 53% of the money? Maybe they have lots of assets they could sell and pay us all back. I dont know. It just doesnt seem right that they invested half our money in expanding their company or whatever they did with it. Once the money is lost to fees they can do whatever they want with it. Until then it should be our money and kept in a safe place but according to chevrons post I guess everything is legally theirs and they are nice enough to allow us to withdrawl and could take away that option whenever they want.
 
Mike onda mic said:
Mindark does not pay you interest and banks wouldnt beable to give you interest if they didnt use a majority of the money to loan to other people at higher rates. If a bank runs out of money from lots of people trying to withdrawl they can sell the notes (maybe not nowadays :() to another bank or invester to get the money. If we all cash out how will mindark get the other 53% of the money? Maybe they have lots of assets they could sell and pay us all back.
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I think that is one prevailing thought. That MA invests a % of deposits and if there was a run on the bank MA could cash in those assets to cover withdraws.

It is clear that there is a lot of cash going into MA via deposits. I think it is an interesting question as to where goes the money that is not used for normal operating expenses.

Do you have any proof that your favorite online poker game doesn't invest a portion of deposits?
 
thoreau said:
Do you have any proof that your favorite online poker game doesn't invest a portion of deposits?
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I'm not even sure my favorite online poker game isn't showing everyone's hole cards to one of my opponents since the one that was doing that is still in business. Don't be so sure that you're dealing with a "regulated entity" or that even if you are that means anything. IMO you are safer here than you are on a poker site, I can direct you, if you'd like, to research examples of certain sites seizing assets, refusing to pay out, and cheating. Most of those are still in business.

To Da Snake, markup has nothing to do with it, MA doesn't guarantee markup value only TT value, there are a few other threads explaining MA's cash relationship to markup.

As far as what MA is doing with "your" money? Whatever they want, it's their money until you withdraw it just like any other investment, unless you have the cash in hand you have risk. Even if you have cash in hand you have risk, more importantly is what you are doing with your money, not what MA is doing with it.
 
chevrons said:
But here's the Mindark version from the EULA, which some earlier contributors hadn't read.

Despite the similarity in terminology, all Virtual Items, including virtual currency, are part of the Entropia Universe System and/or features of the Entropia Universe, and MindArk retains all rights, title, and interest in all parts including, but not limited to Avatars, Skills and Virtual Items.

I think Section 7 of the Terms of Use, which describes the mechanics of withdrawals, may confuse because it makes no mention of this clause, yet is subject to it should the worst happen.
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According to my interpretation, those words mean that:
- Whenever you make a deposit, your real money is actually gone and disappear. It becomes MA's assets. Your PEDs are MA's asset too, you are using MA's asset to play the game, not your own asset.

- MA can refuse any withdrawal request whether the request is legal or not. Because PEDs is MA's asset, MA has rights to decide whether to give away its asset or not.

- The Asteroid club is not belong to Neverdie, the Treasure Island is not belong to Deathifier, nor your peds belong to you.

:D Interesting.
 
nlnforever said:
According to my interpretation, those words mean that:
- Whenever you make a deposit, your real money is actually gone and disappear. It becomes MA's assets. Your PEDs are MA's asset too, you are using MA's asset to play the game, not your own asset.

- MA can refuse any withdrawal request whether the request is legal or not. Because PEDs is MA's asset, MA has rights to decide whether to give away its asset or not.

- The Asteroid club is not belong to Neverdie, the Treasure Island is not belong to Deathifier, nor your peds belong to you.

:D Interesting.
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As the age old gamer saying goes....


All you base are belong to us


It seems to be MA's motto :rolleyes:
 
I LOVE this.... :yay:
Secondly, if something happened to MA, I or someone else would step in to buy it up, hence securing the deposits of current players.
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There we have it... if MA fails at this venture after 7 years and a supposed player base of 800,000 people.... we can count on Ozi to bail us out. Don't worry... the downtime wouldn't be much different then a VU
 
All your PEDs are belong to us.
 
Interesting...

This may seem shocking at first, but compared to most banks MA's balance sheet seems much more stable.

If you have ever looked into the fractional reserve system which most modern day banks use only about 10% of the deposits are held in reserve. The rest are loaned out and become a risk. Even more shocking is the loaned money is often redeposited back into the system allowing even more money to be lent to potential borrowers. This stretches the money supply and is the major cause of inflation.

To have MindArk have more then 47% of our money in reserve is pretty amazing and as far as the drop from 86% down to 47% thats most likely because of the development costs of CryTropia. After it is implemented and new money is flowing into EU I am sure they will steadily increase the reserves they had once again.

/Napo
 
xpoptartx said:
This may seem shocking at first, but compared to most banks MA's balance sheet seems much more stable.

If you have ever looked into the fractional reserve system which most modern day banks use only about 10% of the deposits are held in reserve. The rest are loaned out and become a risk. Even more shocking is the loaned money is often redeposited back into the system allowing even more money to be lent to potential borrowers. This stretches the money supply and is the major cause of inflation.

To have MindArk have more then 47% of our money in reserve is pretty amazing and as far as the drop from 86% down to 47% thats most likely because of the development costs of CryTropia. After it is implemented and new money is flowing into EU I am sure they will steadily increase the reserves they had once again.

/Napo
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Remember that MA is not a bank. For banking system, there is a reserve bank, who will lend money to those commercial banks for a lower interest rate. MA does not have that 'reserve bank'.

Comparing MA to real bank is not appropriate.
 
1st: Youre all talking someone would buy MA if things got grim. Do you think that certain someone would hold ingame PED a liability? :laugh:

2nd: you agree everytime you enter - only your last 6 mth deposits would be considered

3rd: that is cash on their bank account (as far as I understand). IMO they have too much cash...

4th: ... and most important ... PED is worth $$ not because G8 agreed so. But because: 58 employee ltd. company said so :laugh: Its up to you to trust them...

I.

P.S.

To OP: you re-discovered the wheel m8...
 
Igorl said:
To OP: you re-discovered the wheel m8...
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sometimes it's good to remind everyone a wheel is a circle, not a square. I get the feeling some of us are forgetting it from time to time :D
 
coubo said:
sometimes it's good to remind everyone a wheel is a circle, not a square. I get the feeling some of us are forgetting it from time to time :D
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I know I forget from time to time, and btw, your post was like a breath of fresh air :)
 
nlnforever said:
Remember that MA is not a bank. For banking system, there is a reserve bank, who will lend money to those commercial banks for a lower interest rate. MA does not have that 'reserve bank'.

Comparing MindArk to real bank is not appropriate.
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Well of course MA is not a bank. :rolleyes:
However it is logical to make a comparison between MindArk's system and a banks:
  • They both take in money. ("Deposits")
  • They both are trusted with holding on to it for a while.
  • They both are expected to be able give their customers their balance back if they choose to withdraw.

I also know that there are many differences:
  • Money given to MindArk is backed by their Corporation, while money given to a Bank is backed by the government.
  • MindArk also doesn't pay us an interest rate for money deposited while a Bank does.

Anybody with a head on their shoulders knows that. :laugh:
To say that "Comparing MA to real bank is not appropriate" is just downright silly. :silly2:

The point I was trying to make is that a commonly excepted tradition of the modern banking system is to keep 10% of the deposits on reserve while loaning the rest out to borrowers. This means if everyone wanted to withdraw at the same time they would get their money, but it would only be worth 10% as much as it used to be because the Federal Reserve would have to put more money in circulation to cover it. Comparing this to the 46% that MA would be able to pay back makes MindArk's balance sheet, although a little scary, look more stable on paper. That's just my opinion, take it or leave it. :D

/Napo
 
xpoptartx said:
To say that "Comparing MA to real bank is not appropriate" is just downright silly. :silly2:

The point I was trying to make is that a commonly excepted tradition of the modern banking system is to keep 10% of the deposits on reserve while loaning the rest out to borrowers. This means if everyone wanted to withdraw at the same time they would get their money, but it would only be worth 10% as much as it used to be because the Federal Reserve would have to put more money in circulation to cover it. Comparing this to the 46% that MA would be able to pay back makes MindArk's balance sheet, although a little scary, look more stable on paper. That's just my opinion, take it or leave it. :D

/Napo
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Call me downright silly then ;)

The banks reserve is set by law and not by "excepted tradition" as you say. Banks are strictly regulated and provide financial services. If a bank needs liquidity in a hurry they can borrow from the central bank and other banks, in extreme cases this could drive interest rates up. The central bank can try to counter this by lowering interest rates making more money available, which may cause inflation or devaluation of your money (as you indicate in your post).

What has this got to do with a company providing an entertainment service with a graphical platform?

MA does not have access to loans in the size or terms that banks do, if they will be in trouble they will go bust and thats it. MA are calling their development costs fixed assets and use deprecation techniques to value it, this may be valid creative accounting but has nothing in common with the kind of assets a bank holds. Some of the bank's assets may not be liquid or may even be worthless at time like this, but a large part of it will be returned to the bank with interest, whereas MA's platform is worthless in the long run if the company gets in trouble.

And despite the strict regulation, we are now seeing what can happen to banks and their assets, at this time serious regulation changes are being considered.

So again, comparing MA to RL banks is irrelevant and proves nothing.
 
xpoptartx said:
Well of course MA is not a bank. :rolleyes:
However it is logical to make a comparison between MindArk's system and a banks:
  • They both take in money. ("Deposits")
  • They both are trusted with holding on to it for a while.
  • They both are expected to be able give their customers their balance back if they choose to withdraw.

I also know that there are many differences:
  • Money given to MindArk is backed by their Corporation, while money given to a Bank is backed by the government.
  • MindArk also doesn't pay us an interest rate for money deposited while a Bank does.

Anybody with a head on their shoulders knows that. :laugh:
To say that "Comparing MA to real bank is not appropriate" is just downright silly. :silly2:

The point I was trying to make is that a commonly excepted tradition of the modern banking system is to keep 10% of the deposits on reserve while loaning the rest out to borrowers. This means if everyone wanted to withdraw at the same time they would get their money, but it would only be worth 10% as much as it used to be because the Federal Reserve would have to put more money in circulation to cover it. Comparing this to the 46% that MA would be able to pay back makes MindArk's balance sheet, although a little scary, look more stable on paper. That's just my opinion, take it or leave it. :D

/Napo
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Sorry, but I am a Business Student, and I have adequate knowledge to know how banking system works. You should just research more about it.

Commercial banks get the money from 'Reserve Bank'. If the reserve ratio is 10%, whenever a bank get a deposit of 1$, It can borrow 9$ from reserve bank to make a loan to its customers. The interest rate of reserve bank ofc is less than the interest rate of the commercial banks.

You must understand that Banks can get money from Reserve Bank whenever they get a deposit from customers. Got it?

You were wrong about the 'reserve ratio'. Base on your understanding, whenever a customer make a 1000$ deposit, the Bank would keep 100$ and lend out 900$. You are wrong.

Whenever a customer make a 1000$ deposit, the Bank can borrow 9000$ from Reserve Bank, and lend that 9000$ to customers.

The model can be simple like this:

Reserve Bank --money--> Commercial Banks--money--> Customers

Commercial Banks earn profit from the gap between those two interest rates. Ofc it is more complicated in real life, but the basic concept is that. You just did not know about how banking system works.

You can read book like 'Macroeconomic', and read the 'How banking system work' chapter. You will see that the total money in a banking system is multiplied by 1/Reserve Ratio.

For Example: when the ratio is 20%, the total money of the whole system can be multiplied by 5 over time. That's how we are getting more and more money in banking system.

Back to MA case, the total asset of this game will never exceed the total deposits from players. The system cannot generate more cash unless MA uses the deposits to invest in other activities.
 
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nlnforever said:
Sorry, but I am a Business Student, and I have adequate knowledge to know how banking system works. You should just research more about it.

Commercial banks get the money from 'Reserve Bank'. If the reserve ratio is 10%, whenever a bank get a deposit of 1$, It can borrow 9$ from reserve bank to make a loan to its customers. The interest rate of reserve bank ofc is less than the interest rate of the commercial banks.

You must understand that Banks can get money from Reserve Bank whenever they get a deposit from customers. Got it?

The model can be simple like this:

Reserve Bank --money--> Commercial Banks--money--> Customers

Commercial Banks earn profit from the difference between those two interest rates. Ofc it is more complicated in real life, but the basic concept is that. You just did not know about how banking system works.

You can read book like 'Macroeconomic', and read the 'How banking system work' chapter. You will see that the total money in a banking system is multiplied by 1/Reserve Ratio.

For Example: when the ratio is 20%, the total money of the whole system can be multiplied by 5 over time. That's how we are getting more and more money in banking system.

Back to MA case, the total asset of this game will never exceed the total deposits from players. The system cannot generate more cash unless MA uses the deposits to invest in other activities.
Click to expand...

This reminds me of that time I had to be Iran at a Model United Nations conference. :laugh: Oh well...

Hmm, is it just me or did you further prove my point? :)

What I've attempted to explain is that MindArk has a fixed amount of cash that they have at this very moment which amounts to 46% of the total that could be withdrawn. Banks on the other hand have only so much in cash reserves while the rest is "borrowed" from the federal reserve who creates it out of thin air. This increases the money supply and causes the value of your money to decline. That's all I was trying to say. I don't care about laws or interest or the federal reserve system or any of that other mumbo jumbo. I was just trying to make a simple abstract comparison between MindArk and a Bank.

I will now back out of this discussion as I think we have hijacked this thread and I would hate for it to get locked. :laugh:

/Napo
 
xpoptartx said:
Well of course MA is not a bank. :rolleyes:
However it is logical to make a comparison between MindArk's system and a banks:
  • They both take in money. ("Deposits")
  • They both are trusted with holding on to it for a while.
  • They both are expected to be able give their customers their balance back if they choose to withdraw.
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Actually...... no.

They both take in money, yes.

A bank is entrusted with your money, MA according to the EULA was given your money and it is now their money.

A bank is expected to be able to give their customers their balance back, MA is under no obligation to give back part or whole of any money given to them.




And yes, I've deposited, and yes, I've withdrawn, and yes, first and foremost I play a game, I don't make the foolish assumption that it is some sort of investment.. :cool:

-Remmie
 
xpoptartx said:
Hmm, is it just me or did you further prove my point? :)
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i dont think so. its a subtle yet significant difference. with the "Bank keeps 10% of deposits and loans the rest" model, the bank can and will lend 90% of its cash reserve, with the result that it is very highly exposed. with the "Bank can borrow 90% of the value of its deposits from the central bank" model, the bank may be able to borrow that amount though it does not in practice for any period of time. Its all about liquidity, the bank borrows money from the central bank on 3month terms and lends on 1-25 year terms. I think the 10% reserve misunderstanding has been perpetuated by a viral youtube conspiracy propaganda vid, which i knew instinctively that it wasnt right, and thank nlnforever for the clearer explaination.
 
When you talk about banking, you should talk about a group of banks. A banking system should be viewed as a whole, not an individual bank.

When a ANZ bank has a loan of 1m$ of USD to its customers. Do you think where those money would go? Those 1m$ of USD will be deposited into other banks. The key point is here. Money is not like thin air as you said so, xpoptartx. It does not disappear. When bank A gives a loan to its customer, those loans will become deposit in bank B. Then bank B can be able to give more loan to its customers. Again, those new loans will become deposit in bank C.

MA system does not work like that. It's not as simple as that money comes in Bank and money will go out. xpoptartx, please read our posts more carefully.

Back to the topic: If MA is only able to cover 45% of the TT value, it's really shocking. In the past, I thought that MA alway covered at least 90% of the TT value, and they earned profit from 'fee', etc. But now, we can clearly see how MA treats our money.

I do not think we hijack this thread. Those explanations are necessary because not all of us understand how banking system works. Then, when they compare MA to Bank, they might feel that MA is still good. It's not appropriate. EU is seriously 'high risk investment' now when MA cannot cover 100% of the TT value.
 
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Seeing last couple weeks avg return looks like MA balance will be like 180% in no time so if yall have any ped left itll be safe lol
 
Back to MA case, the total asset of this game will never exceed the total deposits from players. The system cannot generate more cash unless MA uses the deposits to invest in other activities.[/QUOTE]

Wrong statement there, MA can generate more free cash by selling more hangars, building, pawnshops, land area, mod fap.....etc from those buyers. Now all those buyers need to do are to find more idiots willing to invests uless those buyers had diff. EULA that we don't know about. :rolleyes:

where did your money go:
overhead fee: i.e staff, PFC, utilities bills, support case......etc.
gov't taxes
transaction fees
equipment
upgrades i.e. Cry2
Macro bigass playcheck
Pre-gold players
big ATH for those smart enough to withdraw
non-depositors smart enough to withdraw
bad management

MA is not a bank period. No point of discussing in banking system.
What my points? MA just ranout of suckers, trust me I am one of those but not anymore.
 
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