Info: Entropia PED flow and Loot Pool basics explained

e-lite · Feb 8, 2016

Vedder said:
You have no idea what you are talking about, do you?
In my country (Denmark) - We have our own currency, which is tied at a fixed rate to the Euro.

You need to get out more and troll less.

This is true for ALL countrys and currency. The actual currency, coins and bills is only placeholders for resources such as gold and diamonds.

An exception would be examples where some countrys in history which has printed and minted more bills and coins than they actually have resources to back it with.

Count Joe · Feb 8, 2016

Vedder said:
You have no idea what you are talking about, do you?
In my country (Denmark) - We have our own currency, which is tied at a fixed rate to the Euro.

You need to get out more and troll less.

whats up with all this talk about trolls? I reckon u are the troll for not reading and trying do understand?

and your cleary didnt understand what I meant. Read the post from Firth first and then look at what I wrote

Konve · Feb 8, 2016

e-lite said:
(1) This is true for ALL countrys and currency. (2) The actual currency, coins and bills is only placeholders for resources such as gold and diamonds.

(3) An exception would be examples where some countrys in history which has printed and minted more bills and coins than they actually have resources to back it with.

1. All currencies are tied to another currency? No, they are not. For example the Swedish krona is free flowing and is bought and sold at whatever rate the market puts on it.
2. No, they are not. They used to be ages ago, but not today.
3. If you walk into a bank and take out a loan there are no gems nor any gold to back up that money you just withdrew. The only thing backing your loan is your dept.

Fifth · Feb 8, 2016

Count Joe said:
whats up with all this talk about trolls? I reckon u are the troll for not reading and trying do understand?

and your cleary didnt understand what I meant. Read the post from Firth first and then look at what I wrote

No actually Vedder is correct. It's you who doesn't understand what currency (any currency!) is and how it works.

If you travel to Denmark you exchange your euros or dollars or pounds to Danish krones (DKK).
If you travel to Entropia Universe you exchange your € or $ or £ to Project Entropia Dollars (PED).

There's no difference, it's exactly the same thing. The simplest things are sometimes hardest to grasp!

Edit: Konve is also correct, but all this is unimportant details in this context. The basic principle remains the same.

e-lite · Feb 8, 2016

Konve said:
1. All currencies are tied to another currency? No, they are not. For example the Swedish krona is free flowing and is bought and sold at whatever rate the market puts on it.
2. No, they are not. They used to be ages ago, but not today.
3. If you walk into a bank and take out a loan there are no gems nor any gold to back up that money you just withdrew. The only thing backing your loan is your dept.

Well, we are both right and wrong. Today's economy is "ballooned" for all county's, meaning the actual coins and bills are over booked and not all is backed by real resources but rather bonds and loans.

Count Joe · Feb 8, 2016

Fifth said:
No actually Vedder is correct. It's you who doesn't understand what currency (any currency!) is and how it works.

If you travel to Denmark you exchange your euros or dollars or pounds to Danish krones (DKK).
If you travel to Entropia Universe you exchange your € or $ or £ to Project Entropia Dollars (PED).

There's no difference, it's exactly the same thing. The simplest things are sometimes hardest to grasp!

Edit: Konve is also correct, but all this is unimportant details in this context. The basic principle remains the same.

I know exaclty how are currency work but PED arent a currency like a dollar och Danish krone.
PED is a product that you buy and spend.

Tell me the differens between peds and giftcards?

you dont even own your peds on you card ffs.

Have you ever heard the someone say "we have a real cash economy" beside from EU?

Have u even heard of an economy where the goverment or whatever wants its ppl to lose their money so they can buy more of their currency? and also the goverment profits on it and do nothing to help their ppl to get a better livingstandard?

Dont be so religious over what Mindark pops out from their marketing apartment

Fifth · Feb 8, 2016

Count Joe said:
Tell me the differens between peds and giftcards?

It might be problematic to sell back your gift cards?

Count Joe said:
you dont even own your peds on you card ffs.

Well, if u want to put it this way. In a sense u don't own your peds. But then, in the exact same sense u don't really own the cash that's in your wallet either. Next moment it might be just a piece of paper worth nothing. Ppl in Somalia know exactly what I mean...
On the other hand, if in doubt u can make a test anytime. Withdraw those peds. If the $$ arrives to your bank account then u owned those peds afterall, right?

Anyway. One might argue that ppl who control the banking system can trigger hyperinflation or even cause a global recession in order to grab all u were thinking u had, in one go. Kinda like market manipulators in EU but on a slightly larger scale. :laugh:

That's a very pessimistic world view for sure. And a little paranoid perhaps. Then again, among all those weird global conspiracy theories out there it's prolly one of the most believable.

Count Joe · Feb 8, 2016

Fifth said:
It might be problematic to sell back your gift cards?

Well, if u want to put it this way. In a sense u don't own your peds. But then, in the exact same sense u don't really own the cash that's in your wallet either. Next moment it might be just a piece of paper worth nothing. Ppl in Somalia know exactly what I mean...
On the other hand, if in doubt u can make a test anytime. Withdraw those peds. If the $$ arrives to your bank account then u owned those peds afterall, right?

Anyway. One might argue that ppl who control the banking system can trigger hyperinflation or even cause a global recession in order to grab all u were thinking u had, in one go. Kinda like market manipulators in EU but on a slightly larger scale.

That's a very pessimistic world view for sure. And a little paranoid perhaps. Then again, among all those weird global conspiracy theories out there it's prolly one of the most believable.

I cant speak for all stores but i have in several occasions got money back it the was something left on the giftcard. Just like EU.

Well even if your money would have zero value its still yours and if someone took it would be stealing.

No, mindark lets you sell them back but in game they can take them and you could do nothing about it.

Fifth · Feb 8, 2016

Count Joe said:
I cant speak for all stores but i have in several occasions got money back it the was something left on the giftcard. Just like EU.

Suppose the giftcard always works both ways (can sell / can buy), no matter how much money left on it.
If so then we can consider gift card a freely convertible currency inside this store. Just like EU.

Well it doesn't really matter how I explain it, does it? Your opinion is not based on logic at all.
There's no point in arguing with religious ppl.

Count Joe said:
No, mindark lets you sell them back but in game they can take them and you could do nothing about it.

Hah, that losers talk. Speak for yourself, it sure doesn't apply to me. :smoke:

Count Joe · Feb 9, 2016

Fifth said:
Suppose the giftcard always works both ways (can sell / can buy), no matter how much money left on it.
If so then we can consider gift card a freely convertible currency inside this store. Just like EU.

Well it doesn't really matter how I explain it, does it? Your opinion is not based on logic at all.
There's no point in arguing with religious ppl.

Hah, that losers talk. Speak for yourself, it sure doesn't apply to me.

Im the religious one? Im not the one that believe everything your god mindark tells you,

hehe Im for sure not the looser when you say that the EULA doesnt apply to you

Vedder · Feb 9, 2016

Count Joe said:
Im the religious one? Im not the one that believe everything your god mindark tells you,
...

I don't believe PED to be a currency because MA say so, but because it makes sense.

All currencies are just proxies or placeholder for other values. Their only true value is based on trust and expectations that you can exchange the currency for other things at a later time.

Is MA is less trustworthy to back their currency than Argentina is with theirs? Or North Korea?
Maybe. It's pure speculation. But it's all currencies and they only have a value because people believe they have.

Maybe you should read this: https://en.wikipedia.org/wiki/Digital_currency

Wiki said:
Digital versus traditional currency - Most of the traditional money supply is bank money held on computers. This is also considered digital currency. One could argue that our increasingly cashless society means that all currencies are becoming digital (sometimes referred to as “electronic money”), but they are not presented to us as such.[6]

Count Joe · Feb 9, 2016

Vedder said:
I don't believe PED to be a currency because MA say so, but because it makes sense.

All currencies are just proxies or placeholder for other values. Their only true value is based on trust and expectations that you can exchange the currency for other things at a later time.

Is MA is less trustworthy to back their currency than Argentina is with theirs? Or North Korea?
Maybe. It's pure speculation. But it's all currencies and they only have a value because people believe they have.

Maybe you should read this: https://en.wikipedia.org/wiki/Digital_currency

Ingame it is a currency for the entropians.
But, its a product also that Mindark is selling. As long as mindark keeps sell PED and the "economy" constantly drains from PED because Mindark whats to sell new ones, I see it more of a product then a currency.

Are there any other digital currency out there with equal setup as PED? where there is a company owned currency where the customers keep buying new ones?

and its not speculation. they dont have a dedicatad reserve to back up PED.. 100% sure. No doubt about it!

forgo · Feb 10, 2016

Count Joe said:
and its not speculation. they dont have a dedicatad reserve to back up PED.. 100% sure. No doubt about it!

Why would they even need to? If people want to buy the items existing they(players) will put more in to cover it.

It is not MA's responsibility to cover what you perceived as a fair markup, in fact their stake is limited only to tt value, where they would need far far less than people think to cover all bets.

And even a few years ago this was legally changed, they are only responsible for the last 6 months of deposits per account. and that is it, not even TT value is guaranteed anymore.

So don't worry about it, yeah they don't have the money to cover all withdraws if it ever happened.

You need to sell your stuff to a player and covert back to PED first. If everyone was quitting you simply wouldn't unload your stuff. Not MA's problem.

Not something MA will ever be concerned with or impacts anything financially.

MA could fold and you will ever only be entitled to your most recent deposits.

Vedder · Feb 10, 2016

Count Joe said:
Vedder said:

...
Is MA is less trustworthy to back their currency than Argentina is with theirs? Or North Korea?
Maybe. It's pure speculation.
...

Click to expand...

...
and its not speculation. they dont have a dedicatad reserve to back up PED.. 100% sure. No doubt about it!

You seriously think that Argentina has that? Or even the US with their billion (or trillion) dollar debt to China?
That's doesn't change the fact that they have a currency.

Count Joe · Feb 10, 2016

forgo said:
Why would they even need to? If people want to buy the items existing they(players) will put more in to cover it.

Dont understand what you mean by this?

forgo said:
It is not MA's responsibility to cover what you perceived as a fair markup, in fact their stake is limited only to tt value, where they would need far far less than people think to cover all bets.

Never said anything about cover markup. I wrote no dedicated backup for PEDs

forgo said:
And even a few years ago this was legally changed, they are only responsible for the last 6 months of deposits per account. and that is it, not even TT value is guaranteed anymore.

You write legally. Mindark has legal obligation about what happens ingame. You sign of all you rights when u logg in to EU. They say that to build confidence in to the game but there are no laws or whatever they bind them to it.

forgo said:
So don't worry about it, yeah they don't have the money to cover all withdraws if it ever happened.

You need to sell your stuff to a player and covert back to PED first. If everyone was quitting you simply wouldn't unload your stuff. Not MA's problem.

Not something MA will ever be concerned with or impacts anything financially.

MA could fold and you will ever only be entitled to your most recent deposits.

Whats your quote realy to me?

Im not worried about anything. Im more worried about they who think their PEDs are safe and belongs to them.
if MA would fold, you wouldnt get a thing.

Can ppl stop listen to what Mindark tells you and look at the fincanial statement instead and make up your mind.
Mindark can say whatever they want to us but to Skatteverket they cant.

Count Joe · Feb 10, 2016

Vedder said:
You seriously think that Argentina has that? Or even the US with their billion (or trillion) dollar debt to China?
That's doesn't change the fact that they have a currency.

its not about backing up the ped as a currency.

AS Mindark keep using deposit instead of buying, ppl tend to think that its like a bank which most have a part of the deposit money in "reserve" (im sure there is a better name for it" but Mindark dont need that as its not a bank. And they dont have that. The might have had it long ago but they dont now.

Konve · Feb 10, 2016

Count Joe said:
Dont understand what you mean by this?

Since most items have a markup, most times player A has to make a deposit in order to buy an item from player B. If B then withdraw the money Mindark went +/- nothing (sort of).

Coelacanth · Feb 18, 2016

Konve said:
But we aren't. E-lite says MA has all the ingame funds covered. They don't.

For example:

This is wrong. PED deposited are accounted for as MindArk assets as soon as they are deposited. What happens with the PED value once it's inside the game is another story. But the money belongs to MA the moment you deposit.

[Speculation]It is more likely that what you do with the PED inside the game determines the share of the money between MA and the planet partners.

Konve has it nailed, I think.

The casino chip-buying example initially alluded to was incorrect. When you buy $1000 of casino chips, the casino just made $1000. The PLAYER didn't gain anything, yet, other than the ability to use those chips for services. With usual casino-style odds of winning, ultimately ALL of those chips will be lost by the player to the casino, the only thing that varies is the amount of time. The luckier player will play longer before the chips run out; the unluckier player will run out very quickly. The huge jackpot win is the exception to the rule and exception to the statistics.

So for the great majority of casino players, you give the casino $1000...and ultimately you walk home with nothing to show for it except for the fun and entertainment of gambling.

Fifth · Feb 19, 2016

Coelacanth said:
Konve has it nailed, I think.

Nah, not really.

Definition of Contingent liability:

"A contingent liability is a potential obligation that may be incurred depending on the outcome of a future event. A contingent liability is one where the outcome of an existing situation is uncertain, and this uncertainty will be resolved by a future event."

Pretty clear, isn't it?

Now look at this:

Konve said:
PED deposited are accounted for as MindArk assets as soon as they are deposited. What happens with the PED value once it's inside the game is another story. But the money belongs to MA the moment you deposit.

The trick is to keep repeating "belongs to" and "accounted for" like a mantra until the reader gets confused and starts thinking ok, maybe contingent liability is not really a contingent liability? :eyecrazy:

Well ofc the money is on MA's account if u just transferred it there. Where else should it be? :laugh:

Count Joe · Feb 19, 2016

Fifth said:
Nah, not really.

Definition of Contingent liability:

"A contingent liability is a potential obligation that may be incurred depending on the outcome of a future event. A contingent liability is one where the outcome of an existing situation is uncertain, and this uncertainty will be resolved by a future event."

Pretty clear, isn't it?

Now look at this:

The trick is to keep repeating "belongs to" and "accounted for" like a mantra until the reader gets confused and starts thinking ok, maybe contingent liability is not really a contingent liability? :

U still havent read the fincial statement I see.

Konve is correct and it also explain why ped is a contingent liability.

It pretty much mean that they have a responsability to reimburst unspend peds when u want to withdraw

MA has stated in their financial statement that deposit Money is considerd an income. Not a debt. What to companys user their income for.

When u deposit money in to a back account - does the bank consider it a income? no they dont coz its a deposit.

From the finacial statement:
Unconsumed user holdings:
MindArk defines operating income from Entropia Universe as the net amount of provided and withdrawn funds by users.

Participants in Entropia Universe can at any time request a reimbursement of all their unconsumed assets in the virtual currency PED. MindArk then reserves the corresponding amount in SEK as an accrual.

It is not possible to determine whether a certain amount of PED at any given moment will be withdrawn from Entropia Universe or spent on activities within the virtual environment. MindArk therefore consider all unconsumed funds in PED as a contingent liability.

Haruto Rat · Feb 19, 2016

This reminds me of the story of a guy who went to a communist party congress and learned several interesting and useful things there - in particular, that Marx and Engels were two different persons but Glory (to) CPSU was not a person at all.

In a similar manner, many people, if only they bothered to google 'double-entry bookkeeping for dummies', could learn that assets and liabilities are different sides of the balance sheet (and any transaction with the outside world needs to be recognized in both) and that balance sheet and income statement are, well, different things.

e-lite · Feb 19, 2016

Konve said:
But we aren't. E-lite says MA has all the ingame funds covered. They don't.

No, I have never said that. I said the exact opposite.

Fifth · Feb 19, 2016

Haruto Rat said:
... assets and liabilities are different sides of the balance sheet (and any transaction with the outside world needs to be recognized in both) and that balance sheet and income statement are, well, different things.

Count Joe said:
MA has stated in their financial statement that deposit Money is considerd an income. Not a debt. What to companys user their income for.

When u deposit money in to a back account - does the bank consider it a income? no they dont coz its a deposit

Let's try the practical approach. Let's see what actually happens behind those nice words and declarations.

What does a bank do with your money? The moment u deposit, it's invested into something or given out as a loan to somebody else. The bank is using it in it's everyday business.
Money has to roll, money has to make more money. It would be stupid not to do that.

What does MA do with your money? The moment u deposit, it's invested into something or used in MA's everyday business.
Money has to roll, money has to make more money. It would be stupid not to do that.

See any difference? There's none...

What happens when u decide to withdraw your funds?
In both cases u will get your money back. Again, no difference.

There is a difference with guarantees thou. Banks are usually backed up by governments (to a degree), MA doesn't have this additional safety net.
(In theory, they could prolly get it with their MindBank idea? But, I'm not qualified to assess how probable this scenario is or isn't.)

Count Joe · Feb 19, 2016

Fifth said:
Let's try the practical approach. Let's see what actually happens behind those nice words and declarations.

What does a bank do with your money? The moment u deposit, it's invested into something or given out as a loan to somebody else. The bank is using it in it's everyday business.
Money has to roll, money has to make more money. It would be stupid not to do that.

What does MA do with your money? The moment u deposit, it's invested into something or used in MA's everyday business.
Money has to roll, money has to make more money. It would be stupid not to do that.

See any difference? There's none...

What happens when u decide to withdraw your funds?
In both cases u will get your money back. Again, no difference.

ffs firth, do u believe that yourself?

Tell me one bank that use deposit money to pay their staff? And I mean the moment that you deposit 100 dollar they take all the 100 dollar to pay salery, expenses and profit?

Why dont u comment the text I took from the financial statement?

Count Joe · Feb 19, 2016

Haruto Rat said:
This reminds me of the story of a guy who went to a communist party congress and learned several interesting and useful things there - in particular, that Marx and Engels were two different persons but Glory (to) CPSU was not a person at all.

In a similar manner, many people, if only they bothered to google 'double-entry bookkeeping for dummies', could learn that assets and liabilities are different sides of the balance sheet (and any transaction with the outside world needs to be recognized in both) and that balance sheet and income statement are, well, different things.

Liabilitys are not even in the balance sheet.

Transactions with the outside world? Do u mean that all the transactions inside EU are suposed to be in the incomestatment and/or balance sheet?

atomicstorm · Feb 19, 2016

Count Joe said:
ffs firth, do u believe that yourself?

Tell me one bank that use deposit money to pay their staff? And I mean the moment that you deposit 100 dollar they take all the 100 dollar to pay salery, expenses and profit?

Why dont u comment the text I took from the financial statement?

Mindark only gets money when it's been cycled through the system. They don't pay staff with deposits. Period.

Anything else is not only wrong but very misleading.

Count Joe · Feb 19, 2016

atomicstorm said:
Mindark only gets money when it's been cycled through the system. They don't pay staff with deposits. Period.

Anything else is not only wrong but very misleading.

you are 100% wrong! ones again, check the finacial statement!

Mindarks words
Corporate revenues consist of the net sum of deposited and withdrawn amounts from Entropia Universe
made by users. The net revenues are presented in the income statement after deduction of reimbursements
requested by participants in Entropia Universe.

Fifth · Feb 19, 2016

Guy doesn't know anything about finances. The practical approach doesn't seem to work either.

Well, at least we tried.

Konve · Feb 19, 2016

My main problem with this thread is that it has "explanation" in the title. Like this is somehow fact. If the premise was that this is an open topic and E-lite was just presenting his wild ideas - then fine. But I see nothing more then pure speculation presented as fact. In my humble opinion the title should be changed to reflec that this is just guesswork.

e-lite said:
No, I have never said that. I said the exact opposite.

I still say you did.

If you deposit $1000 USD (10K PED) they are not accounted for as MindArk assets [...]

They are. But they are not account for as a (regular) liability.

The "chips" (peds) in your pocket are not accounted for in the winnings pool (MA actual assets).

When you say this it sounds as if you mean that PED in your pocked does not belong to MA. But they do. They really do.

I honestly think the problem is that you are not differentiating between Mindark's assets and what goes on inside Entropia.

Like this:

You deposit 100 PED = MA has an income of 10 PED that day.
MA now has 10 USD on their bank account.
MA spends 10 USD on salaries.
MA now has 0 USD on their bank account but inside EU there are still 100 PED.

The big question:
If you kill a mob do you get any loot?
If you kill a mob, can you score an uber loot?
Can you hunt long time and gain a slow TT profit?

Konve · Feb 19, 2016

(By the way. This is not off topic. It has everything to do with understanding MA and PED.)

I'll play ball...

Fifth said:
What does a bank do with your money?

You're already off track. MA is not a bank. But ok, let's continue.

Fifth said:
What does a bank do with your money? The moment u deposit, it's invested into something or given out as a loan to somebody else. The bank is using it in it's everyday business.
Money has to roll, money has to make more money. It would be stupid not to do that.

Correct!

But you didn't explain what the banks accounting looks like. It looks like this:

The bank is brand new. For simplicity we say the bank doesn't owe the owners anything (which is sort of impossible, but this is an example to make a point).

Day 1: Bank collects $1000 in deposits.
Accounting day 1:
Profit = 0
Loss = 0
Bank account = $1000
Other assets = 0
Liabilities = $1000
Contingent liabilities = 0

Day 2: Bank gives out a $1000 loan.
Accounting day 2:
Profit = 0
Loss = 0
Bank account = 0
Other assets = $1000 (someone owes the bank money)
Liabilities = $1000
Contingent liabilities = 0

Day 3: Bank collects $1 of interest on the loan.
Accounting day 3:
Profit = $1 (win!)
Loss = 0
Bank account = $1
Other assets = $1000
Liabilities = $1000
Contingent liabilities = 0

Day 4: The loan is repaid
Accounting day 4:
Profit = $1
Loss = 0
Bank account = $1001
Other assets = 0
Liabilities = $1000
Contingent liabilities = 0

Day 5: Bank account holders withdraw all their money
Accounting day 5:
Profit = $1
Loss = 0
Bank account = $1
Other assets = 0
Liabilities = 0
Contingent liabilities = 0

SUMMARY: Banks make money from interest (and fees).

Fifth said:
What does MA do with your money? The moment u deposit, it's invested into something or used in MA's everyday business.
Money has to roll, money has to make more money. It would be stupid not to do that.

See any difference? There's none...

Nu-uh!!!! Look:

Day 1: MA collects $1000 in deposits.
Accounting day 1:
Profit = $1000
Loss = 0
Bank account = $1000
Other assets = 0
Liabilities = 0
Contingent liabilities = $1000

Day 2: Players spend half their PED inside EU.
Accounting day 2:
Profit = $1000
Loss = 0
Bank account = $1000
Other assets = 0
Liabilities = 0
Contingent liabilities = $500

Day 3: Players withdraw all their PED
Accounting day 3:
Profit = $500
Loss = 0
Bank account = $500
Other assets = 0
Liabilities = 0
Contingent liabilities = 0

SUMMARY: Mindark makes money from deposits.

Fifth said:
Guy doesn't know anything about finances. The practical approach doesn't seem to work either.
Well, at least we tried.

You owe me $200 for a private lesson in accounting.

atomicstorm said:
Mindark only gets money when it's been cycled through the system. They don't pay staff with deposits. Period.

Anything else is not only wrong but very misleading.

Look at what I explained about MA economics above. I don't give a shit if you want something else to be true or if MA said something about profit and decay ten years ago, nor do I care if you like me or not, just trust me on this.

This is not controversial. It just is like this.

FFS read this ten times:

Mindark's total assets is less than the amount of PED TT value inside Entropia Universe. The company itself is worth less than the PED in the game it controls. It's always been like this. (Not sure if actually "always", but for a loooong time.) :wise:

Info: Entropia PED flow and Loot Pool basics explained

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