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Question / Theory About Keys


Wynthnos

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A lot of people are talking about the fall of the keys, and I don't know if anyone has made a post like this already. But I want to kind of theorize and show why I don't believe the fall of the keys is actually happening. If I'm being stupid and I miss something that contradicts my 'theory', tell me, please.

 

So basically, people are saying that because of the fall in the value of keys, they are going to crash in a similar way that buds did. But the monetary value won't change unless Valve changes it again, this is the hinge and basis of what I am saying. When keys inevitably drop, then metal should rise to equalize the value of them. But because of the stable £1.90 price on the community market (sorry I'm British) and similar price in the Mann Co. Store, then the actual monetary value can't drop, metal should just cost more.

 

The reason keys raised in the first place was because of a disparity in the supply:demand of metal, with there being no money sink for it to go into, it just was left in the economy. There was no sensible place for metal to go, and there still isn't. This meant that the market was filled up with metal, and so items went up (in terms of metal) to combat this. Because there is still nowhere for metal to go, other than just being flushed through the economy over and over, the value of metal can't change, otherwise, there will be instability because metal will become more expensive while being just as plentiful.

 

In short, keys shouldn't be able crash in the current circumstance unless Valve creates a metal sink or increases the monetary value of keys because of the supply and demand of the metal. The question was, is this right?

 

As I said, if I'm missing anything, please tell me. I don't take economics so this is probably not a very good understanding of the TF2 economy, but I try to learn.

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Basically yes. Metal and keys are two separate markets, people at the key and beyond level have no need or use for metal. Metal comes into the system near infinitely at no cost but time, keys only enter when someone buys from the store.

 

And keys went up because the market is extremely competitive and people were overbidding each other a scrap at a time to sell/buy first. Plus with all the bots running the key market 24/7 there's always supply available, but the bots work each other as well to cull outliers.

 

Keys are basically real money because real money must be spent to create them. Metal is internet points you get from idling.

 

I think the current key prices are savage for anyone not already heavily invested or willing to spend real money. It's not keys that change, it's metal since there's always more coming in, but there's nowhere for it to go. The rate of metal gain has only gone down with time since you can't idle for 8 hours then get all your drops at once anymore, but everything in the system before that is still here.

 

One can take advantage of this, though. Since many items are priced in metal, if you have keys they can buy a lot in metal-priced items. The best ones are market compatible. Spend a key to buy 5 stranges you can sell on SCM for 80 cents each. Small profits, smaller than unusual traders care to work for, but they're still there.

 

This is probably too long of a post.

 

Edit: also re:buds, they were an unofficial currency, like bills. When they became market compatible, the market flooded with them because so many people that were not traders had them, and did not want them. They aren't consumable like keys, so they never go away. Buds/bills were also a workaround for the 8 item trade limit that was initially in place.

Edited by PlusEighteen
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56 minutes ago, PlusEighteen said:

Metal and keys are two separate markets, people at the key and beyond level have no need or use for metal.

This isn't entirely true because a lot of the profit from running a bot comes from basically skimming small amounts of metal off of each trade and going for a massive number of trades each day. For example, I make around 1000 trades per day on the bot I own, but most of the margins are pretty small.

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3 hours ago, Axle Change said:

This isn't entirely true because a lot of the profit from running a bot comes from basically skimming small amounts of metal off of each trade and going for a massive number of trades each day. For example, I make around 1000 trades per day on the bot I own, but most of the margins are pretty small.

Well, with bots the effort required is almost zero, so you can go for much smaller margins, especially with no tax to account for. That's the whole reason you'd run a bot, like most of the keybots here on backpack that are only making a scrap or even a weapon each trade.

Yeah, you have to accept metal when you're dealing with fractions of keys. If you're buying an item at 7.55 refined and selling at 7.66, keys are never in the picture, but if you're buying at 7.5 keys and selling at 8, the metal is just used as a key fraction and that amount will fluctuate with the key:metal ratio here.

The average player doesn't make 1000 profitable bot trades a day, they get 8~ weapon drops a week.

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