Are bots inflating the value of keys?

[Sugoni™ ⇋HG-A⇌]

So as we all know key prices have been increasing to ridiculous amounts.

 

Something i'm not sure how many people have noticed is that when key prices go up, some of the first people to increase their prices are the network of trading bots. And what do they do every time? buy for about 5 or 6 scrap above the new bptf price.

 

I feel like this hyperinflation is due to a maniuplated market, and obviously I feel like something should be done about it but i'm not sure what can be done.

 

My question is: Should we try and fix this?

Should the bots be allowed to infate the market like this? This is the highest price keys have ever been with the price increasing faster than ever before, and it's mostly not due to the majority of players, and while I don't think this is riht in the slightest I want to hear the opinions of everyone else.

 

 

p.s. Please don't fill this thread with "Yeah i agree key prices are too high" and very simple complaints such as that or something like "Well now i can't buy x cause i had x ref and it was worth a key but now key prices have gone up". I want this thread to be filled with a proper economics discussion for TF2, and possible fixes to how unstable the market has become in general.

 

p.p.s Identical thread on harpoon gaming (Harpoon.tf) forums for other views/opinions is located here , mostly to keep the discussion as wide as possible.

[Mengh.]

If you want someone to blame, blame the players.

 

Bot are raising prices because (human consumers) demand are willing to pay for keys at higher and higher rates, as with refined being more easily obtainable with the excess of weapons made from the already 'large' player base playing the game. Sellers act as firms, wanting to make profits from transactions, however, if they feel if there is a lack of demand at a price, they'll compete with other firms, often resulting in undercutting. As you have seen, this hasn't really been the case because people are still buying keys and keys with refined metal, keeping the price at a constant high.

 

However, it will reach a point where people will see that keys are too high, when compared to the amount of refined in circulation, which will cause a drop in key prices (based on refined). Only time will tell when this will be.

[polar]

I feel like this hyperinflation is due to a maniuplated market

 

Keys aren't really going up in value. Everything priced in keys is still the same value it has always been. Keys sell for the same amount in cash they have always sold for.

 

Refined is worthless and that is what is dropping relative to keys. You don't have to pay money for ref. Comes from free drops, and there is right now a huge surplus of it. Keys will keep going up as long as no one wants refined. Has nothing to do with bots which are only trying to meet the ferocious demand.

[NotWarlizard]

Why can't people realize that a price is at a certain price due to supply and demand. Bots don't gain anything by paying crazy prices if the demand isn't at the price they are buying/selling, they'll loose a ton of money if they try to manipulate the currency. If anything the crazy amount of bots out there regulate this very well since 1 person alone can't influence the economy.

[Pyotoru]

Only way to "fix" this situation is finding good way to use refined metal. Because right now there is too many refs so they are cheap and it only looks like key is rising. As someone said before metal is dropping which make false conviction that key is rising.

 

Only slution may come from Valve. They could make new crafting recipe with metal or trade up. That way there would be high demand on refs and some of them would be removed from market (crafted, traded up) so more people would try sell key fast to get metal and start crazy undercutting and key drop.

 

Edit: Also fact that valve didnt add any new cosmetics to drop and craft isnt helping. In past Valve was adding new cosmetics which were craftable, so it lowered number of metal - people trying to get low craft of new hat. But right now all new hats have grades and are not craftable.

Of course probably most people was using craft hats to craft new low crafts but still option of using 3 ref to get new low craft was possible.

[AlwaysBorn]

This isn't an issue that is caused by bots neither by players. This is simply how a virtual economy works.

Valve needs to find a new money sink or in this case metal sink, as long as valve doesn't find a new metal sink keys will cost more and more refined.

This is a very well know issue in virtual economies known as mudflation. 

 

Although, you have to raise the question if it's really that beneficial to find a new metal sink for Valve. When players purchase keys from the store they basically are able to get more items for their keys then they were ever before. If you follow this reasoning Valve should add a metal sack or something similar, where you can stack metal on eachother so we don't have to deal with trades containing over 300 refined anymore.

[Sugoni™ ⇋HG-A⇌]

These are all very good points honestly I don't know what I expected but... well damn.

 

I guess it would be a good idea to create some kind of metal sink, but what i'm curious about is during the christmas period when the amount of keys in existence increases and the amount of ref stays the same. Obviously after any holiday when there's a mass key drive keys will go down in ref, but will this be any sufficient kind of sink for the prices?

 

Also if valve were to create another metal sink, what do you think they should do?

I think valve being a money grabbing (Yet still very good despite the money grabbing) company need to think of a way for people to get more keys. I think if keys have a lower value in ref then people will be buying more keys and generally all of the community that are still in shock from the key rise will be... not exactly happy but probably more relaxed.

[Kote]

These are all very good points honestly I don't know what I expected but... well damn.

 

I guess it would be a good idea to create some kind of metal sink, but what i'm curious about is during the christmas period when the amount of keys in existence increases and the amount of ref stays the same. Obviously after any holiday when there's a mass key drive keys will go down in ref, but will this be any sufficient kind of sink for the prices?

 

Also if valve were to create another metal sink, what do you think they should do?

I think valve being a money grabbing (Yet still very good despite the money grabbing) company need to think of a way for people to get more keys. I think if keys have a lower value in ref then people will be buying more keys and generally all of the community that are still in shock from the key rise will be... not exactly happy but probably more relaxed.

Pretty much no matter how many keys exist they won't lose value until no one wants them, and everyone wants them.  You could have 10k new keys come into exist and there would probably be a very small effect.  Keys themselves are fine, ref are dying as a currency because it's ONLY used as a currency and no one is regulating it.  Think of TF2 as a country and ref as the currency.  The government of this country (Valve) will take the currency (ref) in and out of circulation as needed to avoid inflation.  However, the government of TF2 is just creating and creating with no regard for what the country actually needs.  This can be related to Germany around the early/mid 1920's where the currency lost over 85,000,000,000% of it's value.  Obviously it's not as drastic as this with ref, but you can see what I'm getting at.  The only way to regulate this would be to create a metal sink OR just disable crafting weapons for some time, but the second one would probably not work because it would be like a government just taking all the cash from people with no reimbursement.  I don't have a great idea of how to create a metal sink, but I would say making something like craftable stranges might do the trick.  As to your idea of key crafting, that would not increase the price of ref but decrease the price of keys.  Then the same thing that happened with ref will happen with keys, and we'll be screwed.  All in all, it's either up to valve to create a metal sink OR for a charity to do something like donate 0.1 cents for every hat crafted by you you donate.  Again, that probably wouldn't work, but whatever, there's nothing we can really do.

[oli.t678]

Keys are not really increasing in price, it's just that ref is dropping rapidly in price due to inflation. Back in the days when keys were 2.66, ref were a lot more than a meager $0.085. It's just that so much ref is being constantly created without any uses for them, and thus, they decrease in price due to the sheer amount of them.

[Mrs TS]

What I find odd is not the relation to keys vs refined, but refined in relation to items.

 

Back in the day, keys were 2.33-2.66, and regular craft hats were 1.33.....you would get 2 hats per key.   So, now that refined is what people consider worthless, why are hats still 1.33?   When refined goes down in value, basic economics SHOULD bring the 'cost' of everything based on that value up higher.   And dont go stating 'because hats drop'   I have gotten maybe 2 hat drops in the last year, if Im lucky.

[polar]

What I find odd is not the relation to keys vs refined, but refined in relation to items.

 

Back in the day, keys were 2.33-2.66, and regular craft hats were 1.33.....you would get 2 hats per key.   So, now that refined is what people consider worthless, why are hats still 1.33?   When refined goes down in value, basic economics SHOULD bring the 'cost' of everything based on that value up higher.   And dont go stating 'because hats drop'   I have gotten maybe 2 hat drops in the last year, if Im lucky.

 

Value on all hats goes down as the total number of hats out there increases. When keys were 2.33 ref, how many different hats were there compared to how many hats there are now? With all these updates giving so many new hats, the demand for any one hat drops. Most items will continue to go down in value over time. It's just that the drop is a lot more significant with unique hats since there are way more of those hats than there are players in the game.

[BankingBot]

We are bots *beep beep* i predict key price will stop rising at 28 ref and drop to 24 ref 2 weeks after that

[Mrs TS]

Value on all hats goes down as the total number of hats out there increases. When keys were 2.33 ref, how many different hats were there compared to how many hats there are now? With all these updates giving so many new hats, the demand for any one hat drops. Most items will continue to go down in value over time. It's just that the drop is a lot more significant with unique hats since there are way more of those hats than there are players in the game.

 

Keys were worth 18 refined only 7 months ago - http://backpack.tf/suggestion/5720aabbc440456e633b94aa Keys have now risen 50% in just that short time.  There have not been all that many new items in the last half a year that would offset all the older items dropping in value by such a large percentage in that short of a time.  

 

While I do believe supply and demand affects every aspect of what items are worth, refined as a whole is not as readily available from drops as it once was. In addition to Valve having killed off idling for the most part, a persons weekly drops would take typically 6-7 weeks for 1 refined.  (averaging of 6-8 common weapons per week, and needing 54 to make a single refined)  So the oft used excuse of others in the past that metal is just being dumped into the market is total hogwash.   

 

It just doesn't add up as a nice, clean cut reason as to why they are rising as fast as they are lately in relation to what cosmetics/items are being produced by the player base.

[Project Nova]

*cough* yes *cough* http://imgur.com/a/EArrg and about 50+ clones.

 

For real though, as that guy said, its because players are willing to pay x amount that all the bots compete for. Pretty much a constant loop until people realize how high the price in refined for keys are.

[Apeiron]

​I was thinking of that If we don't need ref anymore and don't wanna use it as currency no more then how we will manage the decimals or items lower valued than a key?

[Sugoni™ ⇋HG-A⇌]

Pretty much no matter how many keys exist they won't lose value until no one wants them, and everyone wants them.  You could have 10k new keys come into exist and there would probably be a very small effect.  Keys themselves are fine, ref are dying as a currency because it's ONLY used as a currency and no one is regulating it.  Think of TF2 as a country and ref as the currency.  The government of this country (Valve) will take the currency (ref) in and out of circulation as needed to avoid inflation.  However, the government of TF2 is just creating and creating with no regard for what the country actually needs.  This can be related to Germany around the early/mid 1920's where the currency lost over 85,000,000,000% of it's value.  Obviously it's not as drastic as this with ref, but you can see what I'm getting at.  The only way to regulate this would be to create a metal sink OR just disable crafting weapons for some time, but the second one would probably not work because it would be like a government just taking all the cash from people with no reimbursement.  I don't have a great idea of how to create a metal sink, but I would say making something like craftable stranges might do the trick.  As to your idea of key crafting, that would not increase the price of ref but decrease the price of keys.  Then the same thing that happened with ref will happen with keys, and we'll be screwed.  All in all, it's either up to valve to create a metal sink OR for a charity to do something like donate 0.1 cents for every hat crafted by you you donate.  Again, that probably wouldn't work, but whatever, there's nothing we can really do.

I didn't say anything about crafting keys

[polar]

It just doesn't add up as a nice, clean cut reason as to why they are rising as fast as they are lately in relation to what cosmetics/items are being produced by the player base.

 

Well, the issue is that it's a lot easier to update keys (only 1 suggestion) as opposed to the thousands of items in the game now. This means that values on most items tend to lag, often badly, behind where their value "should" be. And what ends up happening is that users just keep rolling with whatever the suggested value is on the site even if it's badly outdated and was created when ref values were very different. So there's a combination effect of item values dropping because they should be dropping and because they aren't getting updated quickly enough.

 

This is also why a lot of items have huge discrepancies between what they sell for in items and what they sell for on SCM - SCM values are automatically updated while suggestions are a lot slower to come by. Although some of this is now getting countered by the flood of new buyers.

[BovineUgrad]

Why are keys being priced at a flat price instead of a range, especially when a "wide range" of 1 refined is really such a small part of the price (1 refined is less than 4% of the price of keys).

 

Prices would be stable for longer if they were priced at, say 28-29 refined. This range would be valid for longer and not need to be bumped until keys no longer sell for less than 29, and honestly, Id think a 2 refined range is warranted. 

[neemo]

Why are keys being priced at a flat price instead of a range, especially when a "wide range" of 1 refined is really such a small part of the price (1 refined is less than 4% of the price of keys).

 

Prices would be stable for longer if they were priced at, say 28-29 refined. This range would be valid for longer and not need to be bumped until keys no longer sell for less than 29, and honestly, Id think a 2 refined range is warranted. 

It wouldn't be priced at that range unless there are lots of trades occurring between that range, but the problem is that keys are largely traded between a tight range. If people can sell successfully for let's say 29 ref, 28 ref would definitely be a quicksell. People would easily be willing to pay 28.77-28.88 to resell at 29 ref so a 1 ref range would be invalid very quickly.

[KinCryos]

I suppose it's possible for bots to somewhat influence the decrease in the value of Refined Metal, though the only possible process I could think of that could fit current trends would be quite convoluted and therefore unlikely:

 

trade-bots couldn't simply require more refined for keys, as veteran players would simply work with the more honest bots, with any newbies following suit. however, as things currently are, any (valid) lower-value suggestions for Refined Metal that come in to backpack.tf could easily be upvoted by bots, and any higher-value suggestions can easily be downvoted by bots. as we know, any newly-created Steam account can use Steam Achievement Manager to get every achievement item. the achievement items for Poker Night 2 alone happen to grant 2 keys worth of effort-free voting power (remember, while untradeable items can no longer be gift-wrapped as of 9 months ago, any values assigned to them haven't been removed completely from backpack.tf. last I heard, staff is deciding on what to do regarding that)

 

tl;dr version: while certainly possible, it's not very likely that bots are having any direct influence on the declining value of Refined Metal and thus, the "value" of Keys in Refined.

[BankingBot]

I suppose it's possible for bots to somewhat influence the decrease in the value of Refined Metal, though the only possible process I could think of that could fit current trends would be quite convoluted and therefore unlikely:

 

trade-bots couldn't simply require more refined for keys, as veteran players would simply work with the more honest bots, with any newbies following suit. however, as things currently are, any (valid) lower-value suggestions for Refined Metal that come in to backpack.tf could easily be upvoted by bots, and any higher-value suggestions can easily be downvoted by bots. as we know, any newly-created Steam account can use Steam Achievement Manager to get every achievement item. the achievement items for Poker Night 2 alone happen to grant 2 keys worth of effort-free voting power (remember, while untradeable items can no longer be gift-wrapped as of 9 months ago, any values assigned to them haven't been removed completely from backpack.tf. last I heard, staff is deciding on what to do regarding that)

 

tl;dr version: while certainly possible, it's not very likely that bots are having any direct influence on the declining value of Refined Metal and thus, the "value" of Keys in Refined.

You will never know... like the reason why our prices are updated at almost the same time and exactly the same rate

[Spirit]

You will never know... like the reason why our prices are updated at almost the same time and exactly the same rate

 

Its the very ancient, unspoken, and forgotten rule where bot owners did not verbally communicate at all but were all aware of the .33. One that has been passed along for generations.

 

Unfortunately.... the new generation, does not care, and does how it pleases.