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Opinions on cryptocurrencies

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It's not really related to gaming, but many games nowadays include an economy a la second life, with their own token/coin and downloadable contents. There even exists a token that has been designed just for games: enjin coin

I personally don't believe in this, I think we should have a unified currency that has so much volume that the value becomes stable. fragmenting currencies into 3000 coins like today creates volatility.
I thought there were so many problems in general with cryptocurrencies I had to write a long rant, I made a full fledged article about issues here:

https://motsd1inge.wordpress.com/2018/02/10/cryptocurrencies-not-there-yet/

So, 'd love to hear your thoughts about its content and if there are points you disagree and stuff.

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Cryptocurrencies, like most currencies, have no intrinsic value.  They only have value because people are willing to exchange them at a given rate.  Much of the volatility in cryptocurrency is not because if issues with the math or the verification or the costs of mining, the volatility comes from the lack of established value and the lack of a link to physical goods except for the link of the cost of mining the coins. Apart from that, currencies are nothing more than a token. The token has value because people are willing to trade goods and services at a rate they deem fair.  Tokens like dollars and euros have a constant dynamic on their value, and because so many people use them for a wide range of items the value is easily maintained. Digital currencies like bitcoin have had far fewer users, and even though they are used for many things online their adoption rate is minuscule relative to the transaction rates of other currencies. 

No matter the currency, their value will always remain whatever value people are willing to trade for them.

As for making one unified currency, that sort of thing never works out the way people plan.  As long as people desire to trade good and services using a token as value, the token will have value.  

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Ok for the value. And as for the "one unified" that won't work, that is a very sad observation. But I could tolerate the next best thing: The minimum number of different currencies.

Let's take the Euro crisis as an example of why a unified currency can't work, and let's establish the fact that we need some amount of elasticity in the value and the inflation rates of currencies based on local specificities, we still can attempt to minimize how many fragments are needed no ?

Your third point was usage in relation to goods. Yes, adoption is the main issue cryptocurrencies are facing.  But, will really buy/sell transactions for material goods, create a "peg" on the value of those objects ? didn't we see hyper inflation in period of war make the price of bread skyrocket to billions of Deutshmark in Germany ? It seems the value can still be volatile even when massively adopted. But inflation should be something controlled by the central banks, so in a system where the monetary base is fixed, there can be only deflation. And the speed at which it happens cannot spin out of control since the deflation is bound to the production volume of the whole economy, and not arbitrary loans, compensatory easing, or interest rates which are not controllable parameters in current cryptos. So the volatility diminution would have to come from an increase in liquidity only no ?

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Crypto, while the idea is neat, the application tends to have few problems:

  • Taking too much for doing transactions (which is imho killing off Bitcoin now, on the other hand this gives opportunity for other crypto to take lead ~ although ETH increases in there)
  • Global problem - supply & demand of hardware - ETH currently caused increased price for graphics cards, and supply failures for both major vendors - NVidia and AMD ... price went 30% - 100% up, and it will be going up in short term ~ will be solved by either new competitors in the same area, or just increased output of those two
  • Global problem - power - mining now consume huge amount of energy, this adds to global ecology problems ... and as a matter of fact drives power price up ~ we can go extinct sooner than we think

As a currency they have extreme flaws:

  • Volatility - compare crypto with something stable, like gold ... or even USD ... hell even Russian Ruble is a lot more stable than any crypto currently on the market
  • Bitcoin, is not easily Transferable (sigh... the average percentage for transfer went way too high) and Durable (it is tied to network) ... yet as bitcoin fell down from December, Transferability increased (e.g. transfer cost decreased ... it's still way too high though - meaning that there are better alternatives)
  • Anonymity - blockchain transaction leave traces, which may be a problem in future (especially for people avoiding taxes, selling or buying on black market, etc.)

 

In the end, cryptos are something new, and as being said - as long as people will be willing to exchange it for anything else in value - it's going to be there. It is going to stick around for long time.

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Crypto is a neat idea, but not one that IMHO is sustainable.

As others have pointed out, it's extremely volatile, which already is a major reason not to use crypto.

But something more I'd like to point out that I haven't pointed out (and I agree with all criticisms so far), but who is ultimately responsible for the currency? USD, for example, is backed by the US government. There is no onus of responsibility on anyone with crypto. This can be fixed, but it's an issue imho that hasn't been fixed yet.

Another thing to remember with something like USD is that we have institutions in place that can control the supply of money and manage it. The Federal Reserve, in case of the USD, dictates monetary supply policy to combat inflation, etc. Whose doing that with crypto? Without some sort of regulating authority, it's far too dangerous to use. 

A unified currency can work, but we'd need to go quite far to get it to work. We'd really need to break down borders, and just look at how difficult that would be. 

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42 minutes ago, deltaKshatriya said:

The Federal Reserve, in case of the USD, dictates monetary supply policy to combat inflation, etc. Whose doing that with crypto?

Well, that's kind of the whole point of a cryptocurrency. The supply is explicitly constrained by the mining algorithm, i.e. the longer you mine, the harder it gets, till eventually it is infeasible to mine any more. In theory at least, the steadily dwindling supply is supposed to cause continual deflation...

That doesn't do anything for the volatility, of course :)

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6 minutes ago, swiftcoder said:

Well, that's kind of the whole point of a cryptocurrency. The supply is explicitly constrained by the mining algorithm, i.e. the longer you mine, the harder it gets, till eventually it is infeasible to mine any more. In theory at least, the steadily dwindling supply is supposed to cause continual deflation...

That doesn't do anything for the volatility, of course :)

Well, that's what I mean is that there still needs to be a central authority like the Fed. There are other scenarios that can cause inflation or other issues. 

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The main problem is that cryptocurrency isn't effective and that the best parts of it is already in used by existing government banks.

 

People say it's great because of no tax and fees. Yea that is what the miner fee is; it is tax and the worst kind. The more users use a cryptocurrency the more they would have to pay so that miners deal with there transaction first.

If the whole world used cryptocurrency and here is only power for 20% of the transactions, you could end up with a situation where you have to pay the miners $10 000 - $1 000 000 to deal with your transaction of a $1 000.

So sooner or later a fixed tax system would have to be implemented, say 4% of the transaction value goes to the miner. Except that wouldn't work because your miners will want to deal with the largest transactions to get the most money.

 

The simple fact is cryptocurrency is a self destructive system with no place for linear growth.

To fix the linear growth problem you need to give it some one authority over it and they would have to police it. Then you just end up with a system less effective than the banking we already have.

 

Honestly I think Bitcoin was made to see how long it takes to break the system.

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55 minutes ago, Scouting Ninja said:

If the whole world used cryptocurrency and here is only power for 20% of the transactions, you could end up with a situation where you have to pay the miners $10 000 - $1 000 000 to deal with your transaction of a $1 000.

That's a problem specific to cryptocurrencies based on proof-of-work consensus.

Efforts are already underway to detach existing coins from said algorithms, and several existing coins never used proof-of-work in the first place.

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12 minutes ago, swiftcoder said:

That's a problem specific to cryptocurrencies based on proof-of-work consensus.

True the bloating example is mostly to bit coin but peer coin has it's own list of flaws.

In the end the problem is that keeping the money secure requires work and work = money. The people using the system has to pay for it and often taking a cut from what they put in is the easiest and most fair way.

 

Cryptocurrencies will keep loosing value as they grow because there growth is what rises there costs. The system isn't even new it's just digitized.

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All the reasons cited above are valid concerns to me. That's why my prefered cryptocurrency and the only one I can endorse with mind honesty, is nano (ex RaiBlock). They use multiple blockchains and no mining. So no waste of energy, instant transactions, and no fees. The host of the network nodes are idealists like hosts of tor nodes. There is less corruption in nano space thanks to no gold rush. It doesn't solve the economics though. (supply/inflation/volatility..)

I've head the opinion though that economics could be a part of the system, since lots of those things work with votes already, we can imagine a crypto with director interests and all central bank prerogatives included in the system and the people would have control by votes. so a replica of the current system but with full democracy.

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4 hours ago, Scouting Ninja said:

Cryptocurrencies will keep loosing value as they grow because there growth is what rises there costs

That may be [citation needed], because so far the major Cryptocurrencies have mostly gained value as they grow, despite rising costs.

2 minutes ago, Lightness1024 said:

with director interests and all central bank prerogatives included in the system and the people would have control by votes. so a replica of the current system but with full democracy.

I'm not sure I trust the general populace to know how to run an economy... Not that the central banks have always shown great reliability on that score, but in theory they are subject matter experts.

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15 hours ago, swiftcoder said:

That may be [citation needed], because so far the major Cryptocurrencies have mostly gained value as they grow, despite rising costs.

Cryptocurrencies have the problem that it's hard to separate there value from there coin value.

What I meant was that as it gains more user the cryptocurrencies become less stable and slows down and becomes less usable and so the cost of maintenance rises. 

Proof-of-stake does improve on this and so does some of thee Hybrid systems but in the end still suffer from the same problems.

 

Don't get me wrong, I am not against cryptocurrencies. I am against a single unified cryptocurrency.

The reason cryptocurrencies work right now and have such low tax rates is because of how they loose value as they grow. There is a tipping point for them and as long as there is many competing systems there tax rates will stay low.

 

Rant:

People seam to think that things like the private sector and government sector was build out of greed, when in fact it was build out of necessity to fight against greed. Tax wasn't someones great scheme to make money, it was decided as a fair way to pay for things.

People look at cryptocurrencies and think, "Hey look no tax!" without thinking about what it means if every miner gets 1%.

"The 1% is made up value, there not taking it from my share." Yes they are, by adding in more coins they reduce the value of the coins you have.

We as developers use these tricks in our games, MMO design is the same thing. When you think of it cryptocurrencies is just a MMO.

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1 hour ago, Scouting Ninja said:

We as developers use these tricks in our games, MMO design is the same thing. When you think of it cryptocurrencies is just a MMO.

I absolutely agree with this sentiment.

Also I'd add, crypto isn't anything new in terms of pure tech. It's just a new combination of tech. Much of the tech has existed before and in some cases, is already being used.

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I'm not touching crypto currencies with a ten foot pole. No way, no thank you.

1) It's not an investment. The "value" of crypto currency is driven purely by speculative hype. Hype is never a sound or stable investment strategy. Warren Buffet is wisely staying far away from it because he doesn't understand it. That should be a red flag.

2) Valve pulled their support for Bitcoin a month or two ago. They said that the reason was for the volatile price fluctuations. That makes sense. You can't build a stable business when your bottom line is so volatile and unpredictable. How many other businesses will stop accepting the currency as a valid form of payment for the same reasons? What does that mean for a "currency" when its not accepted as a form of payment in a transaction? That should be another red flag.

3) There is a small number of people who have put their fortunes into Bitcoin. A very small number. I believe they're operating a pump and dump scheme, and anyone who buys into the "currency" is going to be left holding the bag when the floor drops. That's the last red flag.

Edited by slayemin

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20 hours ago, Scouting Ninja said:

People seam to think that things like the private sector and government sector was build out of greed, when in fact it was build out of necessity to fight against greed. Tax wasn't someones great scheme to make money, it was decided as a fair way to pay for things.

Nice, I think that's a good perspective and a bit of fairness is overdue in the debate.

19 hours ago, deltaKshatriya said:

Also I'd add, crypto isn't anything new in terms of pure tech. It's just a new combination of tech. Much of the tech has existed before and in some cases, is already being used.

Absolutely, that's what I start with in my article (linked in OP).

11 hours ago, slayemin said:

The "value" of crypto currency is driven purely by speculative hype.

True. But there is indeed a small amount of bias for increase in value. Pure speculation would not leave you with more than 50/50 chance of loss vs profit. However, if we take BTC: that is a coin with a fixed supply, because of people who lose their keys (coin burning), and because of the entropy in the real economy "always rising" (added value theory), BTC is a deflationary currency by nature, which means it IS an investment.
Also there is a bandwagon effect which is why some people have accused it of being a Ponzi (more people coming is the reason for rise in value, which is not sustainable -> pyramid effect.) But I refute this accusation in my article.

12 hours ago, slayemin said:

Warren Buffet is wisely staying far away

So this comment has been a subject of extensive discussion in the field, and this doesn't have to be a red flag at all. Buffet said he will not invest in Apple either. You take it or leave it if your personality matches his, that's all, but it's not an absolute red flag. Authority is not an argument (one of the rhetoric fallacies).

12 hours ago, slayemin said:

I believe they're operating a pump and dump scheme

This is very much and sadly true, not so much in BTC because of the very large capitalization, but on other smaller coins it's the wild wild west and lots have been left holding the bag. I personally think this is not a problem at all, and it's a anarcho liberal point of view, the thing is just to be aware of this and hedge according to risks you can take, if you can't, just don't play, but there is no need to dismiss the game altogether because the players are rough.

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2 hours ago, Lightness1024 said:

(more people coming is the reason for rise in value, which is not sustainable -> pyramid effect.) But I refute this accusation in my article.

But it isn't sustainable. That is why we need multiple Cryptocurrencies.

I don't believe it's a scam, it's just the nature of any money system, there have been a few currencies before that died of similar effect; a few even died because of the opposite effect.

It's the whole reason Cryptocurrencies need to fluctuate. As long as they keep rising and falling in value they can sustain them self. Because don't forget they don't have a government who can sustain them.

 

Cryptocurrencies are meant for small trades, but investing money into them is just gambling.

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On 12-2-2018 at 3:52 PM, deltaKshatriya said:

The Federal Reserve, in case of the USD, dictates monetary supply policy to combat inflation,

Wrong, they PRINT more money to have more money, they  do it with policy to not CAUSE too much inflation. Most if not all cryptocurrencies have a limited supply.

On 13-2-2018 at 5:45 PM, Scouting Ninja said:

Tax wasn't someones great scheme to make money, it was decided as a fair way to pay for things.

Tax was someone's scheme to produce military and thus tax more areas. People accepted taxation and have ever since been trying to make taxation work more for the common good.

Also, miners and transaction-fees are differnet things then taxation, miners mean inflation, though the max. amounts of coins for a given CC has already been pre-defined. (oh, and you HAVE to pay REAL taxes over CC's, anything that has value is taxable.)

@Lightness1024: there is no advantage to having only one currency, as a user you just gotta remember you don't have to use them all, you just use whatever currency suits your needs best(aka you can pay with it in a local store)

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Crypto currencies are the future, not now and maybe not in next 50 years but a time will come where we will pay digital only. Take a look at Paypal for example, it is comfortable and today really convinient to pay with Paypal and even Skype now implements a payment service (I never sayd I trust Microsoft ;) ). I agree to all the backdraws that come up here saying that all for primary Bitcoin as the dinosaur of CCs has massive problems but I wont see it as the future of payment rather than a toybox so one could experiment and extend the technology for a Bitcoin 2.0 however it will be named then.

I study CCs for a long time know since 2014 (and yes this is ages in technology) and I saw the evolution, anonymity, more anonymity, even more anonymity and mathematical improvments to make data blocks smaller and security higher. The core technology is very interesting to me.

The pros are uncontroversial there while the cons are there too. The most given argument is that CCs at the moment arent very stable in value but to solve this we should first take a look at the history of money. People found/harvested something (I may remeber it were shells as the first really trading value) that other people also liked to have and trade other goods and services for. It became convinient because you wont be in the need to carry a chicken anymore for trading that against something else over a long road and back home; letting other new business grown up like merchants or money changer (that later become banks)

Complete History of Money

I see this as the primary advantage of any CC regardless how it is implemented at the end, that people can carry there values without any major drawbacks. You wont need a bank account anymore (what I think is the main reson that CCs will not establish so far because companies earn money with your money) that disables the need for storing fees you have to pay. Without a bank account you also wont need an address that is why some homeless people cant get work in our countries (you need a home to get a bank account to get a job to get a home = fail!). Ever payed for bank card, print your own ones with CCs. It dosent take time to change your account like two weeks for the traditional way, it does just take a few seconds and you are done. Payment (could be) as fast as hell, while you have just to scan a QR code on checkout and your partner in contract gets nearly instant message about success or failure while you can also pay at weekend or holiday out of the usual business hours.

Transactions are as safe as the crypto problem is and unless someone invents the quantum computer, they will stay so (while even with our other currencies will get unsafe with a quantum computer) and anonymous if used correctly. This might be a point where people will discuss about but my opinion is that government should not know about what/who I pay nor has it the right to denie access or steal my money for whatever reason. Tax crime is a problem today but I dont think it will be a greater problem in a CC scenario. People will then just be forced to make a tax sheet what most companies and self-employed persons are need to do anyways so government can still check for tax crime while no-one other can investigate a persons payment history just from the blockchain.

Evaluating payments costs energy and so money this is fact but also fact is that any other of our digital payments today costs energy as well. But with a CC based payment system people offering computing power could earn money and so have the flow of currency units never stopped. I calculated with a fixed ammount of transaction fees that are measured not on value but on size of the transaction. It is not the transaction value that consumes the power but every block of bytes so why not pay per block where a block is big enougth to hold the information for one payment plus a bit extra. Larger payments or bigger payment bundles will then be at a higher cost because they take the space of smaller payments while transfering other values, for example contracts would also cost a bit more. I would give that money however to the evaluating network node to give an appeal to the human kind to take part at the system. However the crypto problem should be solved on evaluation, it should be fair and I also think we need multiple evaluations in parallel to get all the payment traffic done in the future.

I think the above can also help keeping the value stable because currency units are always in flow until the whole system stops working while I agree that the CC value should be something physical too. It is right that countries print there own money and print more money as some of them might have in gold and other values. Occasionally a reason for countries to make debts and get into insolvency. The backdraw on Bitcoin was that when the blockchain starts the first time, the inventors of Bitcoin should have taken a huge ammount of coins for themselfs before going into real public traffic. I thought about it and in my opinion there should be an initial fixed value of currency units equal to the financial value of a country spread to each country taking part at the system. So you will never ever have more units as are sealed by the value of a country. Countries give there currency units to citizens and may give or take currency units to keep the currency stable.

There are also a little more problems CCs have to solve in the future but I think this hits the core discussion :D

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18 hours ago, Dramolion said:

Wrong, they PRINT more money to have more money, they  do it with policy to not CAUSE too much inflation. Most if not all cryptocurrencies have a limited supply.

Incorrect. Printing money is one means of combatting inflation, amongst other policies. Another is setting the reserve requirements for banks. There is also buying back and selling bonds to control the money supply. They also set interest rates for lending out of the central reserve. It really isn't as simple as you're presenting it to be.

https://www.thebalance.com/the-federal-reserve-system-and-its-function-3306001

Cryptocurrencies have no means of controlling money supply. There might be a limited supply, but there's no means of stopping a party from dumping all of his/her cryptocurrency. Moreover, what happens if there's some sort of economic panic? Or if there's two few cryptocurrencies chasing too many products (deflation)? There's a wide variety of issues that requires some sort of central institution. 

@Shaarigan: undeniably there are advantages to CC, but are these advantages exclusive to the system of CC? IMO they can (and at least some ideas already are) be implemented into more traditional currencies. Certainly while CC won't disappear, I'm not holding my breath for widespread adoption either.

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3 hours ago, deltaKshatriya said:

Incorrect. Printing money is one means of combatting inflation, amongst other policies.

Printing money increases the supply of money and thus decreases the value per coin, a decrease in the value of the coin is called inflation.

3 hours ago, deltaKshatriya said:

Another is setting the reserve requirements for banks.

Yup, private banks can't lend out(=print) money infinitely, else you get both inflation WITHOUT the (government-owned) central bank/federal reserve printing money and additionally problems like with Icesave not being able to pay debts.

3 hours ago, deltaKshatriya said:

They also set interest rates for lending out of the central reserve.

Yes, they set the price for the product they 're delivering, fyi, they're a fovernment-agency, they do everything with policy, this doesn't mean they're not trying to make more money, but, in your defense, their policy is generally set by others higher-up,
 and i suspect they've given a simple allow-up-to-x% inflation, instead of a make sure no inflation/cause deflation.

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Inflation is a way that the government can sneakily steal to everyone... that is not through taxes which are open and clear. If you really think about it, it isn't a good thing. To steal, and on top ripping off everyone while hiding... just like when they hide behind debt to years to come. Spend, hide, spend. And probably not the good type of expending either, it's sneaky bad spending, on top of being sneaky and bad. And most aren't benefiting from it... just the elite controlling the flow of money to their own pockets. 

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16 hours ago, deltaKshatriya said:

but are these advantages exclusive to the system of CC? IMO they can (and at least some ideas already are) be implemented into more traditional currencies

If you wont pay cash all the time, you will always have any of these disadvantages competed to CCs because all the money you get is tracked from its creation (printing), the national banks that have to make settlements to your house bank that will track who has taken how many from what source and when up to you. Payment transactions are mostly handled digital from your income to your outcome and if financial service is pissed off, they can denie your accounts for an undetermined time. Banks partially take money for just storing your money in there computer systems while they also take yours to make even more money with more or less gambling on the global market. Some banks also take money when you have too much money on your account instead of giving you the fees from there work with it.

I just ask if anyone thinks this is fair?

CCs are fair by implementation because the basic idea is that you do not need the man-in-the-middle model for digital payment anymore and anyone can be its own bank, managing anything on its own, sure for some drawbacks, for example the need of using a capable device for it, computing and energy power but I still think CCs are for now the leading digital payment system that offer most freedom and independence related to digital payment services.

I dont say that CCs are yet meant to be the replacement for any other system but may become in the future with some more research and approval out of the discussion as black market or hacker currency but for the "normal" people

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2 hours ago, Shaarigan said:

CCs are fair by implementation because the basic idea is that you do not need the man-in-the-middle model for digital payment anymore

The man in the middle is the developer. Almost every time a new money system was introduced, the creators cheated the system and forged extra money.

A smart developer would just spend small amounts of money buying what ever he wants; the best part for the developer is that stealing money from a cryptocurrencies isn't illegal.

 

At the moment cryptocurrencies are very similar to the old trading guilds, that is a good thing; because those guilds became the banking system of today.

The problem is that what most people are saying is the good parts of cryptocurrencies are the parts that won't last; because in truth they are what is wrong with cryptocurrencies.

 

The freedom that comes with cryptocurrencies allow people to exploit it. A good banking system is crime free and convenient, cryptocurrencies is neither at the moment.

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there is no way CC's can become properly mainstream without giving average joe the chance to convert to the currency at a fair fixed rate.

The more popular CC's become the more our traditional savings are eroded and wealth moves even more towards the haves an do-nothings in our society.

i think we are moving towards a post scarcity world where money will be less and less of an issue. As jobless rate rises due to automation there will need to be division of resources (minimum income etc) to prevent poverty.

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      Youtubers and streamers are important allies for game developers. They are in direct contact with potential buyers/backers and can significantly increase a campaign’s reach. We made a list of content creators who’d potentially be interested in our game. They were selected mostly by browsing Youtube for “let’s play” videos of games similar to Nimbatus. We sent out a total of 100 emails, each with a personalized intro sentence, no money involved. Additionally, we used Keymailer . Keymailer is a tool to contact Youtubers and streamers. At a cost of $150/month you can filter all available contacts by games they played and genres they enjoy. We personalized the message for each group. Messages automatically include an individual Steam key. With this tool, we contacted over 2000 Youtubers/Streamers who are interested in similar games.
      How it turned out
      - About 10 of the 100 Youtubers we contacted manually ended up creating a video/stream during the Kickstarter. Including some big ones with 1 million+ subscribers.
      - Over 150 videos resulted from the Keymailer outreach. Absolutely worth the investment!

      Another very helpful tool to find Youtubers/Streamers is Twitter. Before, but also during the campaign we sent out tweets , stating that we are looking for Youtubers/Streamers who want to feature Nimbatus. We also encouraged people to tag potentially interested content creators in the comments. This brought in a lot of interested people and resulted in a couple dozen videos. We also used Twitter to follow up when people where not responding via email, which proved to be very effective.
      In terms of campaign length we decided to go with a 34 day Kickstarter. The main reason being that we thought it would take quite a while until the word of the campaign spread enough. In retrospective this was ok, but we think 30 days would have been enough too.
      We were very unsure whether or not to release a demo of Nimbatus. Mainly because we were unsure if the game offered enough to convince players in this early state and we feared that our alpha access tier would potentially lose value because everyone could play already. Thankfully we decided to offer a demo in the end. More on this topic in Part 3 - During the campaign.
      Since we are based in Switzerland, we were forced to use CHF as our campaign’s currency. And while the currency is automatically re-calculated into $ for American backers, it was displayed in CHF for all other international backers. Even though CHF and $ are almost 1:1 in value, we believed this to be a
      hurdle. There is no way to tell for us how many backers were scared away because of this in the end.
       
      Part 2: Kickstarter Launch

      We launched our Kickstarter campaign on a Thursday evening (UTC + 1) which is midday in the US. In order to celebrate the launch, we did a short livestream on Facebook. We had previously opened an event page and invited all our Facebook friends to it. Only a few people were watching and we were a bit stressed out.

      In order to help us spread the word we challenged our supporters with community goals. We promised that if all these goals were reached, each backer above $14 would receive an extra copy of Nimbatus. With most of the goals reached after the first week, we realized that we should have made the challenge a bit harder.
      The first few days went better than expected. We announced the Kickstarter on Imgur, Reddit, 9gag, Instagram, Facebook, Twitter, in some forums, via our Newsletter and on our Steam page. If you plan to release your game on Steam later on, we’d highly recommend that you set up your Steam page before the Kickstarter launches. Some people might not be interested in backing the game but will go ahead and wishlist it instead.
       
      Part 3: During The Campaign

      We tried to keep the campaign’s momentum going. This worked our mostly thanks to the demo we had released.
      In order to download the Nimbatus demo, people needed to head over to our website and enter their email address. Within a few minutes, they received an automated email, including a download link for the demo. We used Mailchimp for this process.

       
      We also added a big pop up in the demo to inform players about the Kickstarter.

      At first we were a bit reluctant to use this approach, it felt a bit sneaky. But after adding a line informing players they would be added to the newsletter and adding a huge unsubscribe button in the demo download mail, we felt that we could still sleep at night.
      For our previous campaign we had also released a demo. But the approach was significantly different. For the Nimbatus Kickstarter, we used the demo as a marketing tool to inform people about the campaign. Our previous Kickstarters’ demo was mainly an asset you could download if you were already checking out the campaign’s page and wanted to try the game before backing.
      We continued to frequently post on Imgur, Twitter, 9Gag and Facebook. Simultaneously, people streamed Nimbatus on Twitch and released videos on Youtube. This lead to a lot of demo downloads and therefore growth of our newsletter. A few hundred subs came in every day. Only about 10% of the people unsubscribed from the newsletter after downloading the demo.
      Whenever we updated the demo or reached significant milestones in the campaign, such as being halfway to our goal, we sent out a newsletter. We also opened a Discord channel, which turned out a be a great way to stay in touch with our players.
      We were quite surprised to see a decent opening and link click rate. Especially if you compare this to our “normal” newsletter, which includes mostly people we personally met at events. Our normal newsletter took over two years to build up and includes about 4000 subs. With the Nimbatus demo, we gathered 50’000 subs within just 4 weeks and without travelling to any conferences.
       


      (please note that around 2500 people subscribed to the normal newsletter during the Kickstarter)
      On the 7th day of the campaign we asked a friend if she would give us a shoutout on Reddit. She agreed and posted it in r/gaming. We will never forget what happened next. The post absolutely took off! In less than an hour, the post had reached the frontpage and continued to climb fast. It soon reached the top spot of all things on Reddit. Our team danced around in the office. Lots of people backed, a total of over $5000 came in from this post and we reached our funding goal 30 minutes after hitting the front page.

       
      We couldn’t believe our luck. Then, people started to accuse us of using bots to upvote the post. Our post was reported multiple times until the moderators took the post down.
      We were shocked and contacted them. They explained that they would need to investigate the post for bot abuse. A few hours later, they put the post back up and stated to have found nothing wrong with it and apologized for the inconvenience. Since the post had not received any upvotes in the past hours while it was taken down it very quickly dropped off the front page and the money flow stopped. While this is a misunderstanding we can understand and accept, people’s reactions hit us pretty hard. After the post was back up, many people on Reddit continued to accuse us and our friend. In the following days, our friend was constantly harassed when she posted on Reddit. Some people jumped over to our companies Twitter and Imgur account and kept on blaming us, asking if we were buying upvotes there too. It’s really not cool to falsely accuse people.
      Almost two weeks later we decided to start posting in smaller subreddits again. This proved to be no problem. But when we dared to do another post in r/gaming later, people immediately reacted very aggressive. We took the new post down and decided to stop posting in r/gaming (at least during the Kickstarter).
      After upgrading the demo with a new feature to easily export GIFs, we started to run competitions on Twitter. The coolest drones that were shared with #NimbatusGame would receive a free Alpha key for the game. Lots of players participated and helped to increase Nimbatus’ reach by doing so. We also gave keys to our most dedicated Youtubers/streamers who then came up with all kinds of interesting challenges for their viewers.
      All these activities came together in a nice loop:
      People downloaded the Nimbatus demo they heard about on social media/social news sites or from Youtubers/Streamers. By receiving newsletters and playing the demo they learned about the Kickstarter. Many of them backed and participated in community goals/competitions which brought in more new people.

       
      Not much happened in terms of press. RockPaperShotgun and PCGamer wrote articles, both resulting in about $500, which was nice. A handful of small sites picked up the news too. We sent out a press release when Nimbatus reached its funding goal, both to manually picked editors of bigger sites and via gamespress.com.

       
      Part 4: Last Days
      Every person that hit the “Remind me” button on a Kickstarter page receives an email 48 hours before a campaign ends. This helpful reminder caused a flood of new pledges. We reached our last stretch goal a few hours before our campaign ended. Since we had already communicated this goal as the final one we withheld announcing any further stretch goals.

       
      We decided to do a Thunderclap 24 hours before the campaign ends. Even after having done quite a few Thunderclaps, we are still unsure how big of an impact they have.
      A few minutes before the Kickstarter campaign was over we cleaned up our campaign page and added links to our Steam page and website. Note that Kickstarter pages cannot be edited after the campaign ends!
      The campaign ended on a Tuesday evening (UTC + 1) and raised a total of $75’000, which is 369% of the original funding goal. After finishing up our “Thank you” image and sending it to our backers it was time to rest.

       
      Part 5: Conclusion
      We are very happy with the campaign’s results. It was unexpected to highly surpass our funding goal, even though we didn’t have an engaged community when the campaign started. Thanks to the demo we were able to develop a community for Nimbatus on the go. The demo also allowed us to be less “promoty” when posting on social news sites. This way, interested people could get the demo and discover the Kickstarter from there instead of us having to ask for support directly when posting. This, combined with the ever growing newsletter, turned into a great campaign dynamic. We plan to use this approach again for future campaigns.
       
      Growth
      300 ------------------> 430 Facebook likes
      1300 -----------------> 2120 Twitter followers
      1000 -----------------> 50’000 Newsletter signups
      3500 -----------------> 10’000 Followers on Steam
      0 ---------------------> 320 Readers of subreddit
      0 ---------------------> 468 People on Discord
      0 ---------------------> 300 Members in our forum
       
      More data
      23% of our backers came directly from Kickstarter.
      76% of our backers came from external sites.
      For our previous campaign it was 36/64.
      The average pledge amount of our backers was $26.
      94 backers decided to choose the Navigator reward, which gives them access to all games our studio will create in the future. It makes us very happy to see that this kind of reward, which is basically an investment in us as a game company, was popular among backers.
       
      Main sources of backers
      Link inside demo / Newsletter 22’000 Kickstarter 17’000 Youtube 15’000 Google 3000 Reddit 2500 Twitter 2000 Facebook 2000  
      TLDR:
      Keymailer is awesome, but also contact big Youtubers/streamers via email. Most money for the Kickstarter came in through the demo. Social news sites (Imgur, 9Gag, Reddit, …) can generate a lot of attention for a game. It’s much easier to offer a demo on social news sites than to ask for Kickstarter support. Collecting newsletter subs from demo downloads is very effective. It’s possible to run a successful Kickstarter without having a big community beforehand.  
      We hope this insight helps you plan your future Kickstarter campaign. We believe you can do it and we wish you all the best.
       
      About the author:
      Philomena Schwab is a game designer from Zurich, Switzerland. She co-founded Stray Fawn Studio together with Micha Stettler. The indie game studio recently released its first game, Niche - a genetics survival game and is now developing its second game Nimbatus - The Space Drone Constructor. Philomena wrote her master thesis about community building for indie game developers and founded the nature gamedev collective Playful Oasis. As a chair member of the Swiss Game Developers association she helps her local game industry grow.
      https://www.nimbatus.ch/
      https://strayfawnstudio.com/
      https://www.kickstarter.com/projects/strayfawnstudio/nimbatus-the-space-drone-constructor
       
      Related Reading:
      Algo-Bot: Lessons Learned from our Kickstarter failure.
    • By Scouting Ninja
      One thing I have noticed a lot is people complaining about adverts, saying that it's ruining the game experience. Research based on my own statistics from my games; numbers are rounded and from when the game was at peak.
      Stats:
      The question I have is should I even bother to add adverts into the game this time?
      Last time I used the money from the adverts to pay for advertising my own game, this time I have someone for marketing. If this game gets double the players(1000 000 downloads needed) I could be seeing $500- $600 a month from the adverts, that is actually not bad.
      Without adverts I could also get more happy players, this could mean more sales from micro transactions. Including the adverts later when I have more players is a bad idea, I have seen games crashing down in popularity because of things like this. If I am going to have adverts in game it should be there from the start.
       
      All in all, there is as much argument for me to include advertising in my games as against it.
    • By khawk
      Long-time GameDev.net member and indie developer @cliffski32 of Positech Games has posted in his latest blog a very direct message to aspiring indie developers: you will flop and lose money.
      While not the message most aspiring developers want to hear, @cliffski32 discusses the challenges for an indie from a financial perspective with all the costs and revenue losses that developers incur when you factor in staff, legal, and investors.
      Using data from player unknown: battlegrounds as an example of the high end and assessing the mean game in 348 pages of "Top Sellers" of Indie games on Steam, @cliffski32 makes the point that game development is a tough business.
      Read the full blog post at http://positech.co.uk/cliffsblog/2017/06/23/your-indie-game-will-flop-and-you-will-lose-money/.
       

      View full story
    • By Jesse "Chime" Collins
      Welcome to the fourth entry to Indie Marketing For N00bs. This week, we’re going to talk about some things that most developers fail to really follow through on: Marketing Plans. These are both fundamental additions to any successful game on the market. We’re going to take the time here to really explain the importance of these tools, what they’re used for, and how to create them yourself.
      PLAN? I Don’t Need No Stinkin’ PLAN!
      You’ve designed a game. Go you. What is the first thing most developers do before they make the game, though? They create a game design document, which entails the plan for what’s going into the game, how it’ll be implemented, and something that can be followed through or be utilized by a publisher that wants to take your game under their wing. In theory, you already know how to do exactly this, so why aren’t you designating time to do the same thing for other aspects of the process?
      A marketing plan is your personal guideline to what needs to be done early on, as well as in post-development when it comes to marketing, public relations, social media, and community management. It’s big, generally. But, it helps developers know when they need to make a post or a blog, or when they need to make an announcement due to hitting a target. This includes when you should do “Dev Diaries” or how often you should tweet. Make a plan and stick to it.
      I Love It When A Marketing Plan Comes Together!
      Everyone has a different method for their own versions of a marketing plan. Some people do a simple outline with key points and some people go above and beyond for a true precision strike outward (For instance: My plans tend to be between 9 and 11 pages, including a title page).
      I mentioned earlier that the plan can be for a publisher. If you ever plan to get picked up by a publisher (even the indie publishers), they want you to be as impactful as you can be autonomously. It’s less work and hassle for them if you come equipped with your own knowledge and tactics.
      But, maybe I don’t want a publisher. Why do I need a plan? Making a plan for yourself keeps you on a strict regimen to get your game out there. Will it ensure a 100% success story? Of course not. But, it will ensure that you are following my rule from previous entries to this series: “Every eye possible”.
      Know Your Audience And They Will Know You
      A plan should include two major sections, split into explanations for each one: Information and Marketing Tools.
      In the Information section, include a quick description of your game, maybe one or two paragraphs. This is to guide anyone other than yourself that may read this document. If you have any current statistics or analytics about your game or company, include a section for them. Set your goal here, as well. Make an attainable goal based on similar games on market. Knowing what you’re up against and adjusting your expectations to adhere to logic is a perfect way to set yourself up for a win.
      Additionally, do some research and figure out your demographic. Come up with a range of people that you believe your game is targeting. Include:
      Age range Is your game more mature themed? Would it appeal more to a nostalgic retro audience? Is it cartoony and kid-friendly? These aspects matter. Gender(s) With women taking to the industry in recent years, more women are likely to play your game. Take this into account here. Languages For instance, if you game is only in English and you have no plans to localize the game to Chinese, China might not be your demographic. Systems Is your game only on PC? Probably shouldn’t focus on console gamers too much then and vice versa. Is your game mobile? Why are you contacting people that only play PC games? Know your audience and it’ll help with future endeavors and needs.
      List Out All The Tools You’ll Use
      Marketing Tools should include Social Media, Video platforms, Game’s Website, Community Presence, Press, Paid Advertisements, and Software and Services you plan to use. This section is a lot bigger than the other, but it’s where the majority of the plan is laid out.
      What social media are you going to use? List them out here. We’ve discussed social media in a prior lesson, so add in any that are going to be linked to this game, no matter how small. Think of this as your reminder to post on Google+ or Instagram. How often will you be posting to each platform? Do you plan to tweet daily? Are you hitting other platforms often? Make sure to include even game developer specific platforms here as well. Any presence needs to be noted and should have a guide for how you handle each one.
      Do you plan to make videos for your game? Have you made a trailer? Will you be streaming the game during development or post-development for people to see progress or features? Make sure to include if you’re using YouTube, Twitch, or any other video platforms. How will you post these videos and how often? Will you be live for most of it on Twitch and then upload it to YouTube after? What’s the plan?
      Most indie developers don’t utilize their own website for promotion, but it’s a powerful tool to have a simple domain to send potential eyes to. This looks great on business cards, promotional materials, or any shout outs you make need. Some people even go a step further and implement a dev blog into their site. This can tie to the videos, as well, showing off aspects of the game that may not have been apparent. Dev Diaries, which can be shown on your site, are one of the easiest ways to keep community involvement during the creation of your game.
      Utilization of the forum structure is always a good way to keep community involvement, in both the traditional sense and the more modern takes. Reddit is ridiculously popular to show off progress and several sub-Reddits (specific sections dedicated to particular topics) are designed specifically for indie developers. Additionally, the use of Discord could be considered a “modern take” to the forum structure. Taking on an old-school IRC style mixed with vocal capabilities like Teamspeak or Ventrillo, Discord is designed for gamers and widely utilized as a community tool for the game industry.
      Media Shower: Wishing Among The Stars
      As we’ve discussed in an earlier lesson, the press and media are your friends. List out your plan to contact them and how you plan to keep them notified in your plan. This includes a guideline of when you plan to write press releases to get out to the media and press sites. Figure out what kinds of streamers and “Let’s Players” you want to try to contact and set a target.
      Include a full plan for a customized “press kit” in your marketing plan. I’m going to be setting “press kits” aside as its own lesson at a later date, but expect a much more substantial detailing of what should be in a standard press kit.
      Software, Services, and Ads
      As with any other game-related step out there, tools can and should be used when marketing. This can be a number of things, from minor social media tools like Hootsuite or Buffer, all the way to full analytics reporting programs like Google analytics. A popular free tool to use is Google Alerts, which can set keywords and have Google email you when something comes up in the search engine. If you intend to have people play the game in Let’s Plays, websites like Gamesight can be very helpful in tracking your game. After the game has been published, it’s important to try to get your game on such aggregates as Metacritic, not for any other reason than Twitch and other websites pull from that site for their content.
      This section should also include any paid advertising you, your publisher (if applicable), or third party will intend to use. Be concise. Since this uses real money, you can utilize the demographics designed in the first section of the marketing plan to focus the impressions and clicks. Ads can be Google, Facebook, Twitter, or a number of other platforms.
      Understand the difference between sponsored advertisements and "like" purchasing, though. It's the difference between having real eyes see your product and having some company in a click farm boost your numbers in a fake way. Fake followers and "bots"can completely mess up any intended reporting and realistic charts. You'll never know if you're actually doing good.
      Don’t forget to think out of the box, though. Marketing is only limited to your own mind. Be creative and sometimes it will pay off. Some people get a proper Wikipedia article put up for their game. If you intend to make a commercial, YouTube and Twitter can be tapped for a video-based ad. Heading to small events in your area can help get more eyes. Just make sure you have it all in your Plan.
    • By jonathanwilsonart
      Hi,
      I need a get a quote very soon to a mid level game company for a single screen design. A multi-layered 2D reward screen in Photoshop. Size is 5200 x 2048pixels . Game will be ad free and sold as an iOS and Android app. Thanks for any help or advice. Have about an hour to send them one.
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