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Old 08-14-2020, 08:05 PM   #1
AlexanderHowl
 
Join Date: Feb 2016
Default Virtual Economies [Ultratech]

One of the assumptions in a lot of science fiction is the assumption that virtual economies will be as vibrant and as powerful as real economies, but that is not necessarily going to be the case for a couple of reasons.

First, virtual labor will likely be more common than real labor, meaning that the cost and wages for virtual labor will be much lower than for real labor. Since real people need to spend real money for their necessities, and since real people supply governments with real taxes and corporations with real revenues, laws will likely exist that prevent the replacement of real labor (either biological or robotic) with virtual labor (though more free market oriented economies may experience a delay in implementing and/or enforcing such laws). Economies that do not implement such measures will likely find themselves experiencing massive currency devaluation and hyperinflation, as other economies will probably see their equating virtual labor with real labor as equivalent to leaving the printing presses on overnight.

Second, virtual labor does not produce real goods unless they are working through robots in the real world, so virtual economies will likely end up focused on entertainment and digital piracy. While other forms of economic activity are possible, such as computer programming, research and development, statistical modeling, etc., they will likely only be a minor part of the virtual economy, as people can just hire digital pirates to steal the virtual products from their creators before their creators can copyright or patent their virtual products. Economies that focus on the virtual economy will either become centers of entertainment and/or digital piracy or will collapse due to the efforts of digital pirates.

Because of these two tendencies, virtual economies will likely find themselves devalued compared to real economies. We have been seeing such things in the virtual economies of video games for two decades now, with some video games offering thousands of dollars of in game currency for a dollar of real currency. Since it is easy for them to create game currency, it is usually worthwhile for them to offer massive amounts of in game currency for a small amount of real currency. Such trends will likely become exacerbated as virtual economies that produce intangible goods become larger and more widespread.

For example, let us say that the USA in 2100 will be a mature TL10 society that possesses a real economy and a virtual economy. The real dollar (R$) may end up worth 1,000 virtual dollars (V$) due to the fact that the plethora of virtual labor and virtual products pushes down the value of the V$ to 0.1% of the value of the R$. A real worker making a real income of R$67,200/year (Average Income) would be able to live at a V$6,720,000/year (Filthy Rich Income) in the virtual economy through just exchanging 10% of their R$ into V$. Conversely, a virtual worker would need to earn V$672,000,000/year (Multimillionaire 2 Income) to have a real income of R$67,200/year (Average Income) through exchanging 10% of their V$ into R$.

What type of issues do you think would occur with such a difference between the real and the virtual economies? Would you expect real workers to spend a fraction of their real incomes to live like kings in the virtual economies? Would you expect virtual workers to attempt to earn enough virtual money to purchase robotic bodies in the real world so they could earn real money? Would real nations treat virtual economies as different nations, so they could legally treat the inhabitants of virtual economies as aliens and therefore could legally control their immigration?
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Old 08-14-2020, 09:21 PM   #2
ericthered
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Default Re: Virtual Economies [Ultratech]

When you say "Virtual Labor", I take it that you are referring to Artificial Intelligence?

"Entertainment" can mean various things. Modern 1st World Economies don't actually require much of their output in order to keep their consumers alive, but add "perks onto almost every aspect of life. We could live on boiled porridge and a few well-chosen steamed vegetables, but we eat Hamburgers and Lasagna, Ice Cream and Steaks, Curry and Oranges. We could live in spartan cells and wear simple drab tunics, but we paint our houses just the right colors, own clothes we wear once a year or less, pick curtains that match our carpets, and mow our lawns. We need to keep warm, but we develop elaborate temperature control systems. We have some need for light at night, but certainly not for our lives to be constantly lit at the flick of a switch.

Those things aren't "entertainment": those things are life. A virtual economy will see all of the improvements made to their living conditions in the same way: some of it is entertainment, and they will confess they could go back to living without all of it, but they won't want to, and they'll work hard to make sure that they don't. So I don't think these things being just "Entertainment" is going to make that big of a difference.

As for being able to steal everything they need, I think human psychology defeats that (as long as your virtual citizens are mostly human). We have this drive to possess what we don't have and everyone else does. Things we have rarely satisfy in the way we imagine things we don't have will. And appearing successful and up to date to our associates is important to us. And so even though you can get old stuff for free through pirating or abandonment, people will still want to be cutting edge and pay for the best and newest stuff.

The other way in which intellectual property maintains its value is custom work. How much would you pay to have a game made the way YOU want it, instead of the standard rules, story line, and so forth?

Its also worth remembering that people value being important. People want to matter to others, and to be respected. You can't replace that with NPC's, because NPC's who are good enough become people themselves just add to the demand for importance.
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Old 08-14-2020, 11:32 PM   #3
AlexanderHowl
 
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Default Re: Virtual Economies [Ultratech]

Virtual labor would be labor done by digital entities (or by biological entities who were working in the virtual economy for one reason or another). At TL10, a Volitional AI of IQ 10 only needs a Complexity 8 program, a power source, and a Web connection to live comfortably. A TL10 biocomp high capacity megacomputer could easily maintain 20,000 individuals with a cost of $30 million (and the equivalent of a small apartment).

While there is an upfront cost of $1,500 per inhabitant, the rent and utilities for the community would likely be $1 per month per inhabitant. If the biocomp megacomputer was bought on a mortgage, the monthly cost would be $20 per inhabitant for the first twelve years, but it would drop to $1 per month after twelve years. While that would not justify a 1,000:1 currency conversion, it would justify a 100:1 currency conversion, as $V100 would be a sixth of the V$600 Status 0 standard of living, and would pay the R$1 of rent. Inhabitants would likely spend a few hours a week working in the real world in rented robot bodies during the first twelve years and then transition completely to the virtual economy after the paid off the buy-in.
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Old 08-14-2020, 11:53 PM   #4
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Default Re: Virtual Economies [Ultratech]

A volitional AI, being just as smart, intuitive, and creative as a human, can reasonably be expected to need the same degree of mental stimulation, etc., when not working (and the same sort of non-working downtime to rest in). Therefore they'll need some kind of high-end VR environment, plus assorted entertainment programs, and so on. Aside from possibly using up more capacity than the computer you've provided, these will cost money, and as they'll probably be licenced rather than owned outright, and will need upgrades, DLC, and so on, they will be a substantial on-going cost per AI.

Using the $600/month cost of living to work out the value of their labour makes no sense. The expected pay (B517) should be used, which probably makes the AI's labour very cheap, especially if they are slaves and thus only need a good enough AI and entertainment package that they won't go nuts or rebel and force a hard reset to the straight-from factory condition too often. If they are free, they'll want spending money, etc. and will cost more.
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Old 08-15-2020, 12:56 AM   #5
AlexanderHowl
 
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Default Re: Virtual Economies [Ultratech]

Yes, computer programs, which can be shared with everyone on the same computer. If the 20,000 individuals each buy a copy of a different program, they will each have access to 20,000 different programs because they are contained within the same computer. If they wished, they could copy the programs multiple times and, as long as they do not give transmit it to anyone outside of the computer, their violations of copyright will not be detected (assuming that they could actually prove anything when they have 20,000 digital natives deciding not to cooperate with the authorities).

Since the real needs of the AIs are minimal, they would be able to work for much less than a worker in the real world. If there are an AI for every worker in the real world, any rational real world nation would likely make them their own nation in order to prevent them from dominating their politics rather than making them equivalent citizens. Heck, it would likely be worth it for a TL10 real nation to pony up $600 billion to house four hundred million AIs in 20,000 'consulates' and just have to deal with an ambassador and 20,000 consuls than have to go about satisfying four hundred million new virtual voters. Heck, it would be worth it to continue to pay them $60 billion a year just to keep them quiet.

Last edited by AlexanderHowl; 08-15-2020 at 01:01 AM.
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Old 08-15-2020, 06:57 AM   #6
Tyneras
 
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Default Re: Virtual Economies [Ultratech]

99% of the virtual economy will vanish into itself. They have very few real needs and have their own virtual worlds to explore.

For practical purposes, treat the VR world as a separate universe that does a minimal amount of trading for servers, electricity and bandwidth but otherwise only cares that the real world remains politically stable and useful. The same way real nations treat each other most of the time.

Given the potential speed differences between the two, we will likely interact even less.
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Old 08-15-2020, 08:13 AM   #7
ericthered
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Default Re: Virtual Economies [Ultratech]

Thoughts about external costs....

Physical needs will be comparatively low, but the demand for internet will be equal to or greater than a physical persons, and you probably can't leverage economies of scale very much. And if you want useful work out of these virtual people in the physical, they probably need the web. add $5 per month per inhabitant.

The computer will need to be replaced every so many years. I don't know if this number is 10, 20, or 50, but I doubt its 100. That adds 3$ to 15$ dollars per inhabitant per month. I think the mortgage calculations were off by a decimal point.

The physical security on this thing is important. You do not want someone breaking in and taking off with your servers. Some of this is paying security, some of it is city property taxes. I'm not sure how much this adds. Its probably $1 a month per inhabitant or so. That's a little under 1% of the value of the facility per year.

if you don't leverage the bio-comp, everything costs 5 times as much per inhabitant, and the bio-comp is not something I'd assume in very virtual economy setting.

I'd think copyright would be fairly enforceable. I'm also not so sure that it would matter. diluting software over users and time decreases the cost per copy, no matter what that looks like.
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