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CHARLIE | trade.tf 12 Mar, 2013 @ 1:45pm
Key inflation; State ur kase.
After a long discusion about Bills Hats, keys, inflation, devaluation and alian landings, which you can find here.

https://steamhost.cn/steamcommunity_com/groups/tf2outpost/discussions/0/864961721715402543/

I have decided to open this up for some voting and opinions. I have included here the final post I made that included several theories. I hope to get a wide range of opinions and maybe more brainstorming.

BTW, I want to thank Kahgro, samhudson333, norby89 and mostly uranium235 for their participation in that discusion.


1. Russian ref farming idlers coupled with new regular ftp idlers which increased with new tux ftp idlers.

This is a pretty popular explanation and I think most false. In order for idle farming to be the cause, than growth in the volume of ref, week over week, would be expected to lead the growth of the trading price of the key. Instead we have ref growth well behind key price growth (need more data tracked for longer period of time). This may be a factor but by itself, no.

2. Keys are being sold in secondary market for cash which means there are less willing sellers in primary (trading) market even though the total amount of available keys doesn't change. The two demanding forces pull on eachother with trading price effected but not the secondary market price. Multiple reasons possible for that. Net effect is increase in ref price of the key.

This is very plausible and probable also increasingly scary. Let us imagine that we have 100 major holders of keys. 50 of them decide its time to cash out, after 2 years playing/trading in the game they have had enough and its time for a pay day. All the while the other 50 decide to continue trading at this prestigeous level. The most likely buters of alot of keys are the other major key holders. Not exclusively but enough so that most of the keys end up in fewer hands. What has occurred is that there are less competitors in the market for metal and goods. Thats how it starts, not by design tho. Once a few start with higher price than more jump in because there are less holders of keys who sell on open market. The gas station example is relevant here. It is less likely there will be price slashing when there are fewer gas stations in town. They will cooperate in a sense. Then others ask themselves "why would I sell lower" and do the same number just so they don't sell out faster.

This is more likely to occur with few holders of many keys than many holders of some keys, obviously.

What should happen is that the price of keys in the secondary market would rise in response to fewer sellers but there appears to be a large amount of major sellers so as to not cause that.

3. The next theory is one I have proposed for consideration. That is that keys are being hoarded in anticipation of the next crate release. There are alot of interesting unusuals that can show up in the new release. The all class antlers or beufont. The mercs muffler, wonderland wrap, rail spikes, mutton man or what if the teufort kickers become the first shoe unusual. Any of these items would initially be worth massive sums 20 - 50 buds possibly. That "what if" can be a very powerfull thing.



NOW THAT THE TIME IS UPON US WE SHALL SEE WHAT HAPPENS
Last edited by CHARLIE | trade.tf; 12 Mar, 2013 @ 8:36pm
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Showing 1-13 of 13 comments
Hudson 12 Mar, 2013 @ 1:54pm 
It's not a matter of choosing a reason. I and many others have provided evidence that shows the facts of why a key is worth more in refined than it was months ago. Idlers are universal, there is no group of Russians disturbing the economy. There are thousands of idling accounts a week, and more players every day. This means there are more and more drops as time goes on, leading to more ref in the market, and thus a lower value.

Keys have been sold in the secondary market for as long as trading existed. This is not some new thing, and did not cause a sudden spike in key price in terms of refined. However, when the steam community market was introduced, I and other key sellers noticed a sizable spike in key value, due to a majorly decreased supply in our grey market.

You have no evidence that anyone is hoarding keys, and even if this was true for maybe ten people, there's currently 500,000 keys in existence. A few hoarders couldn't put a dent in that, nor effect the value in any noticeable way.

The simple fact is, the supply of refined increases at a rate higher than the supply of keys increases, thus the price of a key in terms of ref increases, due to a decrease in value of refined at a rate faster than the decrease in value of keys.

It's very basic economics, a high school level course will give you the knowledge needed to see how obviously correct the explanation I just gave is.
#1
CHARLIE | trade.tf 12 Mar, 2013 @ 2:02pm 
I noted already that from the last accepted vote and the most recent suggestion the increased volume of ref in the game would not have kept pace with the increase in price of the key. One would expect the % growth in ref to actually lead, or be greater than, the percent growth in trading key price. If we r at 500,000 keys than that higher than the last time I looked. Please gather DATA.

I use Russian because that is current myth.
#2
Hudson 12 Mar, 2013 @ 2:06pm 
Every price in the game does not update every time the value of an item is manipulated. People are heavily influenced by pricing guides, and are often only willing to sell for the prices they give. Perhaps the price lagged behind the value, and the market suddenly caught up. Perhaps sellers are only willing to sell for a scrap above the market price, which in turn raises the market price, so each backpack.tf price change shifts the market. There may be many factors at play in the day to day price shifts in a key, but over all, the price in terms of refined is inflating due to an increasing supply of refined.
#3
CHARLIE | trade.tf 12 Mar, 2013 @ 2:19pm 
The attention and focus paid to keys, plus their importance, makes it the most updated item in the game. New suggestions come in almost biweekly. With this item it is inconceivable that there is lag. Along with that the growth in refined volume is a third of the trading price growth of the key. Its not close. Sorry.
#4
Hudson 12 Mar, 2013 @ 2:25pm 
It's unreasonable to think that change in supply and change in price is a 1:1 ratio. While supply is ever increasing and value is ever falling, the values do not match up in a way like that. You cannot say "There's 20,000 new ref this month, that means price mst fall by x!". Value is a function of supply and demand. Just because supply has changed does not mean its value has changed in the same way; it's likely the demand has changed as well, leading to a different change than one would expect in a single variable situation. The cause of this situation is the inflation in supply in ref. Sorry.
#5
CHARLIE | trade.tf 12 Mar, 2013 @ 2:29pm 
Where is your data.
#6
norby89 12 Mar, 2013 @ 2:46pm 
I promised I'd stay out of this convo but I just have to drop a few notes. I chuckled at the "russian farmers" part, where do you get this info from? For as long as I've been trading I've met many metal farmers, brazilians, italians, mostly americans but never a russian farmer. Did you take the fact that there are tons of metal farmers and that there was talk about the russian key mafia, put those 2 together and create your own myth?

Anyway, a couple things to take into consideration. stats.tf gives you a close estimate, but you can never rely on it as an accurate source of data. There are private profiles, unscanned inventories, items are consumed/deleted every day, those numbers will never be accurate. Furthermore carders/hijackers will force duped items into the market, that's why the number of buds and keys are ever increasing. Just because the number of keys is increasing it doesn't mean those are being bought from the Mann Co Store (even though there are still people who buy from there, knowing they can get it cheaper from the Market, don't ask why).
Last edited by norby89; 12 Mar, 2013 @ 2:49pm
#7
CHARLIE | trade.tf 12 Mar, 2013 @ 2:54pm 
"I chuckled at the "russian farmers" part, where do you get this info from?"

Dude, keep up on the myths. There r supposedly these russian programer with hundreds or thousands of Linux accounts somehow running 24/7 simultanously. LOL
#8
CHARLIE | trade.tf 12 Mar, 2013 @ 2:58pm 
"Anyway, a couple things to take into consideration. stats.tf gives you a close estimate"

You work with what u got. Its going to be good enough to run percentages on. This weekend Ill check again to graph it.

I pulled u in Norby. Luv the passion.
#9
norby89 12 Mar, 2013 @ 3:04pm 
Originally posted by F | CHARLIE:
I pulled u in Norby. Luv the passion.
Sorry I'm out again, I only posted because I found the idea of having "russian farmers" flooding TF2 with metal amusing. :P
Last edited by norby89; 12 Mar, 2013 @ 3:05pm
#10
CHARLIE | trade.tf 12 Mar, 2013 @ 3:33pm 
Originally posted by norby89:
Originally posted by F | CHARLIE:
I pulled u in Norby. Luv the passion.
Sorry I'm out again, I only posted because I found the idea of having "russian farmers" flooding TF2 with metal amusing. :P

I know, u can almost see them in some warehouse surrounded by servers.
#11
Hudson 12 Mar, 2013 @ 6:00pm 
Originally posted by F | CHARLIE:
Where is your data.
Where's yours? You don't need a hundred charts and analytical readings to understand economics at a highschool level. I'm an econ major, I was one of the biggest cash traders in this game, I know what I'm talking about here, I don't just make up things that sound cool and prance them around as fact. Supply goes up, price goes down (ceteris paribus, of course).
#12
Uranium235 12 Mar, 2013 @ 10:34pm 
We all know there are multiple reasons why the Key price in terms of Metal is increasing, not just one. What reason has what part and to what degree is impossible to tell.

But the rapid increase (thus devaluing of Refined) since Oct 2012 has only little to do with new Refined flooding the market.
There is no reason I can see why the injection of new Refined by idling / new / active players should have changed that much and fast.
There are new players and idlers, but I would assume just as many that abandon TF2 with their Metal in their account. Not everyone cashes out.
That's why it's futile to look at absolute numbers without having more data only Valve could supply.
I strongly feel it would only explain an increase of the Key prices in Refined at a rate not much different to the 1-2 years before October 2012.

It makes a lot more sense to look at what fundamentally changed since Oct 2012 and start drawing conclusions from there.
Two things happened: 1st Halloween and then the Community Market, which undoubtedly has an effect on new Keys bought in Mann Co, thus very likely decreasing the number of Keys in circulation and therefore lowering the supply of Keys for Refined.

A likely increased / increasing demand for Keys is the other big factor. Reasons being many again (among them hoarding / safe haven), and without being able to tell what reason has what part and to what degree.

So, supply and demand, that changed due to the two mentioned events - I have absolutely no doubt - are THE main reasons for the rapid Key price increase in terms of Metal.

If you look at people that buy those Keys now, I have yet to see evidence of people continuously buying Keys for Refined with backpacks that seem to have a never ending supply of Refined from idling, aka "The Russian Refined Farmer" or short: RRF. :)

I am not a big time Key trader, so I can't really say how common they are. But I would guess there are not that many compared to the overall market.
My guess, they rather sell for PayPal directly. But the Refined for PayPal market is not very big either to make a huge difference, in my experience / opinion.

Anyway, Keys now have a relatively stable value (NOT price in terms of Metal), and that's what people like to have, stability.
Last edited by Uranium235; 12 Mar, 2013 @ 10:46pm
#13
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