Piddle Co. - Merchantilism: Pros vs Cons?

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    • Piddle Co. - Merchantilism: Pros vs Cons?

      These are just some things I wanted to cover and have sitting somewhere relatively accessable: An introduction to valuing resources.

      "Is Worth?" - A Compact Guide to Valuing Copper Ore and Bar.


      TLDR:

      @15% RRR
      1 T2 Ore = 1.176 T2 Bar*
      1 T2 Bar = .85 T2 Ore

      @30% RRR
      1 T2 Ore = 1.428 T2 Bar
      1 T2 Bar = .7 T2 Ore

      So, you wake up, not feeling great, on your island in Bridgewatch. You may have over induldged and you have no recollection of the night before. All you have to your name is a shirt, a pair of bunny slippers and an Ox, carrying 1000 T2 Copper Ore. How did you get it? How much did you pay? No one can ever find out. All we can do is move forward.

      You unmoor your dinghy "BoatyMcDeadMeme" and paddle to Bridgewatch proper. As you are tying off your faithful vessel, a deepening shadow looms over you and you turn to look into a face that is the kind of face you would rather not be looking at ever, even less so in current circumstances. The face makes a noise with parts of itself and then says, "You owe." Involuntarily you spout out a befuddled, "What?"

      "You... Owe...", parts of the creatures arms and body creak as its watermelon sized fists clench. It seems that you had incurred a sizable debt the evening before, and this gentleman is here to settle it. You explain your situation vis a vi, no money, no friends, just Ore, and a shirt, slippers and Ox that you can not sell due to its sale offending dark powers that hold sway over your soul. You promise that you will use the ore to promptly settle all outstanding debts but, while seemingly satisfied by this, the face explains that its desire to thrash you violently is a function of time and that it would be best if you finished your tasks in an efficient manner.

      We wander off the pier and head toward the market to get a lay of the proverbial ore landscape. Due to our fruit fisted new friend, we do not have time to do anything but refine the ore into bar, and so can't craft items with it. However, because of your pact with dark powers, your Ox can teleport you effortlessly around the world, ignoring all travel related time and risk.

      Unfortunately, we failed to inquire about the size of the debt we owed. Forcing us to do everything we can to maximize the amount of silver we get, before it is too late...


      Step 1


      Learning the relationship between Copper Ore and Copper Bar.


      If you take 1 Copper Ore to a smelter, and click Craft. You will recieve 1 Copper Bar and the Resource Return Rate (RRR) in Copper Ore.

      For example, if the RRR is 0.

      1 Copper Ore => 1 Copper Bar


      If the RRR is 15%.

      1 Copper Ore => 1 Copper Bar + .15 Copper Ore


      So for the time being all we have to care about is that:

      (T2 Ore) = (T2 Bar) + (RRR)(T2 Ore)


      The reason this looks like a math problem is, that it is a math problem, and can be treated in most ways like one.

      For instance we can simplify the like terms, by subtracting (RRR)(T2 Ore) from both sides.

      So if RRR is 15% we have,

      1 T2 Ore = 1 T2 Bar + .15 T2 Ore

      or

      .85 T2 Ore = 1 T2 Bar


      All of which is important to know because in Bridgewatch Ore only has basic RRR which is 15%

      So with some more math: Our 1000 ore divided by the amount of ore it takes to make a bar .85 we find that we can turn our 1000 ore into 1000/.85 = 1176.47 bars.

      So if we use a smelter on our 1000 ore in Bridgewatch it becomes 1176 bars or,

      1 T2 Ore = 1.176 T2 Bars


      BIG LETTERS

      The formula,

      1 T2 Ore = 1.176 T2 Bars

      is the same as the formula,

      .85 T2 Ore = 1 T2 Bar


      Both of them ALREADY have the compounding effect built into the formula.

      I see many people get to this point, and then add more numbers to the formula to account for the compounding nature of RRR. This is a mistake.


      Because of our teleporting Ox we also have access to the smelter in Thetford. Thetford is granted a bonus to the RRR of ore refined there. It recieves an additional 15% for a total RRR of 30%.

      This changes the above formulas into,

      1 T2 Ore = 1.428 T2 Bar

      and

      .7 T2 Ore = 1 T2 bar.


      That means that if refined in thetford 1000 ore becomes 1428 bars. That is 1428-1176 = 252 extra bars just by teleporting to Thetford to refine our Ore instead of in another city.


      What we learned so far.

      More RRR is better. We should refine in Thetford instead of Bridgewatch since our teleporting Ox makes it so that there are no travel costs.

      We now know that we have either 1000 T2 Ore to sell or, if we refine them in Thetford, 1428 T2 Bar to sell. Which is what we will use going forward, for additional steps. Next time I'll talk about relevant market pricing across AO for ore and bars and how we can use them to help us on our quest to continue questing, with all our parts still attached and in working order.


      MORE BIG LETTERS

      I just wanted to talk about two things related to this topic that many players may not know. First, Albion Online uses a lot of hidden decimal points and sometimes awkwardly rounded numbers. The more you get into the nuts and bolts, the more you will find. I mention this because along with the patch that added RRR bonuses to rim cities, I believe that.enough adjustments were made to the scaling of the return bonus to move the 1 Ore = 1.176 Bar formula for 15% RRR, closer to 1 Ore = 1.18 Bar.

      Second, the way AO works currently Crafting 1000 T2 Ore into Bars in one batch, and crafting 1000 T2 Ore into Bars individually, will give you significantly different results. If you craft in large batches you get nearly 0 variance in the result. Why I think this is, is beyond the scope of this post. Just know that if you move the slider to 1000 and click craft you will get a very mathematically precise amount of bars, but if you click craft 1000 times individually you will get a result that is somewhere around the the mathematically precise amount.

      The three attached images are of me refining 1000 Ore in a single batch and placing them in the bank, and then refining another 1000 Ore in 1000 batches and leaving them in my inventory. I did this in 2 non-bonus royal cities and also Thetford with the bonus.

      Discord: Piddle#7413
    • Disclaimer: I don't know what I am talking about and listening to me about anything is the most dangerous of folly.

      TLDR: Don't lend people money at less than 12% interest per month. If the people you are giving money can't trust you, then you should not trust them. Gold is going to 2k so if all you want is 6% a month to keep pace with the world, buy some gold. No one can run off with your gold. It is what gold is for.

      ---

      The risk free rate of return in AO is about 6%, per MONTH. If you are handing someone else your money in AO. Subtract 6% from whatever they are paying you monthly. That number is what you are earning by giving that person your money.

      This is the single most befuddling part of all the AO investment schemes. You are essentially lending people your money for free and accepting all of the risk, for almost nothing.

      The three times I handed a person in AO my AO money I received between 4-10% per WEEK.

      That is the sort of return you should expect for allowing someone else to use your money to make money for themselves.

      You should also be mistrustful of anyone in a video game that needs to borrow video game money. Borrowing money is something that people without money have to do to get money. It isn't something that people who are good at earning money find themselves doing all that often.

      ---

      Those three times I handed someone AO money, they explained in more than enough detail their entire plan to increase their and my wealth. They didn't pretend it needed to be super secret in order to protect themselves. If someone can't be open and honest with you. Why would you ever trust them with your money?

      I always want to know what the people I am handing money are doing with it because I don't want to end up working in direct competition with my own money. I don't want to be invested in someone who is the counter party to my own transactions. That would be what we call, "Usually, not great".

      ---

      They adjusted the discount rate for the second time now. When the discount rate was 1, the pivot point was 1000 silv = 1 gld, When the discount was 1.5, the pivot was 1500 silv = 1 gld. Both of those pivots were crossed through economic activity and various swap transactions that I understand are in the game. The discount rate is now 2 and the pviot is 2000 silv = 1 gld. It may not be this month or this year, but you are going to be living in a 2000 silv = 1 gld world in the future.

      It isn't voodoo, or guessing, it's mechanically designed into the game. If gold isn't introduced at a rate faster than it is removed, the price of gold goes up relative to silver. The game removes gold in a variety of ways, both widely known and not.
      Discord: Piddle#7413
    • so my takeaways:

      1) Great post and great info btw. I've been looking at the compounding formula myself, but I've been just doing it manually in excel for each 15% returned (the noob way), so say yo have 15% RRR on 1000 units, you get 150 units back on the 1st craft. Then you get 15% of the 150 units, resulting in 22.5 units, then you compound again until there is none. At the end you add it all up. You just gave us the faster way. Thank you for that!

      2) The more breathtaking conspiracy theory:
      Couple months down the line - this is where Piddle wins over the crowd with his usefulness and insight of economical knowledge, gets elected onto the RT, and then opens up an investment fund with 12% return (citing the numbers posted in this thread as 12% ROI being a good value). At the same time Saya gets kicked off the RT, as the evil "crook" and "scammer" of Albion and disappears into the shadows.

      2 years from the start of Piddle's investment fund, he disappears like Saya did in April of 2019. Except with 10x the amount of funds that Saya initially stole. In the end - Piddle and Saya were the same person behind the scenes. Not only did Piddle/Saya create a good-cop, bad-cop scenario, but Piddle managed to "show" the community that Saya's 6% RoI was bad, while his 12% is good (he was able to keep up 12% ROI because he used the money Saya stole - as essentially Piddle+Saya is the same person, and its easier to compound stolen funds, thus creating a pyramid effect and promising "over-inflated" ROI that appears to look very good on paper).

      Theoretically 2 years down the line another person could appear, promising 24% ROI (of course it would be the same person who ran Piddle/Saya accounts) and he would be getting that ROI using the money Saya stole (with her 6% ROI scheme) plus the money Piddle stole with his 12% ROI scheme.

      And the cycle would continue...

      #holyshitplottwist


      Disclaimer: everything I type on a video-game forum should be taken with a grain of salt.

      The post was edited 1 time, last by Captainrussia ().

    • It's a lot harder to run a ponzi scheme when your returns are high. Simply as a function of the amount of new money you have to take in, to pay off the older money each month. At 25% You have to be finding a new investor for every 4 current investors, every single month.

      It is one of the reasons I am always so suspect over the "investments" in AO which are essentially savings accounts. At 6% it is sort of trivial to keep the ball rolling from month to month. You can even just buy gold with most of the money people give you. You also have less trouble with people who want to remove their monthly payments from the fund, rather than continue reinvesting.

      As such, the best way to protect yourself, if you decide you just really have to give someone else money, is to always take your monthly payment in silver and not reinvest it. This limits your worst case scenarios.

      I had similar thoughts, about people running a secondary con, either Saya or any number of people who would be interested in copy catting. It's most of the reason I created that post. I didn't want to put it in the trade section, or in the most recent of savings accounts threads though.

      I have sort of mixed feelings about Saya. I am not incapable of appreciating the time and effort that was needed to in the end do a runner with a pile of money. Even connng people out of money is work. I also have some experience in managing other peoples money. It is miserable and time consuming. Because it is miserable and time consuming you need to make more money doing it than if you just run your own money. The returns they offered didn't reflect this at all. It looked more like a charity for people who were bad at math. Which I would have taken at face value, except that Saya was the lord high edgelord of taking advantage of broken systems and peoples lack of accurate information about the game. You can be Gordon Gekko or a cute happy go lucky Korean woman who wants to make friends and help people, but in my experience you can't be both of those things at the same time. It was very confusing to me and I hate being confused. So now it all makes much more sense and I feel better.

      I think that Saya is great for the long term lore of the game. People will be talking about this for years. However, I think that people role playing as little investment managers and investment manager investors is also great for the game. People really seem to love it. I don't understand why, but they do. So, they should be able to do it, but with a better understanding of what to look for and what to be suspicious of, going forward.

      In the end, taking advantage of peoples trust isn't smart or clever. People want to trust each other. Trust is good for everyone. So taking advantage of people in that way was bad for everyone and makes the person a bad person. But, I have lots of friends who are bad people. So it isn't really a huge deal breaker for me.

      I am also a bad person. I just prefer taking advantage of people in ways they never find out about. Like paying f2p players 10k silver per hour for their labor and selling it for 60-100k. They are happy. I am happy. Everyone is happy. In 6 months they will be looking at the market and thinking, "Man I was selling this stuff for less than 10 silver and now I am buying it for 30 silver, and shake their fists at the cruelty of inflation or economics, but they won't be shaking their firsts at me.
      Discord: Piddle#7413
    • Thanks for the above post. And yes, as I already disclaimed, my previous post should be taken with a grain of salt and in no way was directed to offend you (and you did not get offended, which is good). I just could not resist posting another conspiracy theory about you = Saya, obviously in correlation to all the things that have been happening lately with Saya's scam.

      Piddle wrote:

      I think that Saya is great for the long term lore of the game. People will be talking about this for years. However, I think that people role playing as little investment managers and investment manager investors is also great for the game. People really seem to love it. I don't understand why, but they do. So, they should be able to do it, but with a better understanding of what to look for and what to be suspicious of, going forward.
      Yup which brings me to conspiracy theory #2 - Saya's scam was sanctioned by SBI. Potentially not from the very get-go, not from 2 yrs ago when she started her investment gig. Maybe they approached her recently and made an offer, like in the past 6 months or so. That is why her story is so confusing and so difficult for people to answer the question of "why she did it?" and "why now?", why not take another 300-600 mil? Because she originally wasn't planning to run off.

      My conspiracy theory answer to that - is that her scam correlates very closely with the F2P launch. SBI wanted to make an article (probably still in the works for the next community update) akin EVE Online - advertising "the biggest scam in the history of Albion", just like EVE Online used to make gaming news headlines with scams totaling $20,000 in virtual goods (and more). Or battle reports where thousands of $$ dollars of assets were destroyed.

      Why would SBI be interested in making such an article? (again just a theory) - because a) Its obvious advertisement, and its in Sandbox style b) Because SBI has been copying 95% of things from EVE over the past 5 yrs (which Im not complaining about btw).

      Hope ya'll enjoyed the read ;)
    • Project F2P Buy T2/T3 Final Report (Resources)

      Our final inventory is as follows:
      (Resources)
      T2 Bar/Ore 3836 (in x999 stacks)
      T2 Plank/Wood 2499
      T2 Cloth/Fiber 1357
      T2 Leather/Hide 2580

      T3 Ore 3961 (in x999 stacks)
      T3 Wood 2551
      T3 Fiber 2897
      T3 Hide 3424

      T3 Bar 2570 (in x999 stacks)
      T3 Plank 755
      T3 Cloth 1473
      T3 Leather 1644

      Project operational only 3 of 4 planned weeks due to improper planning. Despite repeated roadblocks and a massive reduction in the scope of the entire project, it is hard not to be at least somewhat satisfied with the outcome. If such an opportunity were to reoccur, I feel confident that I could at least double the inflows, given current conditions and restraints.
      Discord: Piddle#7413
    • Player112 wrote:

      *scratches head* Something is happening here but I don't know what. How he stores 3836 stacks of T2Bar/Ore? What kind of magic is this?
      1) take the number of slots in a given chest (or better - the biggest chest, that is one on a guild island).
      2) Divide 3836 by that number
      3) You will get the number of chests that he has filled up to the brim with stacks of Ore

      You should already know this if you wanna claim yourself to be the "bestest" economist in all of Albion...
    • Captainrussia wrote:

      1) take the number of slots in a given chest (or better - the biggest chest, that is one on a guild island).2) Divide 3836 by that number
      3) You will get the number of chests that he has filled up to the brim with stacks of Ore

      You should already know this if you wanna claim yourself to be the "bestest" economist in all of Albion...
      I never claimed to be the bestest chest expert in game. That title belongs to you. Can you add up all his numbers and tell me how many chests?
    • Captainrussia wrote:

      Player112 wrote:

      *scratches head* Something is happening here but I don't know what. How he stores 3836 stacks of T2Bar/Ore? What kind of magic is this?
      1) take the number of slots in a given chest (or better - the biggest chest, that is one on a guild island).2) Divide 3836 by that number
      3) You will get the number of chests that he has filled up to the brim with stacks of Ore

      You should already know this if you wanna claim yourself to be the "bestest" economist in all of Albion...
      You should know to account for weight before trying to become a teacher, also who says he needs any chests, if its a simple buy low > sell high he flip it all from the AH


      Piddle wrote:

      Project F2P Buy T2/T3 Final Report (Resources)

      Our final inventory is as follows:
      (Resources)
      T2 Bar/Ore 3836 (in x999 stacks)
      T2 Plank/Wood 2499
      T2 Cloth/Fiber 1357
      T2 Leather/Hide 2580

      T3 Ore 3961 (in x999 stacks)
      T3 Wood 2551
      T3 Fiber 2897
      T3 Hide 3424

      T3 Bar 2570 (in x999 stacks)
      T3 Plank 755
      T3 Cloth 1473
      T3 Leather 1644

      so..
      AH seems to show T3 refined being sold in bulk for around 50-60, i didnt check very well.
      BM shows sell orders for a t3 bag at 2500 silver, i didnt check very well.
      8x cloth, 8x leather cost = 960
      Sell for = 2500 - 960 = 1540 silver profit, 2.6x ROI, not including resource bonus from crafting in the correct city or factoring in if he bothers to fill books.

      1500 x 999 t3 leather
      1500 x 999 t3 cloth
      3000 x 999 = 2.997m T3 refined @60 ea = 179.820M
      crafts into 187k t3 bags, @2.5k ea is 468m in sales, again not including any resource bonus or factoring in laborers.

      If he maintained 2.6 ROI overall it would be billions of profit, no doubt he could do better.

      The post was edited 2 times, last by F20 ().

    • Player112 wrote:

      Captainrussia wrote:

      1) take the number of slots in a given chest (or better - the biggest chest, that is one on a guild island).2) Divide 3836 by that number
      3) You will get the number of chests that he has filled up to the brim with stacks of Ore

      You should already know this if you wanna claim yourself to be the "bestest" economist in all of Albion...
      I never claimed to be the bestest chest expert in game. That title belongs to you. Can you add up all his numbers and tell me how many chests?
      Build your own AH on your own guild island and list your items for 1 silver u have no limit on storage ( cost a bit silver but who cares when u have so much materials).
      just put in a buy order how much u want out from your private AH then u dont need to buy for those 2-3 mil guild chest slots
      T8 Ore T8 Stone T6 wood
      400/400 Trading :-/
    • TradeMark wrote:

      Build your own AH on your own guild island and list your items for 1 silver u have no limit on storage ( cost a bit silver but who cares when u have so much materials).just put in a buy order how much u want out from your private AH then u dont need to buy for those 2-3 mil guild chest slots
      If it took 3 seconds to list each stack on a market. It would take 24 hours of just entering orders each month to store it this way. I try not to spend active play time doing anything that isn't earning me at least 2M an hour these days. So for me that would cost 48 Mil in opp costs a month.

      48M buys a lot of wheats and ores.
      Discord: Piddle#7413