top of page

Abolish the Diamond Standard: A Take on the Minecraft Economy

Updated: Mar 5, 2023

By: Aidan Attance

The Minecraft Economy

Minecraft, a game that was first released to the public as far back as 2009, has gone on to revolutionize the field of gaming. In 2019, it became the most-sold videogame of all time, and as of 2022 resides at a staggering 238,000,000 copies. Minecraft is a game known for its versatility. The game provides no “goal”, choosing instead to release the player into an open sandbox where the only limit is their imagination. Because of this freedom, many players who choose to play Minecraft’s multiplayer naturally begin to develop their own economies.

Their economies involve the trade of resources for the benefit of each player in their individual projects. Say, for example, a player needs 40,000 blocks of diorite to build a torture dungeon to house their captives. He might decide that rather than mine all those blocks himself, he can hire people with better tools to do so for their desired price. Sometimes this involves barter trade, paying them the specific resources they need. However, this can also work with a standardized currency that the laborer may accept, which they can use in exchange with a different player for more specific resources that that player specializes in. Players often find that these standardized currencies are much more efficient for their economy but choosing the wrong currency for the task can sometimes do more harm than good.

The Diamond Standard

Diamond is the most common currency used in a Minecraft economy. The reason for this is the diamond’s inherent in-game value. It is needed for the best tools, the best armor, and is a necessity for any large-scale project. Its immediate advantage is that all players need and want it. Furthermore, if the economy crashes, diamonds maintain value beyond their market price. These properties of diamonds mean that players naturally trade for them out of necessity, using the surplus to trade for other goods. Diamonds have two main issues, however.

A Value Beyond Trade

First, is the fact that they are such an important utility. Diamonds are used to make tools, tools that help to make every aspect of the game more efficient. Without diamonds, progression for any grand project is near impossible. Every player would benefit if diamonds were large in supply because each person specializing in their own market would be able to produce more of their own resource, trading them for cheaper prices. However, since diamonds are treated more as a currency than as a resource, players are encouraged to hoard them and artificially trade them at high prices. Naturally, this means that the utilized supply of diamonds is much lower than the actual supply, stifling the growth rate of the economy. This also means that each player is incentivized to search for their own diamonds, which is highly inefficient. Rather than specializing in what they do best, they may be spending hours digging through a cave with an iron pickaxe. During this time they aren’t producing anything, and the economy suffers as a result.

Hyper Inflation of Currency

The other issue with diamonds can be simply stated as hyperinflation. In the early stages of the game, diamonds can be considered rather rare. However, as tools improve, they become much more common. So common in fact, that many players find it more efficient to mine for diamonds rather than trade for them. In the late game, a player can spend one hour in the mines and leave with 32-64 diamonds. Say that a player spends a day in the mines. Within one day they will have gotten enough diamonds to decrease the value of the entire market by multiple magnitudes. Furthermore, this player is no longer encouraged to sell any goods, because after one day of mining they have enough diamonds to last them a lifetime at the current market prices. And prices don’t necessarily increase to meet the number of diamonds in the market.

Diamonds have a utility, and players that don’t mine still need them, and will be willing to sell resources at the price at which they value those diamonds. This number is often very low and doesn’t reflect the true value of the diamonds. Conversely, even if they raised their prices, players who possess large quantities of diamonds won’t pay these “outrageous” prices because the utility value of the diamonds may exceed the price demanded. This means that market prices don’t rise to meet the deflated value of the diamonds, resulting in a market failure in which no player is incentivized to sell any goods unless they expressly need diamonds. What this becomes is essentially a barter trade system, where players choose to trade resources for other resources because the purpose of shops is obsolete.

A Better Minecraft Currency

Imagine instead that one player specialized in diamond production and sold them to other players in exchange for a separate currency. This would mean that diamonds would be used exclusively for their utility value. This would lower the surplus of unused diamonds and lower the time wasted mining for these unused diamonds. Players could instead focus on their own specializations, ultimately benefiting every player and allowing for larger projects. What currency could accomplish this?

The answer isn’t emeralds, which have a worse inflation rate than diamonds, and the answer isn’t gold, whose ease of access for late-game players would leave early-game players struggling to match prices. The answer is dead bushes. Dead bushes require no advanced tools to acquire. They are also one of the few plants that are non-renewable, meaning that there is a total number of them in the world and this number cannot be increased. What this means is that advanced players will not be able to monopolize the dead bush market by acquiring large numbers of them through farming and scavenging.

Once all the dead bushes from the effective local area have been obtained, the most viable option for increasing one’s wealth will be to trade other resources. This will keep the economy alive and make sure that players who do not run large-scale operations will be able to participate through whichever small means they choose. The main issue with a dead bush economy is establishing confidence in the dead bush. It would require a large seller to deal exclusively in dead bushes in order for people to build the trust necessary in a currency which holds no other value. Regardless of this fact, however, it is clear that the diamond standard is unsustainable if an effective economy is to be established.

37 views0 comments
bottom of page