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Minecraft multiplayer servers struggle with excess money supply and inflation

As a middle schooler, I often played on Minecraft multiplayer servers. The sandbox video game offered almost infinite ways to play, but I would almost always spend my time in multiplayer Skyblock servers. Skyblock is a gamemode offered by many Minecraft servers. In it, a player starts on a small floating island over a void with few resources and can also access the “mainland” area to purchase additional supplies and visit other players’ islands. (Hence, being in the “sky” on a “block.”) Though I enjoyed the video game, playing on Skyblock servers would often leave me frustrated. I would join a new server, dedicate time building and progressing in the game, and then the server would reset, removing all of my progress. The Skyblock servers would resort to a server-wide reset because of uncontrollable inflation: players would obtain too much money, overwhelming the money supply and disincentivizing new players from joining the server. Investigating Skyblock server infrastructure, it becomes clear why Minecraft servers all resort to server resets so frequently.

Many Skyblock servers suffer from the same root issue, compounded over time: they do not have a central bank or any equivalent to regulate the money supply across the floating islands. Each player receives a base amount of virtual money when joining the server, let’s say, $1,000. Therefore, with each additional unique login to the server, $1,000 is added to the money supply. 

Further, there is a secondary area where money is added into circulation: the mainland market area. Unlike on player islands, where players can set up individual shops, buying and selling goods through the exchange of money without altering the server’s money supply, in the mainland area, players can purchase goods from non-player characters, or NPCs. The NPCs exist solely as traders, for example, offering five apples for $10, and they can trade in perpetuity. The issue that arises here is that players can also sell their goods to NPCs, ultimately creating an indefinite source of virtual money that can be added into circulation as NPCs can hypothetically purchase an infinite number of items from the player.

         Over time, the lack of monetary policy and regulations impacts Skyblock servers. As players continue to gather resources and obtain items of increasing value, they are able to sell goods to NPCs and other players and profit. On an individual level, this is great: a player can afford better building materials, more durable armor, and more late-stage game perks. On a server-wide level, the effects can be catastrophic: Skyblock servers regularly experience nearly catastrophic levels of inflation.

         NPCs buy and sell only a fixed number of unique items, but the playerbase as a whole can sell anything. As the money supply skyrockets across the Minecraft server, players demand more unique goods from other players and pivot from buying and selling to NPCs. With price locked NPC trades and a limited selection of goods to offer, the playerbase’s quickly increasing product differentiation disincentivizes regular players from selling to NPCs. A player may still purchase base resources from an NPC—easily obtainable building blocks, food, starter tools—but the decrease in money supply that occurs from this exchange (money given to an NPC is no longer in circulation and essentially disappears from the server) is negligible given the scale at which player net worths increase over time. 

Further, net worth leaderboards are publicly available. Players can see who has the most money on the server, also learning what the average net worth is across the server, and how each player ranks among the total playerbase. By accessing this leaderboard, players have perfect information in terms of knowing how much money exists on the server, and therefore, how much they can charge. In response to the public knowledge, players hike up the prices within their island shops. The leaderboard removes the time lag between increased player wealth and increased prices. And so, the Skyblock server experiences inflation. From personal experience playing on various Skyblock servers, the same pattern repeats itself on a timeline of around three to four months.

Then, month four hits. For new players joining Skyblock servers, all goods aside from those offered by the NPCs on the mainland are wholly unaffordable. As stated previously, players often receive $1,000 in starting money, and at the same time, a substantial number of already-existing players on the server could each have well over $100 trillion. The wealth gap discourages new users from returning, as existing players operate with such a high excess of wealth that it is too late to catch up. The server offers little, if any, avenues to spend such large amounts of money, leaving players to accrue and hold onto money indefinitely. Further, there is an overwhelming abundance of opportunities to earn money other than by trade: finishing quests, opening loot crates, and participating in auctions, to name a few. Skyblock servers struggle to maintain cash flow in their virtual economy.

Minecraft multiplayer servers are operated by server owners and moderators, people who run and maintain the servers and who are not affiliated or employed by Microsoft, who owns Minecraft. The main priority of a server owner and moderators is to maintain a stable or increasing playerbase, and the excess of money supply on a server is detrimental to this goal. (Note: Minecraft servers profit from in-game purchases made by players to obtain additional perks and resources, which can also impact the server’s money supply, increasing it inorganically at the whim of player purchases. The practice of selling in-game items for real money is not technically allowed by Minecraft’s terms and agreements, under “servers and hosting,” but the practice still occurs regularly.)

In sum, a Minecraft Skyblock server is a ticking time bomb. I have never participated in a Minecraft server where the moderators have enacted any form of money supply regulation and so the same cycle of inflation repeats itself. Eventually, the servers announce a reset or restart date, where the slate is wiped clean. The server will be restarted, and all players will once again begin on a new island world with the same $1,000, all previously acquired items and money gone. Though a server reset can be a risky move—a player who has frequented a server for many months may not want to undergo the entire process again and may leave for another server—moderators view it as the only way to successfully halt inflation. They remove the excess money supply while also removing all of the work and effort players have put into their islands.

In the real world, there are many techniques that can be employed to stymy inflation. Broadly speaking, in the United States, the Federal Reserve can increase interest rates, which can drive down inflation by making it more expensive to borrow money. Minecraft Skyblock servers, however, have no need for interest rates, as there is nothing on the server that players need to take a loan out to purchase. 

Additionally, Skyblock servers also do not have a banking system. There may be a building on the mainland called a “bank,” where players can leave their money in an account. (Note: Skyblock servers often assign a monetary penalty for virtually dying, such as falling off of one’s island and into the void. Upon respawning, a player may lose either a fixed amount, $2,000, or a percentage of their net worth, 10%. The penalty incentivizes players to not hold their money on their physical character and instead store it elsewhere.) A Skyblock “bank” is equivalent to putting money under the mattress. Players do not receive interest for storing their money here, nor will the “bank” loan a player’s money out to others to profit. These “banks” are mere facsimiles of their real world counterparts and only look like banks; they do not operate as such.

Minecraft Skyblock servers are only playing at reality. Though they feature virtual recreations of real world infrastructure – banks, marketplaces, independently-run shops – they lack fully operational functionality. NPC stores have an infinite supply of goods, price-locked. Banks exist in name only. Skyblock players profit exponentially over time from the achievement progression system in place and new players to the server generate an indefinite flow of money into the server. But in response, moderators appear to have few tools at their disposal to alter the inevitable price inflation, namely, server resets.

Should Minecraft servers be more reflective of the real world? Should moderators create a virtual Federal Reserve to sustain the money supply? Not necessarily. Though players can buy and sell from each other, they do so as an individual and not as a business. There does not appear to be any demand from players to join Minecraft servers and create businesses. Ultimately, no one wants to create a Minecraft Federal Reserve or figure out how to add a system of interest rates and loans into their Skyblock server. Minecraft is a fictional reality where players can build skyscrapers over a void and fly around wearing diamond armor. And yet, the servers still suffer from the same unpredictable inflation concerns seen in reality. Minecraft Skyblock can be viewed as an interesting example of what happens when the absence of businesses, banks, and monetary regulation coexist. Skyblock servers can always reset; the real world cannot.

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