The question now is how exactly do credits keep their value?
Not very well. a player can actually pull credits out of CPUs that didn't " blow up quite enough " after a battle.
That would increase the value of credits not decrease
The question now is how exactly do credits keep their value?
Not very well. a player can actually pull credits out of CPUs that didn't " blow up quite enough " after a battle.
Yeah, I dint understand how an entirely virtual currency works. What's it backed up by?
No currency is ever "backed" by anything. What is gold backed by? Gold? Gold is as much a physical object as a dollar is and has no more worth as a function for facilitating transactions.
Its better to think of currency as debt. Not debt as you normally think of it as in "oh god i am in debt" but a debt that society owes the currency holder. When you have a dollar you're owed a dollar of stuff which you can trade for whenever you want it. This works because its much easier to accept debt than to barter. National currencies hold their value because (in order of importance)
A) The manager of the currency manages the supply of the currency in such a way as to generate stable prices.
B) People continue to be able to trade for goods with that currency.
C) Governments only accept that currency as payment for taxes.
Virtual currencies are just records of this debt in a computer rather than on paper. Bitcoin isn't fundamentally any different than USD except in that there is no manager of the supply of the currency in such a way as to generate stable prices and so its a bad currency.
As a result its not really too difficult to understand how a currency like "credits" could be managed. Even nations that are hostile to the US will trade in USD because the supply is managed well and because their trading partners will use it. So any of the large nation states(or an unnamed independent body... or an AI) could manage the credit supply. And individual credits can be physical objects or records in a bank just like individual dollars can be records on a computer or physical bills today.
But what about all the lost currency from pirates/bad guys blowing up? Well inflation targeting doesn't rely on knowing the exact amount of currency in circulation. So losing or gaining currency can be handled as it comes up.
*OK there are lots of other differences but they're not really worth going into and are kinda technical
