yeah CS skins is one of the biggest markets of digital-only-aesthetic-items before NFT came around (and now probably still bigger than NFTs). The main thing with NFTs was that there's no "central database", CS skins solely lives in Valve's database.

making a butterfly knife for Valve isn't hard (in the past Steam Customer Service duplicated items lost in scams). It's hard for the players because they have to "gamble" for it through paying keys to open cases.

It's hard as in "it's hard to trick or manipulate the centralized database".

Similarly making USD in a bank account isn't technically hard, but it's fucking hard to get a bank to tweak some numbers in your favour.

it's not a fake supply

CSGO knifes actually currency run by shadow banks providing RMB <-> USD convertion.

Google for "挂刀"

This should be a top level comment, it is the "ah hah" that suddenly makes everything clear.

Can you explain the shadow banking / conversion angle? All I found was that selling knives was used to get a discount on steam balance thanks to price arbitrage.

> "Selling Knives" (挂刀) refers to the technique of buying in-game items from 3rd-party (Chinese) trading sites like NetEase BUFF, C5, IGXE, and UUYP, and then selling them on the Steam Market to obtain a discounted Steam Wallet balance by capitalizing on price differences.

I'm surprised the price difference did not disappear if people make that trade.

Source https://github.com/EricZhu-42/SteamTradingSiteTracker/wiki

China notoriously has intense capital controls. It's difficult for ordinary Chinese citizens to take capital out of the country. CS2 items can be bought and sold in both USD and RMB, and can be transferred between Chinese and international accounts. It's not about Steam wallet balances.

Interesting. I'm curious though, assuming I am Chinese and I trade knives for USD - where would I be able to receive USD to evade capital control? Surely not my bank account or Steam wallet. Or is it for people with bank account in both countries? But in that case crypto could be more convenient? I'm puzzled

Yes you would need to receive in a foreign USD bank account outside of China, the whole goal is to get the capital out of China and into a foreign account. Cryptocurrency transactions/exchanges are illegal in China so that's definitely not convenient! Meanwhile you can buy CS2 items with any ordinary payment method.

Both US and CN have a massive player base, they all need to buy games in their own currency

You can buy games with Steam Wallet

You can also buy/sell in-game items with Steam Wallet

Now only if someone invents a commodity with a stable price. Hmm what could that be?

Remember the 15% transaction fee on the Steam market? That's why the price difference hasn't disappeared. Players can avoid this fee through gifting and off-platform transactions. And all of this is just Chinese players trying to buy games cheaper—after all, what else can Steam wallet funds be used for? Some comments claim this is a way for Chinese people to evade financial regulations, but that's complete nonsense. The Steam market's capacity is entirely insufficient to meet the demand. They could easily choose to legally exchange currency using the foreign exchange quotas of relatives and friends, engage in cross-border wash trading through underground banks, or use fake trade and fake investment schemes.

Artificial scarcity has existed for ages. Watches, playing cards, cars, etc.

Selling 10 of something for $1000 instead of 1000 of something for $10 is not new.

Also builds brand value.

I feel watches and cars are different. You cant magically "print" 10000000 Bentley's so supply will be constrained and they are expensive to make. I feel the luxury is more tangible than just being rare.

See the discussion around the supposedly lost Van Gogh painting, eg at https://news.artnet.com/art-world/van-gogh-lmi-group-2602847

Nothing about the painting itself would have changed, but its market value depends very much on whether Van Gogh painted it.

A lot of real economies are based on fake constraints. Or the constraint is a closely held secret that's pretty arbitrary and not based on any grand amount of skill or effort.

All this froth on the ocean surface is only possible in an economy where household net worth has been inflated to 150 Trillion.

Yeah the measly peasants should have never gotten their hands on such luxuries as game knives skins.

It is NFT. But because it's Valve its actually good. Because of reasons.