Wait, what? This has nothing to do with frigate pew pew!
Well no, it doesn't, but it's important. Being aware of how money works is a very large part of being successful in New Eden, and for that you have to understand where ISK comes from, what ISK does, and where ISK goes.
Not only does knowing about ISK flow enable you to understand some of why the universe works the way it does, but it also enables you to win arguments and look smart! Handy!
First things first, what is money?
Imagine that, instead of your wallet you have a big bucket, and instead of being solid (or virtual), money is simply Mountain Dew*. Every pilot is just walking around with these big buckets with varying degrees of Mountain Dew in them. This Dew does not inherently have any value to anyone, because it's toxic to drink and has no other useful purpose. It just so happens that by social convention, people have agreed to use it as a representative of value.
Owning lots of this Dew is very useful, because when you want someone to give you something, they almost always ask you to pour some of the Dew from your bucket into their bucket. This pouring is perfect, and not a single drop is ever lost. The total amount of Dew that people have stays the same; it's just who has more Dew that changes. This is called "the economy".
Do you see how simple this is? There is no way to get more Dew except from another person, and there's no way to lose Dew except giving it to another person.
This is boring, though. Why can't you just make or get more Dew? Well... it turns out you can.
|It comes out of nowhere!|
That's an ISK faucet! Whenever the total Dew flowing around the economy (the total amount in all buckets) increases, the source or mechanic by which this new Dew is introduced is called a "faucet".
So you continue merrily stomping on rats, with the CONCORD agent in tow, periodically dumping globs of Dew into your bucket. But then... you run into a rat you cannot defeat, and you get blown up! That's totally going to cost you Dew! Darn! The agent looks at you with pity in her eyes... and squirts some more Dew into your bucket. What gives? Insurance!
That's right, insurance is another ISK faucet! There are tons of other non-capsuleers standing about with big Dew hoses, just waiting to reward you for doing something for them.
But then... there are also some standing next to some ominous looking grates. Who are they?
|Glistening sticky caked Dew coats it.|
One particularly sleazy-looking character wearing a State War Academy emblem notices you lost your ship and saunters up to you, offering to sell you a blueprint to build as many more ships of that kind as you like. You take him up on the offer, but as you habitually get ready to pour some Dew into his bucket, you notice he has none. He notices your confusion, and explains "Just pour it down... you know... my grate," then gives you a slow wink.
You've found an ISK sink! Buying blueprint originals (BPOs) from the market in an academy station does not put your Dew in another pilot's bucket. You're just dumping it down the drain!
The next day, you have a new ship and are just finishing up a mission for an agent of the Caldari Navy. She walks up and pours some fresh moist Dew goop into your bucket, but then also hands you what look like movie tickets branded with the Navy's emblem. She explains: "We call these 'Loyalty Points'. You can use them with our rewards program down the street to get some shiny loot." Everyone loves scrip, right?
So you head over and after some deliberation you decide to buy an implant with your scrip. The clerk shakes his head and points to a grate in the corner of the room. "You gotta grease the wheels to use your LP, rookie."
Yup, cashing in your LP is another ISK sink! With some missions this is offset by the hose-Dew, but certain things, like Factional Warfare complexes, only pay in LP, so they are pretty clearly ISK sinks. If you give Dew to anyone without a bucket, you're just pouring it down the drain, and that's an ISK sink.
And so it flows...
That's pretty much it on how Mountain Dew (in the real world, ISK) enters and leaves the economy of peoples' buckets. Nobody knows where the grates go or where the hoses are coming from, but if they're connected it might have something to do with the Dew being so toxic.
Misconceptions (or: GRR, GOONS!)
|Grr, those goons and their ISK faucet moon mining. Grr.|
There are some common misconceptions on what is and is not an ISK faucet/sink. Here's a sampling of them:
- Moon mining is not an ISK faucet! Neither is it an ISK sink! Those who do moon mining are simply picking up shiny stuff off the ground, and give that shiny stuff to other pilots, who in exchange pour some sugary Dew over. No hoses or grates are involved.
- Losing ships to combat is not an ISK sink! It's just your ship that explodes. The Dew in your bucket doesn't go anywhere. In fact, you get a bunch more from insurance, so losing ships is actually an ISK faucet.
- Trading in PLEX is neither an ISK sink nor an ISK faucet! The only thing that spontaneously appears out of a "faucet" is the PLEX itself. The only Dew loss in the economy is the market tax (which does go down the drain).
- Most/all extremely good sources of income are not ISK faucets! They just are not. The "ISK faucet" term is completely mis-applied in this case to mean "profitable", when it means something completely different. Many of these sources of income are in fact ISK sinks.
So there you go! You are now perfectly equipped to be a mildly educated armchair economist on the Eve Forums, and perfectly qualified to recognize when someone has no idea what they're talking about because they mislabel an ISK sink or faucet.
* I was going to use Quafe as the example liquid, but Quafe Company threatened legal action so I had to switch to a fictional product.