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            <title><![CDATA[A Quick Dive into the Gaming Ecosystem of Starknet]]></title>
            <link>https://paragraph.com/@cffb/a-quick-dive-into-the-gaming-ecosystem-of-starknet</link>
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            <pubDate>Sat, 13 May 2023 07:29:49 GMT</pubDate>
            <description><![CDATA[Blockchain gaming is the most popular craze within the crypto space. It is attractive for users as it offers new opportunities that traditional gaming does not. Playing games on the Ethereum network is not viable due to high gas fees. This is the reason; L2 networks have become the favourite platforms for gaming DAPPs. These networks can keep up with user demand while accommodating various transaction requests. They also help the games to scale while leveraging the strength of Ethereum’s secu...]]></description>
            <content:encoded><![CDATA[<p>Blockchain gaming is the most popular craze within the crypto space. It is attractive for users as it offers new opportunities that traditional gaming does not. Playing games on the Ethereum network is not viable due to high gas fees. This is the reason; L2 networks have become the favourite platforms for gaming DAPPs. These networks can keep up with user demand while accommodating various transaction requests. They also help the games to scale while leveraging the strength of Ethereum’s security. The high throughput and low transaction fee of <a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://www.starknet.io/en">Starknet</a> make it ideal for many use cases and gaming is one of them.</p><p><strong>But why is Starknet for gaming when other L2s are available?</strong> State Channel (Ex- Celer Network) allows two or more parties to conduct multiple transactions off-chain, without the need for each transaction to be broadcast to the entire network but the adoption curve is very poor. Plasma (Ex – Polygon) allows specific assets to be transferred between the Ethereum mainnet and the sidechin but the mainchain does not secure such a sidechain. Optimistic Rollups (Ex - Arbitrum and Optimism) are adaptive but the withdrawal of funds takes up to 7 days. zkRollups (Ex - zkSync) generalizes computation with zero-knowledge and provides instant withdrawal while being quite fast and secure but the use case is limited to DEXs.</p><p>Starknet powered by Validium technology is more promising as it is a <strong>hybrid of State Channel, Plasma &amp; zkRollup</strong>. It is fast, secure and provides a better user experience. The usage of ‘zero-knowledge’ eliminates the chances of cheating by bad actors and makes the protocol highly decentralized. It is also engineered for scalability, ensuring that it can accommodate exponential growth without sacrificing security and decentralization. STARKS rely on minimal, time-tested cryptographic assumptions, provides quantum security and eliminates the need for a trusted setup. The potential of trustless Web3 gaming can be captured with ease on Starknet.</p><p><a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://medium.com/@hackintoshrao/what-is-cairo-programming-language-and-starknet-a-primer-on-l2-blockchains-410203c21669">Cairo</a>, the programming language for blockchain developers to build applications on the StarkNet, is the first Turing-complete language for creating provable programs for general computation. It is optimal for harnessing the benefits of algebraic proof systems and ensuring efficient computation and verification processes. The best thing about Starknet is that it is designed to be future-proof. This Starknet<a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://medium.com/starkware/starknet-goals-and-roadmap-for-2023-fe7b89eead3b"> roadmap of 2023</a> describes how the upcoming Starknet v0.12.0 will incorporate significant improvements in throughput and latency and in v0.13.0, the transaction costs will be reduced dramatically. All these will be beneficial for gaming DAPPs.</p><p>Ethereum’s <a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://www.eip4844.com/">EIP-4844</a> (Shard Blob Transaction) is expected in Q4 of 2023. Starknet will get tremendous benefits from it as soon as possible, in addition to the introduction of <a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://starkware.medium.com/volition-and-the-emerging-data-availability-spectrum-87e8bfa09bb">Volition</a> (off-chain data availability). There will be a dramatic reduction in the cost of data. Volition will allow developers to build Starknet applications with a hybrid Data Availability (DA) mode: both on-chain and off-chain data. In Starknet <a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://medium.com/starkware/starknet-goals-and-roadmap-for-2023-fe7b89eead3b">v0.15.0</a>, proof will attest to the integrity of one or more Starknet blocks. This will fix the block interval, and improve Starknet’s UX. Gaming is a computation-heavy exercise and the users expect a good experience. The Web2 gaming DAPPs just need to get their blockchain moments to be onboarded into Web3 and only Starknet can help them to shine.</p><p><strong>Let’s talk more about Starknet’s UX.</strong> Starknet allows users to pre-approve a DAPP’s transactions based on parameters like duration, maximum amount of gas, maximum transaction volume of a certain token, or a particular function on a particular contract. Generally, the on-chain games require users to sign multiple transactions to interact with different smart contracts and this hampers the game experience. With wallet like Argent or Braavos, you can generate a session key that is held in the browser’s local storage and it authorizes the DAPP to sign transactions for a limited time. This improves the gaming experience astonishingly. There is no wonder that the gaming ecosystem is finding great traction on Starknet. Let’s explore the prominent gaming DAPPs on Starknet.</p><p><strong>GoL2:</strong> Game of Life of<a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://www.gol2.io/"> GoL2</a> is an experiment in L2 gaming. The project was founded in February 2022 and it became live on Starknet mainnet in September 2022. The game is a reworking of the classic<a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://en.wikipedia.org/wiki/Conway%27s_Game_of_Life"> Game of Life</a> by John Conway. The main rules of the game are: the normal rules of Conways’ Game of Life (3 to revive, 2 or 3 to stay alive) and the boundaries wrap — a glider may travel infinitely within the confines of the grid. Two game modes are there in GoL2 — Infinite and Creator modes. GoL2 is a play-to-earn game where you earn $GOL while you play the game.</p><p><strong>The Ninth:</strong><a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://ninth.gg/"> The Ninth</a> is an upcoming player-made and revolutionary real-time evolving game powered by Starknet. It is a fully on-chain metaverse and the team is focusing on building PVP arena games for players to compete using NFT equipment that they forge from staking. Nine arena games will be there and the players will be able to buy lands. Players can run private or open games there and act as hosts while socializing with their peers.</p><p><strong>Realms:</strong><a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://www.realmseternum.com/"> Realms</a> is an upcoming massively multiplayer on-chain game of Economics and Chivalry from<a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://bibliothecadao.xyz/"> Bibliotheca DAO</a>. The game was born out of the Loot phenomenon and can flawlessly incorporate all Loot assets. There are multiple games in the Realms universe and those are connected by a shared economy, resources, and game assets. ‘Realms: Eternum’ will be the first title launched in Realms Autonomous World. You can own zero-knowledge-proofed land in the game and be rewarded in $LORDS, the token of the Realmverse.</p><p><strong>Briq:</strong><a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://briq.construction/"> Briq</a> is an NFT building protocol and it is live on Starknet mainnet. Briqs are basically building blocks and you can assemble them to create an NFT and disassemble them to get your briqs back. The created NFTs are called sets. You can transfer, lend or break them to have fun. Sets are interoperable NFTs, so they can be integrated with any metaverse. Briq 2.0.5 has been launched recently and you can import any image and turn it into briq set.</p><p><strong>Influence:</strong><a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://www.influenceth.io/"> Influence</a> is a grand space strategy MMO with a player-owned open economy. You can acquire and colonize your own asteroid in this Starknet-powered game. It serves as your home base. The mining resources give you access to build manufacturing plants, ships, launch systems and many more. If you do not want to buy an asteroid, you can lease land from an owner and play. Your owned land and the resources are NFTs here and easily transferable. You can also discover new technologies and engage in combat.</p><p><strong>Age of Eykar:</strong><a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://eykar.org/"> Age of Eyker</a> is a decentralized strategy game and it is live on Starknet mainnet. Eykar is a fantasy universe. An open-source smart contract dictates the rules of this world - how fast time passes, how you can move, how you can form an army, and so on. To register your address in the game, you need to buy your first land and choose your fraction. After that, you can start recruiting people and conquering territories. Other kingdoms either become your allies or enemies.</p><p><strong>Dope Wars:</strong><a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://dopewars.gg/"> Dope Wars</a> is a fully decentralized, community-driven, gaming metaverse project inspired by hip-hop culture. The team is bootstrapping a modern-day GTA-inspired metaverse and series of games built by their decentralized game studio. The game is inspired by the<a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://www.youtube.com/watch?v=3rg7rOfcdo8"> Drugwars game</a> which is considered a classic. It is based on the DOPE NFT and $PAPER, the ecosystem currency. The open environment of Dope Wars allows developers and contributors to produce their own limitless games for the Dope Wars NFT holders. To get in the game, you need a Hustler. Hustlers are configurable NFT characters that can equip and unequip NFT Gear. All NFTs are tradeable in the market.</p><p>The web3 gaming landscape on Starknet is worth exploring. The network has made significant strides to attract game developers and gamers. The growth of the gaming ecosystem is a positive sign for Starknet but the next challenge will be to match up the web2 experience. Keep track of the mentioned games and look out for more exciting gaming projects on Starknet.</p><p>Follow Starknet <a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://twitter.com/Starknet">Twitter</a>. If you are a developer and want to develop gaming DAPP on Starknet, join their <a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://discord.gg/qypnmzkhbc">Discord</a>. Our preferred Starknet wallet is <a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://braavos.app/">Braavos</a>. You can join Braavos Zealy <a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://zealy.io/c/braavos/invite/5khDxD63OpNp6IPJMppSX">Quest Board</a> to explore the Starknet ecosystem and earn potential rewards.</p>]]></content:encoded>
            <author>cffb@newsletter.paragraph.com (cffb)</author>
        </item>
        <item>
            <title><![CDATA[ZETA测试网免费领取ZETA链上AsetPay Entry Pass卡，获得测试角色。]]></title>
            <link>https://paragraph.com/@cffb/zeta-zeta-asetpay-entry-pass</link>
            <guid>6SYk19dhNp3vRBxXdWA9</guid>
            <pubDate>Fri, 28 Apr 2023 08:47:22 GMT</pubDate>
            <description><![CDATA[还记得zeta呢吗？卷出天际的项目，最近的节奏应该是离主网不远了。 最近的Gas这么高，可以做测试网交互或者任务平台，比如zeta，golden或zkSync的crew31.首先加入ZetaChain的Discord： https://discord.gg/zetachain 进去以后生成新的邀请链接自己邀请自己 2.找到zeta-faucet频道并在zeta-faucet频道输入：zeta drip faucet 自己的钱包地址 zetachain。进行领取如果出现这样的消息就是水龙头维修，我们稍等一会再次尝试领取3.完成以上步骤后现在进入网站，连接钱包 https://asetpay.org/zetachain.html#4.点击连接钱包会自动跳出ZetaChain Athens 2 TestNet网络，我们点击批准，并且切换网络即可5.添加网络之后我们点击Mint，Mint完记得截图保存一下。6.我们再加入ASETPay的Discord：加入Discord后生成新的链接邀请后面的号（每十个号换一次链接），在testnet-pass频道里发送截图和钱包地址，会获得Testne...]]></description>
            <content:encoded><![CDATA[<p>还记得zeta呢吗？卷出天际的项目，最近的节奏应该是离主网不远了。 最近的Gas这么高，可以做测试网交互或者任务平台，比如zeta，golden或zkSync的crew3</p><figure float="none" data-type="figure" class="img-center" style="max-width: null;"><img src="https://storage.googleapis.com/papyrus_images/4b5b2cccf705802f1c8823a53e7367a584835f5aa642c805c53919fe55856655.png" alt="" blurdataurl="data:image/gif;base64,R0lGODlhAQABAIAAAP///wAAACwAAAAAAQABAAACAkQBADs=" nextheight="600" nextwidth="800" class="image-node embed"><figcaption HTMLAttributes="[object Object]" class="hide-figcaption"></figcaption></figure><p>1.首先加入ZetaChain的Discord：</p><p><a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://discord.gg/zetachain">https://discord.gg/zetachain</a></p><p>进去以后生成新的邀请链接自己邀请自己</p><p>2.找到zeta-faucet频道并在zeta-faucet频道输入：zeta drip faucet 自己的钱包地址 zetachain。进行领取</p><figure float="none" data-type="figure" class="img-center" style="max-width: null;"><img src="https://storage.googleapis.com/papyrus_images/25b2e030cf3e4ec1f0ad63606d6a3f1bed024d5e3fe1fefe7eeb90f0699803df.png" alt="" blurdataurl="data:image/gif;base64,R0lGODlhAQABAIAAAP///wAAACwAAAAAAQABAAACAkQBADs=" nextheight="600" nextwidth="800" class="image-node embed"><figcaption HTMLAttributes="[object Object]" class="hide-figcaption"></figcaption></figure><p>如果出现这样的消息就是水龙头维修，我们稍等一会再次尝试领取</p><figure float="none" data-type="figure" class="img-center" style="max-width: null;"><img src="https://storage.googleapis.com/papyrus_images/2387df66f19d601ff2c06e14631af301fe5849a8ac424232ee34c5df03996087.png" alt="" blurdataurl="data:image/gif;base64,R0lGODlhAQABAIAAAP///wAAACwAAAAAAQABAAACAkQBADs=" nextheight="600" nextwidth="800" class="image-node embed"><figcaption HTMLAttributes="[object Object]" class="hide-figcaption"></figcaption></figure><p>3.完成以上步骤后现在进入网站，连接钱包</p><p><a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://asetpay.org/zetachain.html#">https://asetpay.org/zetachain.html#</a></p><figure float="none" data-type="figure" class="img-center" style="max-width: null;"><img src="https://storage.googleapis.com/papyrus_images/ebe55116e5e86585bf3c860679eac17ca576e3d2c91d2418fcbf7be8eb81145e.png" alt="" blurdataurl="data:image/gif;base64,R0lGODlhAQABAIAAAP///wAAACwAAAAAAQABAAACAkQBADs=" nextheight="600" nextwidth="800" class="image-node embed"><figcaption HTMLAttributes="[object Object]" class="hide-figcaption"></figcaption></figure><p>4.点击连接钱包会自动跳出ZetaChain Athens 2 TestNet网络，我们点击批准，并且切换网络即可</p><figure float="none" data-type="figure" class="img-center" style="max-width: null;"><img src="https://storage.googleapis.com/papyrus_images/037055336821027f31abe82c37ebaf68f281cd18ea4ffb961acdeec4f781bc26.png" alt="" blurdataurl="data:image/gif;base64,R0lGODlhAQABAIAAAP///wAAACwAAAAAAQABAAACAkQBADs=" nextheight="600" nextwidth="800" class="image-node embed"><figcaption HTMLAttributes="[object Object]" class="hide-figcaption"></figcaption></figure><p>5.添加网络之后我们点击Mint，Mint完记得截图保存一下。</p><figure float="none" data-type="figure" class="img-center" style="max-width: null;"><img src="https://storage.googleapis.com/papyrus_images/e7bf45dddd26ffa97631c21ebf26f26a21cf42ebe4d57543494c2737feb236bd.png" alt="" blurdataurl="data:image/gif;base64,R0lGODlhAQABAIAAAP///wAAACwAAAAAAQABAAACAkQBADs=" nextheight="600" nextwidth="800" class="image-node embed"><figcaption HTMLAttributes="[object Object]" class="hide-figcaption"></figcaption></figure><figure float="none" data-type="figure" class="img-center" style="max-width: null;"><img src="https://storage.googleapis.com/papyrus_images/f26ad28f6bd818b4135cd4c75f4452885c8d2e472e30129608008fe2f712f593.png" alt="" blurdataurl="data:image/gif;base64,R0lGODlhAQABAIAAAP///wAAACwAAAAAAQABAAACAkQBADs=" nextheight="600" nextwidth="800" class="image-node embed"><figcaption HTMLAttributes="[object Object]" class="hide-figcaption"></figcaption></figure><p>6.我们再加入ASETPay的Discord：加入Discord后生成新的链接邀请后面的号（每十个号换一次链接），在testnet-pass频道里发送截图和钱包地址，会获得Testnet-Pass角色。</p><p><a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://discord.gg/kwx6J7UR">https://discord.gg/kwx6J7UR</a></p><figure float="none" data-type="figure" class="img-center" style="max-width: null;"><img src="https://storage.googleapis.com/papyrus_images/c8ca075dcea1e20b116825bb487af1c55ba785dc03d237d20a958065981bf7db.png" alt="" blurdataurl="data:image/gif;base64,R0lGODlhAQABAIAAAP///wAAACwAAAAAAQABAAACAkQBADs=" nextheight="600" nextwidth="800" class="image-node embed"><figcaption HTMLAttributes="[object Object]" class="hide-figcaption"></figcaption></figure>]]></content:encoded>
            <author>cffb@newsletter.paragraph.com (cffb)</author>
        </item>
        <item>
            <title><![CDATA[Absolute Advantage: Definition, Benefits, and Example]]></title>
            <link>https://paragraph.com/@cffb/absolute-advantage-definition-benefits-and-example</link>
            <guid>ybWLcUFTDqYoW6ENAxPM</guid>
            <pubDate>Sun, 01 Jan 2023 07:20:50 GMT</pubDate>
            <description><![CDATA[What Is Absolute Advantage?Absolute advantage is the ability of an individual, company, region, or country to produce a greater quantity of a good or service with the same quantity of inputs per unit of time, or to produce the same quantity of a good or service per unit of time using a lesser quantity of inputs, than its competitors.Understanding Absolute AdvantageThe concept of absolute advantage was developed by 18th-century economist Adam Smith in his book The Wealth of Nations to show how...]]></description>
            <content:encoded><![CDATA[<h2 id="h-what-is-absolute-advantage" class="text-3xl font-header !mt-8 !mb-4 first:!mt-0 first:!mb-0">What Is Absolute Advantage?</h2><p>Absolute advantage is the ability of an individual, company, region, or country to produce a greater quantity of a good or service with the same quantity of inputs per unit of time, or to produce the same quantity of a good or service per unit of time using a lesser quantity of inputs, than its competitors.</p><h2 id="h-understanding-absolute-advantage" class="text-3xl font-header !mt-8 !mb-4 first:!mt-0 first:!mb-0">Understanding Absolute Advantage</h2><p>The concept of absolute advantage was developed by 18th-century economist <a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://www.investopedia.com/updates/adam-smith-economics/">Adam Smith</a> in his book <a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://www.investopedia.com/updates/adam-smith-wealth-of-nations/"><em>The Wealth of Nations</em></a> to show how countries can gain from trade by specializing in producing and exporting the goods that they can produce more efficiently than other countries. Countries with an absolute advantage can decide to specialize in producing and selling a specific good or service and use the generated funds to purchase goods and services from other countries.</p><p>Smith argued that specializing in the products that they each have an absolute advantage in and then trading the products can make all countries better off, as long as they each have at least one product for which they hold an absolute advantage over other nations.</p><p>Absolute advantage explains why it makes sense for individuals, businesses, and countries to <a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://www.investopedia.com/terms/t/trade.asp">trade</a> with each other. Since each has advantages in producing certain goods and services, both entities can benefit from the exchange.</p><p>This mutual gain from trade forms the basis of Smith’s argument that <a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://www.investopedia.com/terms/s/specialization.asp">specialization</a>, the division of labor, and subsequent trade lead to an overall increase in prosperity from which all can benefit. This, Smith believed, was the root source of the eponymous &quot;Wealth of Nations.&quot;1</p><h2 id="h-absolute-advantage-vs-comparative-advantage" class="text-3xl font-header !mt-8 !mb-4 first:!mt-0 first:!mb-0">Absolute Advantage vs. Comparative Advantage</h2><p>Absolute advantage can be contrasted with <a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://www.investopedia.com/terms/c/comparativeadvantage.asp">comparative advantage</a>, which is when a producer has a lower <a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://www.investopedia.com/terms/o/opportunitycost.asp">opportunity cost</a> to produce a good or service than another producer. An opportunity cost is the potential benefits an individual, investor, or business misses out on when choosing one alternative over another.</p><p>Absolute advantage leads to unambiguous gains from specialization and trade only in cases where each producer has an absolute advantage in producing some good. If a producer lacks any absolute advantage, then Adam Smith’s argument would not necessarily apply.</p><p>However, the producer and its trading partners might still be able to realize gains from trade if they can specialize based on their respective comparative advantages instead. In his book <em>On the Principles of Political Economy and Taxation,</em> <a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://www.investopedia.com/terms/d/david-ricardo.asp">David Ricardo</a> argued that even if a country has an absolute advantage over trading many kinds of goods, it can still benefit by trading with other countries if that have different comparative advantages.</p><h2 id="h-assumptions-of-the-theory-of-absolute-advantage" class="text-3xl font-header !mt-8 !mb-4 first:!mt-0 first:!mb-0">Assumptions of the Theory of Absolute Advantage</h2><p>Both Smith&apos;s theory of absolute advantage, and Ricardo&apos;s theory of comparative advantage, rely on certain assumptions and simplifications in order to explain the benefits of trade. Both theories assume that there are no barriers to trade: they do not account for any costs of shipping or additional tariffs that a country might raise on another&apos;s imported goods.</p><p>Another is that the factors of production are immobile: In these models, workers and businesses do not relocate in search of better opportunities. This assumption was realistic in the 1700s, but <a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://www.investopedia.com/terms/g/globalization.asp">globalization</a> has now made it easy for companies to move their factories abroad.</p><p>More crucially, these theories both assume that a country&apos;s absolute advantage is constant, and scales equally. In other words, it assumes that producing a small number of goods has the same per-unit cost as a larger number and that countries are unable to change their absolute advantages. In reality, countries often make strategic investments to create greater advantages in certain industries.</p><h2 id="h-pros-and-cons-of-absolute-advantage" class="text-3xl font-header !mt-8 !mb-4 first:!mt-0 first:!mb-0">Pros and Cons of Absolute Advantage</h2><p>One advantage of the theory of absolute advantage is its simplicity: The theory provides an elegant explanation of the benefits of trade, showing how countries can benefit by focusing on their absolute advantages.</p><p>However, the theory of comparative advantage does not fully explain why nations benefit from trade. This explanation would later fall to Ricardo&apos;s theory of comparative advantage: Even if one country has an absolute advantage in <em>both</em> types of goods, it will still be better off through trade. In other words, if one country can produce all goods more cheaply than its trading partners, it will still benefit by trading with other countries.</p><p>Also, as explained earlier, the theory also assumes that absolute advantages are static—a country cannot change its absolute advantages, and they do not become more efficient with scale. Actual experience has shown this to be untrue: Many countries have successfully created an absolute advantage by investing in strategic industries.</p><p>In fact, the theory has been used to justify exploitative economic policies in the postcolonial era. Reasoning that all countries should focus on their advantages, major bodies like the World Bank and IMF have often pressured developing countries to focus on agricultural exports, rather than industrialization. As a result, many of these countries remain at a low level of economic development.</p>]]></content:encoded>
            <author>cffb@newsletter.paragraph.com (cffb)</author>
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        <item>
            <title><![CDATA[Command Economy]]></title>
            <link>https://paragraph.com/@cffb/command-economy</link>
            <guid>9SvXynvjdo5GknsiJztG</guid>
            <pubDate>Wed, 08 Jun 2022 02:33:37 GMT</pubDate>
            <description><![CDATA[What Is a Command Economy?A command economy is a key aspect of a political system in which a central governmental authority dictates the levels of production that are permissible and the prices that may be charged for goods and services. Most industries are publicly owned. The main alternative to a command economy is a free market system in which demand dictates production and prices. The command economy is a component of a communist political system, while a free market system exists in capi...]]></description>
            <content:encoded><![CDATA[<h2 id="h-what-is-a-command-economy" class="text-3xl font-header !mt-8 !mb-4 first:!mt-0 first:!mb-0">What Is a Command Economy?</h2><p>A command economy is a key aspect of a political system in which a central governmental authority dictates the levels of production that are permissible and the prices that may be charged for goods and services. Most industries are publicly owned.</p><p>The main alternative to a command economy is a free market system in which demand dictates production and prices.</p><p>The command economy is a component of a <a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://www.investopedia.com/terms/c/communism.asp">communist</a> political system, while a free market system exists in capitalist societies.</p><h3 id="h-key-takeaways" class="text-2xl font-header !mt-6 !mb-4 first:!mt-0 first:!mb-0">KEY TAKEAWAYS</h3><ul><li><p>In a command economy, the central government dictates the level of production of goods and controls their distribution and prices.</p></li><li><p>Proponents of command economies argue government control rather than private enterprise can ensure the fair distribution of goods and services.</p></li><li><p>In a free market system, private enterprises set production and price levels based on demand.</p></li></ul><h2 id="h-understanding-command-economy" class="text-3xl font-header !mt-8 !mb-4 first:!mt-0 first:!mb-0">Understanding Command Economy</h2><p>Cuba, North Korea, and the former Soviet Union all have command economies. China maintained a command economy until 1978 when it began its transition to a mixed economy that blends communist and capitalist elements. Its current system has been described as a socialist market economy.1</p><p>The command economy, also known as a planned economy, requires that a nation&apos;s central government own and control the means of production.</p><p>Private ownership of land and capital is nonexistent or severely limited. Central planners set prices, control production levels, and limit or prohibit competition within the private sector. In a pure command economy, there is no private sector, as the central government owns or controls all business.</p><p>In a command economy, government officials set national economic priorities, including how and when to generate economic growth, how to allocate resources, and how to distribute the output. This often takes the form of a multi-year plan.</p><h3 id="h-arguments-against-command-economies" class="text-2xl font-header !mt-6 !mb-4 first:!mt-0 first:!mb-0">Arguments Against Command Economies</h3><p>Any capitalist would argue that command economies face at least two major problems: first is the incentive problem and second is an information vacuum among the central planners making all the decisions.</p><p><strong>The Incentive Problem</strong></p><p>The incentive problem starts at the top. Policymakers, even in a command economy, are all too human. Political interest groups and the power struggles between them will dominate policymaking in a command economy even more than in capitalist economies because they are not constrained by market-based forms of discipline such as <a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://www.investopedia.com/terms/s/sovereign-credit-rating.asp">sovereign credit ratings</a> or <a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://www.investopedia.com/terms/c/capitalflight.asp">capital flight</a>.</p><p>Wages are set centrally for workers, and profits are eliminated as an incentive for management. There is no apparent reason to produce excellence, improve efficiency, control costs, or contribute effort beyond the minimum required to avoid official sanction.</p><p>Getting ahead in a command economy requires pleasing the party bosses and having the right connections rather than maximizing shareholder value or meeting consumer demands. Corruption tends to be pervasive.</p><p>The incentive problem includes the issue known as the <a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://www.investopedia.com/terms/t/tragedy-of-the-commons.asp">tragedy of the commons</a> on a larger scale than is seen in capitalist societies. Resources that are commonly owned are effectively unowned. All of their users (or workers) lack any incentive to preserve them. Things such as housing developments, factories, and machinery wear out, break down, and fall apart rapidly in a command economy. </p><p> <strong>The Information Vacuum</strong></p><p>The problem of economic calculation in a command economy was first described by <a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://www.investopedia.com/articles/economics/09/austrian-school-of-economics.asp">Austrian economists</a> Ludwig von Mises and F. A. Hayek. Central planners must somehow calculate how much of every product and service should be produced and delivered.</p><p>In a free market system, this is determined in a decentralized manner through the interaction of <a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://www.investopedia.com/terms/l/law-of-supply-demand.asp">supply and demand</a>. Consumers shape demand by the products and services they buy or don&apos;t buy. Producers respond by creating more of the products and services that consumers demand.</p><p>Moreover, all of these factors are quantifiable. At every step of the supply chain, someone is keeping count of the number of avocados, pairs of blue jeans, and lug wrenches that are in demand out there.</p><p>In a command economy, central planners should, at least initially, have a grasp on the basic life-or-death needs of the population in terms of food, clothing, and shelter. But without the forces of supply and demand to guide them, they have no rational method to align the production and distribution of goods with consumer wants and preferences.</p><p>Over time, the incentive and economic calculation problems of a command economy mean that resources and capital goods are wasted, and the society is impoverished.</p><h2 id="h-arguments-in-favor-of-command-economies" class="text-3xl font-header !mt-8 !mb-4 first:!mt-0 first:!mb-0">Arguments in Favor of Command Economies</h2><p>Proponents of command economies argue that they allocate resources to maximize <a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://www.investopedia.com/terms/s/social-welfare-system.asp">social welfare</a>, unlike in free-market economies, where this goal is secondary to maximizing private profit.</p><p>Command economies may have better control of employment levels than free-market economies. They can create jobs to put people to work when necessary, even in the absence of a legitimate need.</p><p>Lastly, command economies are seen as better able to take decisive, coordinated action in the face of a national emergency or crisis such as a war or natural disaster. Although, even market-based societies may curtail property rights and greatly expand the emergency powers of their central governments during such events, at least temporarily.</p><h2 id="h-what-are-the-characteristics-of-a-command-economy" class="text-3xl font-header !mt-8 !mb-4 first:!mt-0 first:!mb-0">What Are the Characteristics of a Command Economy?</h2><p>Command economies are controlled from the top by government planners. In general, this includes:</p><ul><li><p>Public ownership of major industries.</p></li><li><p>Government control of production levels and distribution quotas.</p></li><li><p>Government control of prices and salaries.</p></li></ul><p>Monopolies are common in command economies as they are considered necessary to meet the goals of the national economy.</p><h2 id="h-how-does-a-command-economy-differ-from-a-free-market-economy" class="text-3xl font-header !mt-8 !mb-4 first:!mt-0 first:!mb-0">How Does a Command Economy Differ from a Free-Market Economy?</h2><p>In a free-market economy, private enterprises determine their levels of production in response to the law of supply and demand.</p><p>In a command economy, the decision is dictated by government.</p><p>Few free-market economies today operate entirely on the principle of laissez-faire. A government may use public policies and regulations to encourage the production of a product, such as fuel-efficient cars.</p><p>And some command economies have loosened their control. China&apos;s economic boom did not begin until it created its own blend of socialist ideology and capitalist enterprise.2</p><h2 id="h-how-do-central-plans-work-in-a-command-economy" class="text-3xl font-header !mt-8 !mb-4 first:!mt-0 first:!mb-0">How Do Central Plans Work in a Command Economy?</h2><p>Communist nations with command economies are prone to introducing multi-year plans that are expected to result in improved conditions for all its people. China has had no fewer than 14 five-year plans, with the current one ending in 2025.3</p><p>Central plans generally set goals for each industry and establish strategies for every sector. Industries are required to participate in government objectives such as reducing carbon emissions or revitalizing rural economies.</p><p>The Complete Introduction to Economics</p><p>Learning the basics of economics is easier than you think, especially when <a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://adclick.g.doubleclick.net/pcs/click?xai=AKAOjssvf8YMLi9vb1K9HGnFdzz7v9v2f5jq-izM3Fq2-jgX-JJSUZ7R6isZfAKFOcLJA1Kd8OxDIs66abrqA0gtxHxQtw8VLf9LkspK3n9PXx-KQRhGbICKxOISJpunB5DKwkvKXzMqQxNdJkpFaiVQ4ryv2hOkd6E678pGc0ExmFnK3E7Z3Vi0FyZQnWob3zJ_KKwiePtGfY19WsBEVM-ENb27zKXj_uDFkDD_J_aKY5OezsCRHVAFxtTKJlhSEUN5kNrmpiqe4V9bEQtE-SDhMi8ITdu01YR20pS3x_nR9LOeawCu49k3adyKPfWy8XZyoZoJUkHAsx8jJQ&amp;sig=Cg0ArKJSzHWuyfACkseDEAE&amp;fbs_aeid=%5Bgw_fbsaeid%5D&amp;urlfix=1&amp;adurl=https://click.linksynergy.com/deeplink?id=RL7M2q*4kuk&amp;mid=39197&amp;murl=http%3A%2F%2Fwww.udemy.com%2Ftopic%2Feconomics%2F">courses are taught by instructors from all over the world.</a> With Udemy, you’ll be able to <a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://adclick.g.doubleclick.net/pcs/click?xai=AKAOjssvf8YMLi9vb1K9HGnFdzz7v9v2f5jq-izM3Fq2-jgX-JJSUZ7R6isZfAKFOcLJA1Kd8OxDIs66abrqA0gtxHxQtw8VLf9LkspK3n9PXx-KQRhGbICKxOISJpunB5DKwkvKXzMqQxNdJkpFaiVQ4ryv2hOkd6E678pGc0ExmFnK3E7Z3Vi0FyZQnWob3zJ_KKwiePtGfY19WsBEVM-ENb27zKXj_uDFkDD_J_aKY5OezsCRHVAFxtTKJlhSEUN5kNrmpiqe4V9bEQtE-SDhMi8ITdu01YR20pS3x_nR9LOeawCu49k3adyKPfWy8XZyoZoJUkHAsx8jJQ&amp;sig=Cg0ArKJSzHWuyfACkseDEAE&amp;fbs_aeid=%5Bgw_fbsaeid%5D&amp;urlfix=1&amp;adurl=https://click.linksynergy.com/deeplink?id=RL7M2q*4kuk&amp;mid=39197&amp;murl=http%3A%2F%2Fwww.udemy.com%2Ftopic%2Feconomics%2F">understand what economics is all about</a> and the difference between microeconomics and macroeconomics. You’ll also be able to take courses that span over 65 languages and have a <a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://adclick.g.doubleclick.net/pcs/click?xai=AKAOjssvf8YMLi9vb1K9HGnFdzz7v9v2f5jq-izM3Fq2-jgX-JJSUZ7R6isZfAKFOcLJA1Kd8OxDIs66abrqA0gtxHxQtw8VLf9LkspK3n9PXx-KQRhGbICKxOISJpunB5DKwkvKXzMqQxNdJkpFaiVQ4ryv2hOkd6E678pGc0ExmFnK3E7Z3Vi0FyZQnWob3zJ_KKwiePtGfY19WsBEVM-ENb27zKXj_uDFkDD_J_aKY5OezsCRHVAFxtTKJlhSEUN5kNrmpiqe4V9bEQtE-SDhMi8ITdu01YR20pS3x_nR9LOeawCu49k3adyKPfWy8XZyoZoJUkHAsx8jJQ&amp;sig=Cg0ArKJSzHWuyfACkseDEAE&amp;fbs_aeid=%5Bgw_fbsaeid%5D&amp;urlfix=1&amp;adurl=https://click.linksynergy.com/deeplink?id=RL7M2q*4kuk&amp;mid=39197&amp;murl=http%3A%2F%2Fwww.udemy.com%2Ftopic%2Feconomics%2F">30-day money-back guarantee.</a> Learn more about Udemy and <a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://adclick.g.doubleclick.net/pcs/click?xai=AKAOjssvf8YMLi9vb1K9HGnFdzz7v9v2f5jq-izM3Fq2-jgX-JJSUZ7R6isZfAKFOcLJA1Kd8OxDIs66abrqA0gtxHxQtw8VLf9LkspK3n9PXx-KQRhGbICKxOISJpunB5DKwkvKXzMqQxNdJkpFaiVQ4ryv2hOkd6E678pGc0ExmFnK3E7Z3Vi0FyZQnWob3zJ_KKwiePtGfY19WsBEVM-ENb27zKXj_uDFkDD_J_aKY5OezsCRHVAFxtTKJlhSEUN5kNrmpiqe4V9bEQtE-SDhMi8ITdu01YR20pS3x_nR9LOeawCu49k3adyKPfWy8XZyoZoJUkHAsx8jJQ&amp;sig=Cg0ArKJSzHWuyfACkseDEAE&amp;fbs_aeid=%5Bgw_fbsaeid%5D&amp;urlfix=1&amp;adurl=https://click.linksynergy.com/deeplink?id=RL7M2q*4kuk&amp;mid=39197&amp;murl=http%3A%2F%2Fwww.udemy.com%2Ftopic%2Feconomics%2F">get started today.</a></p>]]></content:encoded>
            <author>cffb@newsletter.paragraph.com (cffb)</author>
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            <title><![CDATA[Absolute Advantage]]></title>
            <link>https://paragraph.com/@cffb/absolute-advantage</link>
            <guid>owkeJGF2OV4PJUjqluo8</guid>
            <pubDate>Tue, 07 Jun 2022 09:02:44 GMT</pubDate>
            <description><![CDATA[What Is Absolute Advantage?Absolute advantage is the ability of an individual, company, region, or country to produce a greater quantity of a good or service with the same quantity of inputs per unit of time, or to produce the same quantity of a good or service per unit of time using a lesser quantity of inputs, than its competitors. Absolute advantage can be accomplished by creating the good or service at a lower absolute cost per unit using a smaller number of inputs, or by a more efficient...]]></description>
            <content:encoded><![CDATA[<h2 id="h-what-is-absolute-advantage" class="text-3xl font-header !mt-8 !mb-4 first:!mt-0 first:!mb-0">What Is Absolute Advantage?</h2><p>Absolute advantage is the ability of an individual, company, region, or country to produce a greater quantity of a good or service with the same quantity of inputs per unit of time, or to produce the same quantity of a good or service per unit of time using a lesser quantity of inputs, than its competitors.</p><p>Absolute advantage can be accomplished by creating the good or service at a <a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://www.investopedia.com/terms/l/low-cost-producer.asp">lower</a> <a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://www.investopedia.com/terms/u/unitcost.asp">absolute cost per unit</a> using a smaller number of inputs, or by a more <a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://www.investopedia.com/terms/e/efficiency.asp">efficient process</a>.</p><h3 id="h-key-takeaways" class="text-2xl font-header !mt-6 !mb-4 first:!mt-0 first:!mb-0">KEY TAKEAWAYS</h3><ul><li><p>Absolute advantage is when a producer can provide a good or service in greater quantity for the same cost, or the same quantity at a lower cost, than its competitors.</p></li><li><p>A concept developed by Adam Smith, absolute advantage can be the basis for large gains from trade between producers of different goods with different absolute advantages.</p></li><li><p>By specialization, division of labor, and trade, producers with different absolute advantages can always gain more than producing and consuming in isolation.</p></li><li><p>Absolute advantage can be contrasted with comparative advantage, which is the ability to produce goods and services at a lower opportunity cost.</p></li></ul><p>0 seconds of 0 secondsVolume 75%</p><br><p>1:59</p><h4 id="h-basic-concept-of-absolute-advantage" class="text-xl font-header !mt-6 !mb-3 first:!mt-0 first:!mb-0">Basic Concept Of Absolute Advantage</h4><h2 id="h-understanding-absolute-advantage" class="text-3xl font-header !mt-8 !mb-4 first:!mt-0 first:!mb-0">Understanding Absolute Advantage</h2><p>The concept of absolute advantage was developed by 18th-century economist <a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://www.investopedia.com/updates/adam-smith-economics/">Adam Smith</a> in his book <a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://www.investopedia.com/updates/adam-smith-wealth-of-nations/"><em>The Wealth of Nations</em></a> to show how countries can gain from trade by specializing in producing and exporting the goods that they can produce more efficiently than other countries. Countries with an absolute advantage can decide to specialize in producing and selling a specific good or service and use the generated funds to purchase goods and services from other countries.</p><p>Smith argued that specializing in the products that they each have an absolute advantage in and then trading the products can make all countries better off, as long as they each have at least one product for which they hold an absolute advantage over other nations.</p><p>Absolute advantage explains why it makes sense for individuals, businesses, and countries to <a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://www.investopedia.com/terms/t/trade.asp">trade</a> with each other. Since each has advantages in producing certain goods and services, both entities can benefit from the exchange.</p><p>This mutual gain from trade forms the basis of Smith’s argument that <a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://www.investopedia.com/terms/s/specialization.asp">specialization</a>, the division of labor, and subsequent trade lead to an overall increase in prosperity from which all can benefit. This, Smith believed, was the root source of the eponymous &quot;Wealth of Nations.&quot;1</p><h2 id="h-absolute-advantage-vs-comparative-advantage" class="text-3xl font-header !mt-8 !mb-4 first:!mt-0 first:!mb-0">Absolute Advantage vs. Comparative Advantage</h2><p>Absolute advantage can be contrasted with <a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://www.investopedia.com/terms/c/comparativeadvantage.asp">comparative advantage</a>, which is when a producer has a lower <a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://www.investopedia.com/terms/o/opportunitycost.asp">opportunity cost</a> to produce a good or service than another producer. An opportunity cost is the potential benefits an individual, investor, or business misses out on when choosing one alternative over another.</p><p>Absolute advantage leads to unambiguous gains from specialization and trade only in cases where each producer has an absolute advantage in producing some good. If a producer lacks any absolute advantage, then Adam Smith’s argument would not necessarily apply.</p><p>However, the producer and its trading partners might still be able to realize gains from trade if they can specialize based on their respective comparative advantages instead.</p><h2 id="h-example-of-absolute-advantage" class="text-3xl font-header !mt-8 !mb-4 first:!mt-0 first:!mb-0">Example of Absolute Advantage</h2><p>Consider two hypothetical countries, Atlantica and Pacifica, with equivalent populations and resource endowments, with each producing two products: guns and bacon. Each year, Atlantica can produce either 12 tubs of butter or six slabs of bacon, while Pacifica can produce either six tubs of butter or 12 slabs of bacon.</p><p>Each country needs a minimum of four tubs of butter and four slabs of bacon to survive. In a state of <a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://www.investopedia.com/terms/a/autarky.asp">autarky</a>, producing solely on their own for their own needs, Atlantica can spend one-third of the year making butter and two-thirds of the year making bacon, for a total of four tubs of butter and four slabs of bacon.</p><p>Pacifica can spend one-third of the year making bacon and two-thirds making butter to produce the same: four tubs of butter and four slabs of bacon. This leaves each country at the brink of survival, with barely enough butter and bacon to go around. However, note that Atlantica has an absolute advantage in producing butter and Pacifica has an absolute advantage in producing bacon.</p><p>If each country were to specialize in their absolute advantage, Atlantica could make 12 tubs of butter and no bacon in a year, while Pacifica makes no butter and 12 slabs of bacon. <a target="_blank" rel="noopener noreferrer nofollow ugc" class="dont-break-out" href="https://www.investopedia.com/ask/answers/040615/what-are-economic-impacts-specialization.asp">By specializing</a>, the two countries divide the tasks of their labor between them.</p><p>If they then trade six tubs of butter for six slabs of bacon, each country would then have six of each. Both countries would now be better off than before, because each would have six tubs of butter and six slabs of bacon, as opposed to four of each good which they could produce on their own.</p><h2 id="h-how-can-absolute-advantage-benefit-a-nation" class="text-3xl font-header !mt-8 !mb-4 first:!mt-0 first:!mb-0">How Can Absolute Advantage Benefit a Nation?</h2><p>The concept of absolute advantage was developed by Adam Smith in <em>The Wealth of Nations</em> to show how countries can gain by specializing in producing and exporting the goods that they produce more efficiently than other countries, and importing goods other countries produce more efficiently. Specializing in and trading products that they have an absolute advantage in can benefit both countries as long as they each have at least one product for which they hold an absolute advantage over the other.1</p><h2 id="h-how-does-absolute-advantage-differ-from-comparative-advantage" class="text-3xl font-header !mt-8 !mb-4 first:!mt-0 first:!mb-0">How Does Absolute Advantage Differ From Comparative Advantage?</h2><p>Absolute advantage is the ability of an entity to produce a product or service at a lower absolute cost per unit using a smaller number of inputs or a more efficient process than another entity producing the same good or service. Comparative advantage refers to the ability to produce goods and services at a lower opportunity cost, not necessarily at a greater volume or quality.</p><h2 id="h-what-are-examples-of-nations-with-an-absolute-advantage" class="text-3xl font-header !mt-8 !mb-4 first:!mt-0 first:!mb-0">What Are Examples of Nations With an Absolute Advantage?</h2><p>A clear example of a nation with an absolute advantage is Saudi Arabia, The ease with which it can reach its oil supplies, which greatly reduces the cost of extraction, is its absolute advantage over other nations.</p><p>Other examples include Colombia and its climate—ideally suited to growing coffee—or Zambia possessing some of the world’s richest copper mines. For Saudi Arabia to try and grow coffee and Colombia to drill for oil would be an extremely costly and, likely, unproductive undertaking.</p>]]></content:encoded>
            <author>cffb@newsletter.paragraph.com (cffb)</author>
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