How does currency work?

Path of Exile has done away with a single unified currency entirely. Seeing as how every player is a shipwrecked survivor inhabiting a hostile land, that definitely makes sense from an in-game perspective.

The problem is, there's no way to tell what anything is worth, or which items are worth more as part of the local economy.

The merchants give you Scroll Fragments for white items, so we can sort of divine that that is the base item value. But it doesn't really flow well from there, as unidentified magic items give you Transmutation Shards, while apparently identified magic items give you Scroll Fragment(s), thereby losing 80% (or less, as you get higher level stuff) of the value, just by identifying the item.

Identified rares give you Alteration Shards, yet another item type. By taking a look at the purchasable items that Nessa has, I have figured out the following:

Item                     Cost                    Cost in total Scroll Fragments
Scroll Fragment             1                                  1  
Scroll of Wisdom     Scroll Fragmentx5                         5  
Portal Scroll        Scroll of Wisdomx3                       15
Orb of Transmutation Portal Scrollx7                         105
Orb of Augmentation  Orb of Transmutationx4                  420
Orb of Alteration    Orb of Augmentationx4                 1,680 (!!)

That gives me a good baseline, sort of, but there are quite a few orbs past that. Where does the Orb of Alchemy fit in? Orb of Chance? Chromatic Orb? Or heck, let's get crazy, and add in the Armorer's Scrap and Blacksmith's Whetstone! Or they worth anything in the local economy at all? How can I figure this whole thing out?

Solution 1:

If I understand it properly, I think there's a problem in the question itself. As you said:

The merchants give you Scroll Fragments for white items, so we can sort of divine that that is the base item value. But it doesn't really flow well from there [...]

It doesn't add up, indeed, and you gave the exact reason in your own question:

• Path of Exile has done away with a single unified currency entirely. Exact
• [...] there's no way to tell what anything is worth, or which items are worth more as part of the local economy. More or less correct

Actually, while there isn't any curve to express the value of the items in terms of value, we probably could figure one out based on the difficulty to obtain the item from the vendors.

• You can get a Scroll Fragment with pretty much any crap item (which are easy to find).
• You can make a Scroll of Wisdom with 5 Scroll Fragments (which are easy to find, but you need 5 of those).
• You can get a Portal Scroll with Scroll Fragments (but you need 15 of those). It's getting harder to obtain, but still feasible.
• You can get an Armorer's Scrap with an piece of armour with a 20% quality, or with several pieces of armor with a total of 40% quality: feasible, but you'll need patience.
• You can get a Chromatic Orb with any item that has 3 sockets of different colors and linked together: you'll have to be very patient to find one of these.
• You can get an Orb of Chance with 2 rare items that share the exact same name: it's getting super hard.
• Etc.

With that in mind, the whole currency thing becomes a matter of recipes, and the "value" of each currency item is determined by its difficulty to be "cooked" (let's put it this way) and, therefore, its rarity.

The vendor recipe system allows the player to sell items to any town vendor in exchange for a multitude of currency items and equipment. Each recipe requires semi-specific items or combinations of items be put into the sell window at the same time, and the outcome will change based on any recipes that have been matched.

Source and list of known recipes: http://pathofexile.gamepedia.com/Vendor_recipe_system

The only remaining uncertainty in this system is the drop rate of each currency item (because, of course, it's also possible to obtain them by killing mobs). But I couldn't find any information about it.

The dev diary given by Gnoupi is also an excellent reading: Dev Diary: Rethinking Gold as a Currency.

Solution 2:

That's the whole point of Path of Exile's economy. It's based on barter, there is no "fixed value", it's all about exchanging, and the value something has for you or for the buyer. As such, you can't reliably say how much something is "worth".

From the official page:

Path of Exile is an online Action RPG set in the dark fantasy world of Wraeclast. We're a small independent team of hardcore gamers based in New Zealand and have created Path of Exile as the game that we'd want to play ourselves. It is designed around a strong barter-based online item economy, deep character customisation, competitive PvP and ladder races.

To read further, here is an extended Dev diary about economy.

Solution 3:

But it doesn't really flow well from there, as unidentified magic items give you Transmutation Shards, while apparently identified magic items give you Scroll Fragment(s), thereby losing 80% (or less, as you get higher level stuff) of the value, just by identifying the item.

Actually most identified magic items give you Alteration Shards, with the exact number of shards being determined by the affixes. Only a few weak affixes give no Alteration Shards, in which case the magic item will sell for one Scroll Fragment, same as a white item.

See this page on the PoE wiki for a list of Shard values of affixes. And a while bunch more.

let's get crazy, and add in the Armorer's Scrap and Blacksmith's Whetstone!

If you're not aware, those two can be obtained by selling Superior white items. A single 20% quality Superior item will give an Armorer's Scrap (for armor) or a Blacksmith's Whetstone (for a weapon). Or multiple pieces of armor or weapons that add up to 40% quality will also sell for one Scrap/Whetstone.