|Source information needed!|
Gold farmers, not to be confused with regular "farmers" or "grinders", are players who stay online for extremely long hours and farm mobs for the purpose of selling the in-game money they accumulate for real-world money. The description Chinese gold farmer is often used, as many of these players are Chinese (though recent magazine articles have placed the majority blame on Indonesia). This was strongly suggested when gold selling websites ran out of gold during the Chinese New Year, their employees presumably having gone on vacation.
Gold farmers then take this money and attempt to sell it to other people through several web sites and auctions in exchange for real-world money. This is against the Terms of Service as Blizzard considers all gold and items in game to be its property. Such gold farmers are frequently banned from the game. However, completely getting rid of them is nearly impossible, because they can just buy a new copy of the game and create a new account. The recent addition of the "report spam" feature helps player to report farmers who advertise in-game. Some players have also taken on a policy of griefing gold farmers.
Gold farmers are commonly considered "greedy", and will frequently be labeled as a loot ninja, or act plain antisocial. Often they do not speak the native server language, or have only memorized a select few sentences, thus making it harder to effectively communicate with them in game.
The problem has become so great that some sites which hold user-made interface enhancements have begun listing add-ons specifically designed to catch such whispers, filter them out from being displayed to the player, make a GM ticket and send it automatically.
Gold farming in America
Recent attempts at cost-effective gold farming have begun in America. A number of US-based gold suppliers for World of Warcraft have formed a vast network of college and professional gamers, such as Forsaken Farmers. In their spare time, these gamers farm gold and power level customer accounts. In turn, they receive such benefits as free time cards, accounts, gold, power leveling services and even cash. These gamers are instructed to follow all in-game rules and refrain from using gold farming techniques such as bots, macros and hacks which are frowned upon in the gaming world. American-based gold farmers are far less common than ones located in Asia, simply because of the abundance of cheap labor in Asia.
Gold farming in China
According to estimates, around 100,000 people in China are employed as gold farmers, as of December 2005. This represents about 0.4% of all online gamers in China. Chinese gold farmers typically work twelve hour shifts, and sometimes up to eighteen hour shifts. Wages depend heavily on location and the size of the gold farming company. One gold farming operation in Chongqing in central China with 23 gold farmers was reported to pay its employees the equivalent of about 120 U.S. dollars per month, while workers at a larger gold farm in Fuzhou earn the equivalent of about 250 U.S. dollars per month. The rising prevalence of gold farming has led to the creation of gold farm brokerages.
Because of reports indicating many gold farmers are located in China they are sometimes referred to as "Chinese farmers" or "China farmers".
There are "gold farmers" (sometimes known as Tyrexs) or "gold farms" in other countries as well such as the Philippines, Indonesia and Mexico. However, they do not approach the scope and scale of the Chinese farm industry. China's abundant labor, availability of high-speed Internet connections and cheap computers have made it a powerhouse in collecting virtual assets for online games, fueling the market among the 30 million or so online gamers worldwide.
An issue unrelated to the legal and social issues of the gold farmer is their effect on game economies. Blizzard Entertainment and some players suggest that by introducing new gold into the system, farmers are causing inflation. However, a WoW server is not a closed system, gold farming is not a monopoly industry and farmers make a good deal of their gold off the sale of items. As such, they are competing against players and each other within the economy of a given gameserver, driving prices down and thus inflation is actually staved off -- the Wal-Mart effect, if you will.
Even non-gold buying players quickly come to rely on the prices set by the commoditization of items farming helps to create. And gold farmers themselves invest heavily in a game's economy -- buying gear that helps them farm better, such as bags and potions. Recent crackdowns on gold farming accounts have resulted in a 2 to 4x increase in the prices of enchanting materials, boosted the prevalence of premium-priced epics, and stalled the market for other high level trade goods and services, leaving the profitability of tried-and-true schemes in question. This leads some to the conclusion that while gold farming is indeed disreputable, it also has a positive effect -- a stable, competitive in-game market.
An alternative view
The other view is that in fact, gold farming does cause inflation. It has been seen throughout history, that the decrease in value of a currency, naturally drives up the prices of the goods it is used to purchase. It can be said that gold farming is a self-sustaining industry that fuels its own corruption. By inflating the economy and driving up the prices of items, more in-game gold is required to purchase them. Rather than farm this gold for themselves, players are as such more likely to purchase it and simply save themselves the trouble. This is a circular problem and does nothing more than feed itself. The perceived 'lower price' of items can be viewed as nothing more than a myth, not backed up by any sound evidence, with basic economics stating that inflation is a real problem in any economy, including that of World of Warcraft.
- The fact that an out of game economy drives down inflation is not a "myth"; it's a studied phenomenon (though most heavily around Second Life) that is evident anytime there's a crackdown on gold farmers. Prices go up. Either way, the readiness of gold in BC thanks to daily quests and other game mechanics has largely reduced the gold farming industry while at the same time creating a robust economy. 
Gold farming can be viewed as particularly harmful to new players, who, unlike those who began to play on day one, have to deal with the fact that items are far more expensive, sometimes obscenely so, whereas the money received from quests and the vendoring of rewards is a lot lower. The sale of lower level items such as linen cloth and basic ore which are often the basis of a low-level character's economic growth, have bottomed out due to the fact that most players are now Level 60 and have no use for these items, or are playing twink-alts with an artificially high sum of gold which new players do not possess.
- Note: Many of these twink-alts will have an artificially high sum of gold, leading to higher prices in AH. That means the new players will be able to sell things for more gold than before, easing them into the system better. However, you must note that this relies often on the sheer luck of the player. Many players may not receive a BoE blue for a very long time, and some may not even see a BoE epic in their life-time of play. Such 'twink' items are therefore not a reliable basis for the economic-growth of a low-level player.
- The fact that end-game items are more dependent on how able you are to raid than how much gold you have also eases the problem of gold inflation. There are also plenty of money sinks at 60 (mainly repair costs), and many end-gamers will be using much of their bought gold solely on these money sinks, which also drives down inflation. However, while World of Warcraft is most certainly well-designed in this respect, it still does not completely eliminate the problem. Basic economics dictate that inflation in this situation is guaranteed and while money-sinks do help to limit it somewhat, they do not stop it.
Merging both economic arguments
Both of the arguments seen above can actually be merged together. Gold farming increases both the volume of gold in the game (which increases demand for higher items, and is inflationary) and the volume of items in the game (increases supply of higher items, is deflationary.) As such, the impact of gold farming could theoretically go one way or the other. One facet that has not been considered properly is that gold farmers make a significant amount (if not most) of the money to be sold by selling the items they find. This will result in increased supply for some items, and therefore the deflation that has been argued above. On the other hand, markets where there is no excess supply will result in inflation.
The key point that is being missed is that non-competitive deflation (which occurs due to market domination) is not necessarily a good thing. All sellers must devalue their items in order to sell them, placing sellers who are not gold-farmers at a disadvantage, decreasing their income/wealth. Economic theory also dictates that the total amount of money involved is lower than it should be, decreasing the efficacy of the auction house cut system that helps fight money supply inflation (that can potentially impact on other sections of the game).
This comes to the most significant economic problem with gold farming; non-gold purchasers are artificially poor not only because they do not buy gold, but because their sales are undervalued. The distribution of income between players is altered, such that theoretically there is a potential decrease in the wealth of the "middle" and "upper-middle class" players in the game. While it could be argued that because all of the major items are deflated the issue is trivial, people typically wish to buy items of higher value than what they are selling, and more items are therefore required for the same purchase. In other words, the sellers and buyers in the markets the gold-farmer are involved in are the most susceptible of losing financially.
In the end gold farming results in benefiting and disadvantaging different player groups. Players who do not play much (and are hardly involved the market discussed), or gold buyers, or those who are already very wealthy will suffer no negative impact from item deflation, and can only gain from gold-farming. Players who sell items directly competing with the gold farmers (which would also consist of a significant portion of the buyer market) are worse off. Note: These statements are true with the presumption that the market is not perfectly competitive; the gold sellers effectively control the price of the market because they dominate the number of sellers present.
But perhaps most importantly for most players, the changed wealth distribution between players of similar caliber and similar game-time result in them having very different equipment, which many would consider an unfair advantage.
Blizzard on RMT Microtransactions
Some gold farmers have feared that someday you could use real money to buy gold in-game with a method sanctioned by Blizzard, some times called "micro-transactions." At a Game Developers Conference 2008, Rob Pardo gave a strong indication, Blizzard would not ever go this route with World of Warcraft.
- Q: Have you considered micro-transactions in WoW?
- A: We chose to go with the subscription-based model instead of that approach. We've taken the approach that we want players to feel like it's a level playing field once they're in WoW. Outside resources don't play into it -- no gold buying, etc. We take a hard line stance against it. What you get out of microtransactions is kind of the same thing and I think our player base would feel betrayed by it. I think that's something else you have to decide on up-front instead of implementing later.
- Q: But it might make it easier for the casuals to catch up....
- A: They aren't going to be the ones spending the money.
Research on gold farming
China is in fact dominant in this industry and Jin Ge, a 30-year-old Shanghai native has done a documentary on "gold farms" in China as part of his doctoral research at the University of California, San Diego. 
He is one of the many researchers who has invested his time in investigating how farm owners manage their production and distribution of virtual commodities across the border between the virtual and the real as well as the border between nations. His main aim in his research was also to delve into the background and lives of these workers "I also tried to find out what this job, combining work and play, means to Chinese gold farmers and how it feels like to live at this peculiar intersection of the virtual and the real."
Ge Jin's research is also documented in his periodical online news articles which can be found at Consumer Studies Research Network.
On January 22nd, 2009, a gold seller banner-ad appeared on the official World of Warcraft forums, which offered gold "As Low As $3/1000 WoW Gold <5 Minutes Delivery US/EU On Sale" [sic] . The advertisement was quickly removed, followed by the swift deletion of most forum threads discussing the subject. Bornakk, a community manager for World of Warcraft, made an official statement regarding the advertisement shortly after, and reinforced Blizzard's long-held stance against the practice of buying and selling gold.
Launch of Battle.net Security, 2010
On January 2010, Blizzard Entertainment, publisher of the game, stepped up its offensive on account security scams with the launch of a new website. The new Battle.net account security website expects to highlight the importance of vigilance and common sense when it comes to subscribers' accounts.
"These pages are part of a larger effort to provide you with the knowledge and tools necessary to identify and report threats to your account’s safety, to spotlight ways in which we work to fulfill our security commitment, and to act as a helpful resource in case someone manages to steal account information from you.Gold sellers and leveling services are responsible for the vast majority of all account thefts, and they are the number-one source of World of Warcraft-related phishing attempts, spyware, and even credit card theft. Players who buy gold actively support spam, hacks, and keyloggers, and by doing so diminish the gameplay experience for everyone else."
- ^ Ge Jin 2006-05-01. Chinese Gold Farmers in the Game World. Retrieved on 2010-08-31.
- ^ Lisa Poisso 2010-08-04. 15 Minutes of Fame: Cory Doctorow on gold farming. Retrieved on 2010-08-31.
- ^ Eliah Hecht 2009-01-22. Gold ads appear on official Blizzard forums. Retrieved on 2009-01-22.
- ^ Blizzard Entertainment 2010-08-07. The negative impact of buying gold. Archived from the original on 2010-08-07.