So, to start off, let me explain to you how keys and refined influence eachother. First of all you need to understand supply and demand. The simple rule is that the more there is of one thing compared to another, the less it will be worth. So, for example, if I gave John 1 product X, and I gave Tom 1 product Y, they would be worth the same. 1 Y is worth 1 X. Now as soon as I give John 2 X's and still give Tom 1 Y, 1 Y would be worth 2 X's.

So if I gave 20 people 3 X's each, and I gave another group of 20 people 1 Y each, and asked them to trade, a balance of 1 Y is worth 3 X's would soon be born. So how does this apply to refined and keys? It is simple. Keys are always sold for $2,49, which means that the supply for keys is always the same. To summarize:
The supply for keys never changes, so only demand decides its price in refined.

Now refined however, is dropped randomly. So the supply for refined steadily rises if no-one would ever get rid of refined. Luckily refined can be used to craft hats, which means that refined gets deleted, and that means that the supply can drop. So here's the one line you should remember:
Refined's value depends on how useful the refined is.

Once upon a time, Valve added the Mannconomy. That meant that from now on, people could trade items with eachother in a completely open economy. This not only meant you could abstractly trade your lame hats for cool ones, it started a complete economy revolving around keys.



At the time, the advantages of a key were limited. A key could unlock a hat, but more often than not, you'd just get a weapon or a tool. Weapons or tools are lame. At the same time, 3 refined would guarantee you one fine looking hat. So the modern TF2 player had two options:

• Buy a key for $2,49 and maybe get a much-wanted hat.
  
• Combine 3 refined and know for sure you'll get a hat.

You may have noticed that 3 refined seems to be the superior option here. If unusuals weren't a thing, no-one would have bought keys at this time. So obviously, trading a key for 3 refined seemed like a pretty fair deal. You would trade a risky chance for either better or worse than a hat for a certainty of getting a hat. So this is how the very first keys came to be worth only a few refined! Simply because refined had actual specific advantages over keys.

To get back to my basic rules: refined was pretty useful, so it's price was pretty high.

So then the next step Valve took was reforming crates, in a positive way. From now on, crates would never spawn useless tools or weapons, instead it would spawn strange weapons. Strange weapons were cool.



So from now on, people were more tempted towards opening a crate for $2.50, because you'd know the contents would never be that lame. On the other hand, you could still just carve a sure way to a hat with 3 refined. The new set of options for a TF2 playing player would be as such:

• Open a crate for $2,49, which would get you a chance for a hat (maybe even unusual) but a pretty cool item even when you aren't so lucky.
  
• Combine 3 refined and create a hat.

So as of now, keys weren't all that bad of a choice anymore, because losing wasn't as bad. People were more inclined to get a key and open a crate. Demand for keys rose, and with supply staying the same (keys are always $2,49) that of course means higher prices. Keys found a new balance at a much higher price.

To deduct that back to my rule: refined was less useful, so refined was worth less.
or:
Refined isn't crafted away as much anymore, so supply rises and price drops.

So now Valve did something that caused a little more complicated effect: community crates. Community crates were 100% sure to unlock a hat. No more worrying: keys always got you a hat!



To offset the predictable fall of refined (refined is of course useless when keys always get you a hat and a chance for an unusual), Valve made these crates use different keys. Logically, using different keys would make sure that normal keys stayed safe from the refined price drop. Normal keys didn't have the advantages these special keys had, so they would not be affected, right?

WRONG.

If keys would be sure to get you a hat, that will mean way more hats will enter the market. When hats are plentiful, their price drops (as we learned). So after a while, hats started dropping in value. Everybody had enough hats, people were willing to sell them for 1.33 refined. So this adds a third option to the choice list:

• Unlock a hat (or unusual) for $2,49 guaranteed.
  
• Buy a hat for 1.33 refined.
  
• Craft a random hat for 3 refined.

This has an obvious effect: crafting hats is useless. Refined is useless. And coming back to our rule, that means refined is worth nothing anymore. So refined is not being used, it's just heaping up due to drops. That means that the supply of refined far surpasses the demand, which is now non-existant.

So that's why keys are worth tons of refined: because hats are worthless and therefore refined is worthless. And the value of refined is only dropping because you literally get the stuff for free.

Recently I thought of a fact that I have seemed to forgotten in this guide: it is what I shall call the 'Gold Effect'.

As you may know, in times of economic uncertainty people want to cling onto a solid value item. If your money can shift in value from day to day, it is nice to trade your money for something of which you know that it won't change value tomorrow. In the real world, we call this gold.



Gold is comparable with keys, both have a set value that is very unlikely to change. So if the prices of refined were to be very uncertain, people may be inclined to trade it for the much more reliable key. Coincidentally, this exact thing is going on in the real world with gold right now.

We face economic uncertainties at the moment, so people are buying gold for the affermentioned reasons. In other words: the demand for gold rises. With supply staying steady, that means a higher price for gold. In the last year or so, gold has risen from 30 euros per gram to over 50 euros per gram, just because people want value-solid items instead of money. This has sparked an enormous trade in gold, you may have seen these annoying 'CASH 4 UR GOLD' places popping up as well.

So, the same thing is happening to keys. We have just discussed how the increase in unwanted hats already dropped refined in value, but this added Gold Effect drops it even faster. Because refined drops in value, people don't want it anymore and trade it for keys, which only further drops its value, which makes people willing to pay more for a key and so on. As soon as refined started dropping in value we hit a snowball effect, and that will only increase the rate in which refined loses value until refined is just discarded forever.

So that's just a little addition as to why exactly refined is losing value this fast. I'm a little ashamed I didn't think of this before, but I guess I better tell you this late than never.

If you had been paying any attention you'd know what Valve has to do: make refined useful. My basic rule on the top of the page already says so. So, Valve: make refined have a use. That tiny little change will have massive effects on the economy. I have even erected a scientific formula for what will happen if refined can be crafted into a chance for special, extremely rare hats:









Thanks for reading, and praise Gaben.