When you hear someone refer to a Minecraft server 'Economy', they're normally talking about the way the server manages the buying/selling of 'stuff' in-game. So things like in-game shops, auctions, signs to buy kits, these are all interacting with the servers' Economy.
There are lots of things to consider when creating an economy for a Minecraft server, this is a list of some of the most important.
The steps to create a Minecraft server economy:
Economy plugins are what allow you to create things like shops, auctions, etc. So finding one that has all the features you need, and has no bugs is very important. The most downloaded Economy plugins on Spigot are a good place to find a widely-used stable plugin for this.
When you first setup an Economy, you'll have to give it a name. Most large servers use names like 'Coins' or 'Gold', for good reason - because new players will know exactly what they are; your in-game currency. Using one of these or something similar, such as 'coins' is a good start.
Once you have an Economy, you need to give players something to do with it. Often things like in-game shops & auctions are used for this, but you can pretty much sell anything you want - so long as it follows the Minecraft EULA. Some examples might be selling hats, pets, kits on a KitPvP/Factions game-mode, crates that give a random reward, signs to fix items or enchant tools, etc. You can ask your players about this to get more ideas!
How players get money is another very important aspect. If you were to sell items for say 10 currency in-game, and then give all players 1,000,000 when they join, any player could buy everything immediately. They'd then get bored very quickly and your economy would become unused. Instead consider how much items will be, and give players an amount relevant to this (this is explained in more detail in the Admin Shop section below). Assume that players will AFK on your server 24/7, so if you give them money every couple of minutes - be aware of how much they would get every day.
The rich list on a server is very common - a list of the richest 10 or so players. This is normally good, as it gives players a goal - to get on that list, and stay there. This in turn encourages them to buy and sell items in-game, and to stay active. Just be aware that this can make players very competetive - causing them to find abuses in your economy. If you have say an admin sell sign for things like cactus, or wood; given the right redstone farm players could generate thousands of this item every hour and gain massive amounts of in-game money. This is examplained in more detail in the Admin shop section below.
Rewarding players is a difficult area. Often you'll need to encourage players to do things like voting on server lists (see our tip on server lists for help in this area), or maybe reward a player for helping you find a bug. You need to be objective here; this means you need to consider what giving a player 1,000,000 of your currency for voting would do, etc.
Admin Shops vs. Player Shops are a common point of confusion. An Admin Shop is a shop normally at a server spawn, or accesible via a command which allows players to buy/sell items at a specific price, whereas Player Shops allow players to make their own shops - optionally with their own pricing. There are a number of pros/cons to each of these, these are listed below.
When pricing the items in your Admin Shop, often server owners forget to start with the cheapest item. If you for example price diamond blocks at 30 currency, and then diamonds at 5 currency; you're limiting all items cheaper than diamonds to below 5 currency. Instead you should start with the cheapest items; for example price a dirt block at 2 currency, wood at 10, iron bar at 20 - then diamonds at something like 50, an amount that allows cheaper items plenty of price variance.
Inflation is a very important factor often overlooked. This refers to the value of your currency, and is mentioned in the 4th tip above. In relation to Admin Shops - you need to make sure you're not allowing players to see items easily farmed/mined. For example on a Survival server it's very easy to mine lots of minerals and chop lots of trees, so selling wood for 50 a piece would allow a determined player to earn millions a day. This would then have a knock on effect if they share their wealth around - causing all players to be very rich and so make the shop worthless. Alternatively if they keep all the money, it makes these players extremely over-powered.
Buying/selling multiples is a tricky area. Typically, if you have a buy sign for say gold block at 100 a piece; often if you sold 8 of this item at a time rather than 1 - you might sell it for slightly cheaper at 700. This can work well as it encourages players to buy/sell more, but you just need to be careful that it can't be abused. For sell signs this works particularly well - as for players selling a large numbers of items it decreases their profit slightly, and prevents them becoming over-powered too fast. A good rule of thumb is to never discount any item more than around 20% in total, as any more than this and it becomes unfair for sell signs - and over-powering for buy signs.
Something that also applies to Admin Shops, but is especially important for Player Shops, is restricting what can be bought/sold. Items such as mob spawners, beacons, spawn eggs, elytra, etc. in vanilla Minecraft were not intended to be widely available. So on for example a Survival server if you sold mob spawners - a rich player could make an incredibly over-powered mob farm; or a similar issue could occur for various other items. So just have a think when you allow buying/selling about the possible effect. Will it inflate the economy? Will it ruin trade via auctions? Will it discourage players mining/cutting trees/exploring caves? Try to keep these things in mind.
The biggest reason to use an Admin Shop over a Player Shop is scamming. This occurs when a player overcharges another player when selling something - often done to new players who aren't familiar with your economy. By having an Admin Shop this can't happen, because the prices are fixed. But in a Player Shop an experienced player could talk a new player into paying very high prices on an item - and they could then buy it back at a lower price from someone else.
Below are some example prices on a Survival/SkyBlock server.
The layout is B , S . If a B or S is missing - that means we recommend not buying/selling it to avoid inflation or harming gameplay.
Simo389 has been running Minecraft servers since 2012, and developing for them since 2013. Currently he runs MineRifts, a YouTube channel and shares advice in these tips on how to publicise & improve your own Minecraft server.