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Currency is simply a way to represent value that is convenient and almost universally accepted. Everything in your MUD that a player wants has real-world value, just like currency. You're paying people with things that have real value, just like if I gave you a stereo for doing something instead of actual cash. Further, time is worth money (at least the time of everyone I know is), and there exists an exchange rate such that they are equivalent (it's called a wage in employment markets).
You make your people pay for things with real value with their time, which also has real value. I don't see a fundamental difference.
--matt
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