So as with much of the Diablo 3 community, I was looking forward to finally playing with the latest 1.08 patch. Finally being able to farm with a group as an archon wizard. As with any patch though, I anticipated a slight change in the auction house pricing as there is a rush of players coming back from not playing for weeks. I get home, and hear about people making tonnes of gold selling overpriced gems. I bought 15 or so to sell right away, but after I sold my lot of 15 gems, I noticed that the price on the auction house continue to skyrocket.
So we began to speculate on teamspeak, as it did not make any sense. Both the gem prices on gold auction house and real money auction house began to go up and down, until someone found out that there was a massive gold dupe method found within the game. So a lot of people were duping their gold, and then buying up all the gems, to cash out, or even worst, flip back through the real money auction house, for further duping.
Normally, this wouldn't be too hard to fix, but then a few people began using this unlimited amount of gold to buy up certain items from the auction house. ALL THE ITEMS!. Any really good item (i.e. Mempo of Twilight w/ crit chance - any stat, all the witching hours) with a buyout, were immediately all bought out from the gold auction house, and either kept on hand, or put on the real money auction house to flip. This not only hurts the economy, but this massively effects the player base, even the legit ones, as not there are less upgrades for them to get via the AH, so it will make their grind that much longer.
However, the problem is not isolated to the auction house. Since everyone was selling off gems at hyper inflated gold prices, players began using that gold to buy items, not just on the auction house, but started using the gold to trade in game for super high end items. Items that never get sold on the auction house because they are worth a lot more than the two billion gold cap. So now you have legitimate players who have really high end items who didn't catch onto the gold duping method get their items traded away for meaningless duped gold.
So what should Blizzard do? Well, first they should've pulled the plug immediately to the whole server while they sorted things out. Instead, after a few hours (maybe longer), they finally decide to shut down the auction house, and eventually block of all gold trading. But the damage has been done. But by leaving the game server up, they effectively made it even harder for them to do a complete server rollback which is the only practical solution in this case.
If I was the CEO, I would've shut down the servers, rolled everyone back, cancel & refund any transactions done that day and ate the loss. You can not just ban the dupers because that gold and the items have all been moved around already, and the damage to the economy can not be reversed without a massive rollback.
As of right now though, it seems like blizzard either is trying to rollback accounts on an individual basis. While it is a nice idea to help the legitimate players who didn't even come into contact with the duped gold, it becomes a massive undertaking as the gold has been traded outside of the auction house. They would need to roll back the auction house itself, in order to restore the items the dupers bought on mass, and then trace back all the people profiting from selling their gems, and reverse those transactions. As well as any trading of large amounts of gold in game.
A massive rollback would be the simplest solution, even though it would hurt the player base. I am in favor of it as it means that we can quickly restore the game economy back to its 1.07 state. People who did legitimate trades, can just re-do them, and the only loss would be time & a few found items. To make it up, Blizzard could simply offer a double XP weekend, with a double item drop activated for the weekend (not double MF).
If Blizzard does not act upon this properly, I am sad to say that I would seriously consider quitting this game given that the economy would never fully recover, and it's another indication that the developers do not have the ability to recognizing the actual problem once again.