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As I read it you will loose 1 item to the player that loots you and then the rest will go pooff. You will spawn with armor and weapons though.
Did I get that right?
My question is this ... what happens to your gold?
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Gold/coin is intangible so is not lost. I can't remember the in-game magical reason, but it's fairly complex part of the economy.
The above is part of it. For more on this subject on how looting works: Gypsies, Tramps, and Thieves
The key take home on this is that items are DISPOSABLE: Aside from (see link) being able to Thread and choose which items are threaded; you'll often be wearing "trash gear" anyway, and due to "encumbrance" you won't be carrying a whole house on your character either.
http://www.gdcvault.com/play/1014633/Classic-Game-Postmortem
All of these mechanics are preliminary and contingent on testing/iteration. I don't know that Goblinworks has written much in the way of actual code yet.
For the people who dislike PvP looting, the important thing to realize is that if you have strong feelings about something and want to become involved in the developement GW will listen, because they have said they will. Hence "crowdforging". Of course, you won't be the only one giving feedback.
If a game is to have a healthy, player-driven economy it needs some way for items to go poof.
Sounds a lot like EVE, again. All good so far
The bulk of the code needed is already present in the Unity middleware. There is apparently a very large library of modules/routines/libraries and graphics already developed by their community for Unity which they also should have comprehensive access to... and you know some of those folks are really quite good. So much of the coding that remains scale closely with Elder Scrolls mods when you think about it.
This is not to minimise the difficulty of engineering things server-side. That is where we need a few well-intentioned miracles. The burning of much frankicense, the crossing of fingers, and similar activities may be required on that score.
Apparently it is do-able. I know Mechwarrior tactics and a few othe titles are also going to use Unity.
To dream, perhaps to be.
I am excited for this MMO. SOmeone metnioned the EvE Like connection. The development is being lead by a former EvE dev.
http://www.strategyinformer.com/news/15596/pathfinder-mmo-led-by-former-eve-online-dev-at-new-studio-goblinworks
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