Category: Cryptoes

Crypto is money-as-a-game

Axie Infinity Crypto As Game
Crypto amplifies the “game” aspects of modern money. In essence, crypto is an infinite 24/7 global game.

By using the lens of gaming and gamification, we can gain some insights into crypto culture and behavior outside of the standard technological or macroeconomic lens.

—

For example, here are some well-known properties of games:

  • achievements and progress bars
  • branching choices
  • leaderboards
  • characters
  • multi-player and single-player modes
  • storylines

I’ll briefly review each element and provide some directions and examples of how it applies in crypto.

Achievements + progress bars

Making more money is its own achievement. Becoming a millionaire, for example, where your “net worth” is the progress bar. Or achieving accredited investor status.

In crypto, this behavior is amplified:

-X’s blue checkmark
-Becoming a crypto “whale”
-Holding specific high value NFTs (eg, a Punk)
-How many bitcoin or ethereum or doge you own (“doge millionaire”)
-The year you “joined” crypto (OG-ness)
-Wallet as progress bar – since wallets are public and trackable, you can see someone’s holdings and performance over time (in a manner)

Branching choices

Money is a limited resource. So when you own $100 of Solana, for example, that is $100 less of Ethereum that you can own. This itself is a branching choice, which leads to follow-on opportunities. For example, if you own ETH, it’s easier to invest in Ethereum L2 tokens and projects (like Optimism, Arbitrum). If you own SOL, you can buy Solana NFTs and stake your SOL.

Leaderboards

You can argue that crypto itself – due to its onchain nature – is one giant leaderboard.

There are tools like Whalestats and Bitcoin Rich List to see top holders in a typical leaderboard.

There are designations like “whale”, “orca”, “shrimp”, indicating size of holdings.

Every project is ranked by price, market cap, and a number of crypto-specific metrics via tools like Coingecko and DefiLlama.

NFT projects are measured by floor price and unique holders.

Characters

There is a strong culture of privacy in crypto despite data being onchain. Pseudonyms / anonyms are common and accepted (Hasu, PlanB, PunkXXXX) on X, Discord, Telegram, and so forth.

There is also widespread usage of NFTs as PFPs on X and other social media. People often have multiple accounts (in addition to multiple wallets) where each one is a “character” of sorts in the giant crypto game.

Multi-player and single-player modes

In crypto single player, your goal is to maximize gains (WAGMI, HFSP) and maximize influence (eg, your X following, tokens held for governance).

In crypto multi player, it’s things like (3,3), NFT PFP communities (Ape follow Ape), maxi culture, collective memes (price rollercoaster, just buy bitcoin, Agustin Carstens).

Storylines

Good storytelling in games increase emotional engagement and stories provide a superstructure for gameplay. Narrative is itself a meme in crypto culture, and a commonly accepted driver of price and engagement. Not only narratives (“POS will grow”) but meta-narrative (psy-ops).

Each token community and NFT project has its own nicknames, lore, and history. Bitcoin has Satoshi and the fork wars and Craig Wright (scammer). Eth has Vitalik and the DAO hack and Bankless. And so on.

Heroes (Michael Saylor) and villains (SBF, Gensler), rise and fall dynamics (Bitmex / Arthur, Ripple & SEC), collective storytelling and meaning-making via Discord, TG, X, and podcasts… when Michael Lewis writes a book about it, you know there is a good story to tell.

—

Not sure I have a sharp point or singular conclusion. There is another framing of crypto as a new religion (or a young growing cult). Maybe I’ll explore that in a future post.

If gold were just like bitcoin…

Bitcoin Gold

Many people think of bitcoin as digital gold. And that is true, but bitcoin is also much more. This misunderstanding is part of why bitcoin is still so undervalued.

For example, bitcoin is both a bearer currency and a payment network. It’s like the USD + PayPal, if they were inseparable from each other. Admittedly a very imperfect analogy.

But I want to pose a thought experiment:

What if gold were exactly like bitcoin? What if a gold bar or a gold coin could do everything that bitcoin can currently do?

If gold were exactly like bitcoin…

You could send gold to anyone in the world, anywhere in the world, in 10 minutes, for less than $10 (as long as they had an internet connection)

You could send the tiniest fraction of gold or a suitcase full, and it would be just as fast, cheap, and easy to send

With a simple computer program and internet connection, you could instantly verify whether the gold you have is real or fake, at no extra cost

Anyone in the world could instantly verify how much gold existed in the world, and exactly how much gold was held by each owner (each wallet)

Anyone in the world could also see every time new gold was minted, old gold was destroyed, or gold was sent.

You could carry any amount of gold that you want, to anywhere in the world, just by memorizing or writing down 12 unique words. No need to worry about gold’s heavy weight, or risk of confiscation, or losing it in your checked luggage.

Right now, there are people around the world working to improve this “gold”, and everyone who holds some can enjoy the improvements. So if someone devised a way to make sending gold cheaper or faster, every gold holder would enjoy this upgrade.

People are also working to build products and services on top of “gold”, that make use of its many unique features. For example, someone could build a tool that allowed you to temporarily lend small fractions of your gold (the lightning network), and in return you would earn more gold for providing this service. And anyone who holds gold could use this tool

You would know exactly how much new gold is mined around the world, every minute, hour, and year, and by exactly which miners. Further, every 4 years, the rate of newly mined gold would drop by half, in perpetuity

Finally and perhaps most importantly, you are certain that there will only ever be a maximum of 21 million “gold” units in the world, and that is also public and independently verifiable

—

If gold were bitcoin… but gold is not. It can do none of those things. And that is why, slowly and inexorably, bitcoin will win in price and mindshare and adoption.

Bitcoin is gold with wings. Or conversely, gold is like a dumb bitcoin.

There are many more differences that I have left out. But I hope it’s an interesting thought experiment.

Note: of course, there are some benefits to physical gold that bitcoin doesn’t have. For example, gold has materiality. Gold has some niche industrial uses.

Sensible view on what’s likely to happen with bitcoin next year

Fan of their writing and analysis: https://capriole.com/issue-33/

To quote:

—
So, we have three incredible catalysts on the very near horizon:

1. The best inflation hedge and hardest commodity known in a macro environment with the tightest economic conditions on record which is primed to pivot.

2. Institutional regulatory status and on-ramps with imminent ETF approvals by the SECs

3. The Halving event, forecast for 16 April 2024.
—

Of course everything could go the exact opposite way — such is markets. Plenty more shoes that *could* drop, but I find it unlikely we’ll see sub-$20K Bitcoin again before we see 6 figures.

Must watch to understand the deep principles behind bitcoin and crypto

An @erikvoorhees banger from @Permissionless conference

So many powerful quips, just to call out one:

“For permission is what the kindergarten child attains to go to the bathroom… it is not what respectable men attains in his financial affairs… for if I may transact with you only by the good graces of those watching me from above, then I am something below”

Fucking right.

Is money always remade by powerful new technologies?

roblox-robux

In Lyn Alden’s fantastic new book Broken Money, she talks about the natural arc of money towards increasing “hardness”. Any time there’s a new form of money — say, like rare pearls — the ingenuity and incentive of humanity is to find a way to “break” that money by, for instance, developing new ways to harvest and grow the oysters, or manufacture fake replicas, or travel far distances to collect more for less effort. In her (and others’) estimation, this is perhaps the primary reason gold has remained the hardest money for thousands of years. It still hasn’t been broken — but that could change in the future if, for example, we developed asteroid mining or found massive new gold mines.

Anyway, it got me thinking that perhaps new technology is what really drives the development of new money. Gold is an outlier, and we just haven’t yet developed the technology to enable cost-effective gold production or scalable asteroid mining.

The question I’m asking myself is something like — do powerful new technologies almost inevitably lead to the creation of new monies? I use the word “technology” in the broad sense, to quote one of my favorite simple definitions, “technology is anything that breaks a constraint”.

A brief and incomplete history of money follows:

Nature’s commodities eg, shells, teeth, shiny rocks – these required the (then novel) technologies of finding, harvesting, cleaning, storing

Metal coinage – the technologies of mining, smelting, minting, verification

Paper money – the technologies of paper making, writing, printing press (printing @ scale), counterfeit methods

Fiat money – the technologies of nation states (that could organize, distribute, and track it at great scale), distribution networks, telecommunications networks

Bitcoin / Ethereum – the technologies of the internet, cryptography, encryption, digital mining, distributed systems

All of these new monies were the products of new technologies, which both enabled their creation, while also rendering older forms of money either “broken” or inferior.

**On a somewhat related note, think about in-game currencies like Robux in Roblox. The game of Roblox is not a new general purpose technology, but rather an application of many technologies, yet it is cutting edge, and though Roblox the game doesn’t *require* Robux the money to function, it feels like a natural moving forward, in much the same way that humans evolved to prefer burgers and bagels though we could technically eat nuts and plants

Alright I’ve rambled enough. Just wanted to get some thoughts down on blog.

I ask the question because for me, the above conclusion implies that as powerful new technologies are developed, they may inevitably lead to the development of new kinds of money. On the horizon I see technologies like AI, VR / metaverse, bioengineering, and many others (known and unknown). And aliens, of course. Hopefully wise and peaceful ones.

🤔🤔🤔