Cryptomania: where is financial gamification going?
From the Fall 2021 issue of Dazed. You can buy a copy of our latest issue here
Once upon a time, declaring an interest in stock trading was a surefire way to expose yourself as, say, a little square. But over the past year, the rise of bitcoin and other cryptocurrencies like Ethereum, Dogecoin, and Polygon has spread from the dark web to TikTok, YouTube, Discord, and Reddit. And with trading apps like Robinhood and eToro making it easier than ever for young people to invest, it almost feels like a game. What does that mean investing isn’t just for baby boomers anymore, to the bone daddys and the neckbeards? Could online investment gambling really be marking a dangerous point of no return?
“Last year has seen a number of events that have gotten a new generation thinking about money and investing,” says crypto and tech journalist Guy Cocker. Many Gen Z kids, he says, have been made aware of the possibilities of trading during the lockdown, such as in January this year when a group of amateur traders on Reddit took to Wall Street and started buying stocks. of video game store GameStop, boosting its stock price from $18 in early 2021 to $500. According to data released by F&C Investment Trust in May, almost a fifth of Gen Z investors have joined digital markets in the past year, 9% after GameStop. During the craze, 62% of investors between the ages of 18 and 24 bought stocks on Reddit. In March, UK regulator the Financial Conduct Authority reported that a younger and more diverse group of consumers are increasingly taking financial risks, encouraged by easy-to-use apps and messages “which often involve the “fear of missing out”.
Turns out Fomo can really pay off. “There have been long periods of furlough that have people looking for ways to make their money work harder,” says Cocker. “Combine all of that and you have young people who are not only aware of new asset classes like crypto and NFTs, but who know how to make smart investments to make money.”
But it’s not just social media that’s going digital green. One of this year’s most popular games, Roblox, taught kids how to trade digital in-game currency with each other. In Roblox, you customize your virtual avatar by buying and selling props and body parts using ‘robux’, the game’s currency. After the game caught fire during lockdown, attracting millions of teenagers, it was criticized for encouraging tweens to do bad things with their money. In July 2020, a father in the UK discovered his 11-year-old daughter had spent £4,642 on Roblox in a month. At first, he didn’t think it was a problem, as he assumed she was spending fake money.
On the one hand, if it’s easy enough for an 11-year-old to level his dad financially, then anyone can make easy money online, especially in the new world of cryptocurrencies, where banks and IRL money are taken out of the equation. On the other hand, it is dangerous that people who buy and trade online are not able to understand and fully follow the progress of their money. “There’s been a lot of democratization in terms of who can invest, like Robin-hood,” says Marie Shen, a Harvard graduate and investor specializing in NFTs. “More investors have come because a lot of these tools have been made easier to use. The principle of cryptography is to help people who do not have the financial infrastructure to be able to access the financial world: now you can send something of value around the world for a minimal fee and you can participate in decentralized loans. Suddenly, in parts of the world where you don’t traditionally have the infrastructure to support something as simple as getting a loan, you can actually get a loan anywhere with crypto.
Others are more cynical about the future of cryptocurrency. Nester Alvarez is an 18-year-old college student who followed El Salvador’s groundbreaking decision earlier this year to become the first country in the world to make bitcoin legal tender. A native of Santa Tecla, El Salvador, Alvarez worries that the country, and especially its young people, aren’t educated enough about crypto and digital currency to make informed choices — and the country itself lacks resources. “Most people won’t really know how to use it and we have to remember that there is a large part of El Salvador that is not used to digital wallets or banks,” says Alvarez, who is now based in the United States. “When I went to El Salvador (in February), most places didn’t even accept debit cards, so I can’t imagine how we’ll be able to pay for things with crypto.”
“The premise of crypto is to help people who don’t have the financial infrastructure to be able to access the financial world: now you can send something of value around the world for minimal fees and you can participate in decentralized lending” – Marie Shen
Like Silicon Valley on DMT, Bitcoin Beach is a surf village in El Salvador that has gone all-crypto, where farmers and fishermen use bitcoin to do business. But not all locals agree with the idea. “Everyone needs to understand the reality of El Salvador,” says Mateo, 20, of La Libertad. “This bitcoin move seems like a move to increase popularity around the world. Yes, Bitcoin Beach does exist, but it caters primarily to tourists, not locals, which makes it even more obvious that this is a tourism publicity stunt. Young people will be interested as long as they are properly educated.
“Young people who approve of using bitcoin are more enthusiastic,” says Hen, another Salvadoran in her twenties, “but they don’t really understand how it works. They approve because it’s ‘modern.’ , but do not really understand the possible consequences of instability.”
More than ever, digital currency is driven by the hype of not missing out, the exclusivity and unique appeal of crypto-art, and the rapid thrill of gambling spending. Investors will get younger and younger, moving from from market to market through easy-to-use apps and scouting for new investment opportunities, like a race with friends. “People will buy Supreme pencils. It has to do with collectibles and short media,” says Thom Webb, a game developer and hacker who once appeared as a magician on America’s Got Talent.
“Where I used to collect Pokemon, (people now buy) in-game items on fortnitesays Webb. It’s only a matter of time until the gaming industry and social media come together to support augmented reality NFT filters, and the Roblox model of in-game money explodes into new possibilities. line. Whether the realities of places like Bitcoin Beach match utopian fantasies of the future is up for debate. What this new market universe shows, however, is that money is undergoing revolutionary changes and this particular genius is totally, and forever, out of the bottle.