My Problem With Cryptocurrency: There’s No Room for 1
This is one of my main guidelines when designing mechanics for a game: Whatever underlying system you have, there should be some meaning to the lowest number. It doesn’t mean that you should be able to see a ‘1’ in text, in front of you, during the game, but there should be a meaning to that increment/decrement. Because, going from a 1 to a 2 might be too drastic a change in your system as that’s a 100% difference. But there should be a 3 and 4, or even just 99 and a 100. Because, if there isn’t, you’re probably just inflating numbers to make it look better and haven’t examined your systems deeply enough. And so, while I hate the way Souls-like games do it, the fact that E is lowest rank and the highest is A or S, or that the best upgrade you can get is a +10, makes every little uptick meaningful.
It started to bug me when I played Warcraft III originally. In I & II, characters had double digit HP, some big or hero characters had triple digits. But the upgrades you could make, for weapons or armor for example, were 12 to 13 or something like that. That was a meaningful upgrade. If your knights did 1 more damage per hit, they could take down an enemy in 3 strikes instead of 4 and that really upped your attack group’s survivability as well. Then, in Warcraft III, everyone started having HP in the tens and hundreds of thousands, everyone was hitting for thousands of damage. And for what? It worked basically the same except there were higher numbers. In Starcraft, if you could let that SCV repair a fraction of a second more or let that Zealot’s shield recharge a fraction of a second more, you got a few more hull or shield points and that was important.
I think it’s also the reason why I tend to get bored quickly and stay away from idle games: at the start you have to click ferociously to get one more point but then you upgrade a bit and the numbers grow so big you can’t even refer to them as real numbers anymore. The journey from 1 to 100 is massive. Even from 1,000 to 10,000 is meaningful. But when you’re at 420E39 and you want to get to 69E40, it doesn’t feel like much of a difference.
What does it have to do with Cryptocurrency? The detachment from any real-world value of currency.
The point of any currency is to replace the bartering system with something that we can all agree conveys value in an equal system. Which is also why I prefer the Big Mac Index to anything else when comparing the economy of two countries. If I toss you an exchange rate, it won’t really stick in your mind whether it uses Shekels, Pounds, Francs, Yen, or Rubels. But if you know a Big Mac costs you ~4 USD and I tell you it costs me slightly under 20 NIS, you’ve got a better comparison of what things cost in Israel and how strong the dollar is compared to the Shekel.
But what can you buy with one BTC or one ETH? I don’t know. And if you knew yesterday, you’re probably wrong today. You might be able to buy a Big Mac in New Mexico for 0.005 BTC (I don’t really know how much it is) one day but it’ll cost you 0.007 in Istanbul the next day. Because it fluctuates so much, because it has gone so far, it lost 1 in the mirror a long time ago. Because Cryptocurrency is no longer real currency (if it ever was to begin with), it’s a speculative financial product at its best and Pyramid Scam/Pipe Dream at its worst.
And then, you need to factor in “Gas” prices.
When you make a cryptocurrency transaction, it’s not just cash money changing hands. One computer (and usually a computer farm) needs to accept this transaction (and there’s usually a small bidding war for it), then use its power, its electricity cost, its runtime, its pollution, its wear and tear, to process the transaction, write it, and propagate it. And the people who do it want to be compensated for their role in it. At time of writing, this price was fluctuating between 2-5$ depending on where you were checking on which currency. I couldn’t find confirmation but I remember that at one time it was 200$. Meaning, that is the added cost for each time you want to transfer cryptocurrency. So, if you want to make a 1$ transaction, you’re actually paying 6 times as much for the privilege, another few dollars just gone. Then, why would you make a transaction lower than, say, a hundred dollars, where the gas price is worth the amount your sending?
Which is exactly where we lose the meaning of 1 and where we get away from something that is usable by everyone. If you can’t buy a loaf of bread or a dozen eggs with it, it’s not usable by everyone. It’s not currency anymore, it’s detached from real world value, it’s a speculative tool for the rich and/or stupid. And since it’s not tangible, not even an abstract representation of value (like a stock that gives you partial ownership of something), it’s useless in the real world.
And NFTs are built on the same concept, just one level more abstract (and ridiculous). While there are established places where you can convert your cryptocurrency into real money and vice versa (and the transaction is probably always in the changer’s favor), for an NFT to be valuable, you have to convince someone else to pay you for it. And since it’s a just a reciept that points to a URL online that you can access freely anyway, what does it really matter that you “own” it? That is why you get stories like these of people selling themselves their own NFTs to drive up the prices. By the way, It’s called a “wash trading scam”, and it was very prevalent in stock trading until it was outlawed.
That’s it. Rant over. But if you want to know more, I highly recommend this video by Folding Ideas. It is long (over 2 hours) but he goes in very deep on Cryptocurrency and NFTs and it’s the best explanation of the whole thing that I’ve seen so far.
Over here is a shorter video (only 30 minutes) by Christopher Natsuume that explains my all of this is bad for the gaming sphere and why any game that builds NFTs into its scheme is just going to be a bad game that hurts its players.
And I want to add another thing after the rant on NFTs in video games: No company in their right mind will want to allow you to take something they made, their intellectual property, and do with it what you want in another company’s game without benefitting from it. So, if they want to keep it in-house, they have their own servers, their own code, they don’t need NFTs. We’ve seen it done before. And if two companies would like to participate in a scheme like this for a specific reason… something like, I don’t know… cross-promotion, then that is also something that is already being done (Fall Guys and Shovel Knight are the biggest examples that come to mind) and doesn’t need NFTs.
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