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New kids on the blockchain
Illustration Callum Abbott

Cryptomania: where is financial gameification headed?

From Bitcoin Beaches in El Salvador to a Reddit thread outbidding Wall Street, the gamification of money might open new doors for marginalised communities – but the dangers are dank

Taken from the autumn 2021 issue of Dazed. You can buy a copy of our latest issue here

Once upon a time, declaring an interest in trading on the stock market was a sure fire way to expose yourself as, well, a bit of a square. But over the past year, the rise of bitcoin and other cryptocurrencies like Ethereum, Dogecoin and Polygon have spilled from the dark web on 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 seems like a game. What does it mean that investment is no longer just for boomers, bone daddys, and neckbeards, though? Could the online investment game really mark a dangerous point of no return?

“The last year has seen a number of events that have turned a new generation on to thinking about money and investments,” says Guy Cocker, a crypto and tech journalist. Many Gen-Z kids, he says, were switched on to the possibilities of trading over lockdown, as in January of this year, when a group of amateur traders on Reddit took on Wall Street and started buying up stock from the video game store GameStop, spiking its share price from $18 at the start of 2021 to $500. According to data published by F&C Investment Trust in May, almost a  fifth of Gen-Z investors have joined digital markets over the past year, 9 per cent after GameStop. During the insanity, 62 per cent of investors aged 18-24 bought stocks tipped on Reddit. In March, UK regulator the Financial Conduct Authority reported that a younger, more diverse group of consumers is taking more and more risks  financially, encouraged by easy-to- use apps and messaging “that often appeals to the ‘fear of missing out’”.

Fomo, it turns out, can really pay. “There have been long periods of furlough which have made people investigate how to make their money work harder,” says Cocker. “Combine all of this and you have young people not just aware of new asset classes such as crypto and NFTs, but who know how to make canny investments to make money.”

But it’s not just social media that is getting in on the digital green. One of this year’s most popular games, Roblox, taught kids to trade in-game digital currency with each other. In Roblox, you style your virtual avatar by buying and selling accessories and body parts using ‘robux’, the game’s currency. After the game caught fire during lockdown, attracting millions of teenagers, it was slammed for encouraging pre-teens to get evil with their money. In July 2020, a dad in the UK found out that his 11-year-old daughter had spent £4,642 on Roblox over the course of a month. At  first he didn’t think it was a problem, because he assumed she was spending fake cash.

On one hand, if it’s easy enough for an 11-year-old to level their dad financially, then anyone can make easy money online, especially in the new world of cryptocurrencies, where banks and IRL cash are taken out of the equation. On the other, it’s dangerous if people buying and trading online aren’t able to fully understand and track how their money is moving. “There’s been a lot of democratisation in terms of who gets to invest, e.g. Robin-hood,” says Marie Shen, a Harvard graduate and investor specialising in NFTs. “More investors have been coming in because a lot of these tools have been made easier to use. 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 can participate in decentralised lending. Suddenly, in regions of the world where you don’t traditionally have the infrastructure to support something as simple as just 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 student who has been following El Salvador’s groundbreaking decision earlier this year to become the first country in the world to make bitcoin legal tender. Originally from Santa Tecla, El Salvador, Alvarez is worried that the country, and especially its young people, aren’t sufficiently educated on crypto and digi-money to make informed choices – and the country itself is under-resourced. “Most of the people won’t really know how to use it and we have to remember there’s a big part of El Salvador that is not used to digital wallets or banks,” says Alvarez, who is now based in the US. “When I went to El Salvador (in February), most places didn’t even accept debit cards, so I can’t imagine how we will be able to pay for stuff 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 can participate in decentralised lending” – Marie Shen

Like Silicon Valley on DMT, Bitcoin Beach is a surfing village in El Salvador that has gone full crypto, where farmers and shermen use bitcoin to do business. But not all locals are on board with the idea. “Everyone needs to understand the reality of El Salvador,” says Mateo, 20, from La Libertad. “This bitcoin move seems like a stunt to raise popularity around the world. Yes, Bitcoin Beach exists, but it’s mostly aimed at 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 educated properly.”

“Younger people who approve of the use of bitcoin are more enthusiastic,” says Hen, another Salvadorean in her mid-20s, “but they don’t really understand how it works. They approve because it’s ‘modern’, but don’t really grasp the possible consequences of it being unstable.”

More than ever, digital currency is being driven by the hype of not missing out, the exclusivity and one-off appeal of crypto-art and the quick fire thrill of game-spending. Investors will get younger and younger, swiping between markets via easy-to-use apps, and scouting for new investment opps, race-your-mates style. “People will buy Supreme pencils. It’s to do with collectibles and short-form 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 Pokémon, (people now are buying) in-game items on Fortnite,” says Webb. It’s only a matter of time until the gaming industry and social media come together to back augmented reality NFT filters, and the Roblox model of in-game money explodes new possibilities online. Whether the realities of places like Bitcoin Beach match up to the utopian fantasies of the future is open to debate. What this new market universe does show, though, is that money is going through revolutionary change, and that this particular genie is totally, and forever, out of the bottle.