Play To Earn Nightmare

The problems with "play to earn" and the environment of its inception are what today's post is about. If you're in crypto just to make money, or if you're blinded by the NFT hype to the point that you're not able to rationally weigh their pros and cons, this post isn't for you.

I'm still your average crypto brother though, so rest assured that I still believe in cryptocurrencies' huge disruptive potential. But I've also said many times that blockchain technology and cryptographic money on their own will solve none of our problems, be it the centralization of wealth and power, the growing gap between rich and poor or the failing of our western democracies. Bitcoin saw the light of day in the dark times following the 2008 world financial crisis; it was a reaction to the centralized power of banks and governments who gambled away our collective wealth, and then made us pay for the damages.

So what happened? Banks invented a new financial instrument called a "mortgage backed security" that could be traded or collected, and was essentially a bundle of thousands of individual mortgages. And for a while these bonds were seen as very stable, mainly because of the general reluctance of banks to issue mortgages due to the inherent risk of lending thousands of dollars to an individual that they'll pay back over the course of decades. But these bonds were also particularly profitable for the banks who issued both the mortgages and the bonds. Because there are thousands of mortgages bundled in any single bond, it was relatively easy to cover up a few bad mortgages and get a triple-A rating on them, and that's besides the fact that the rating agencies also had a greed-induced incentive to rate the bonds as high as possible. So the incentives were as follows: banks wanted to issue more mortgages, in order to be able to issue more lucrative mortgage-backed securities, which saw the birth of the NINJA (No Income, No Job, No Assets) mortgages issued to individuals who couldn't reasonably be expected to repay the loan. This house of cards came tumbling down when too many people defaulted on their mortgages, and the rest is history, although it should also be mentioned, in case anyone forgot, that the institutions that caused this whole mess, banks, rating agencies and speculators, got bailed out by government decree because they were deemed "too big to fail," meaning that the whole economy would melt down if they were allowed to go bankrupt.

It was a failure of greed, active fraud and willful blindness at all levels of power, but mainly greed. Not the kind of greed seen in movies where some megalomaniac wishes to "rule the world," but the kind of greed that underpins our overarching real world economic system. That system's called capitalism, and I don't really care if you wish to call it corporatism or cronyism; it's all the same. You see, it's not a coincidence that in our world the most powerful positions are filled with individuals who are able to set their emotions aside and go for the sale, go for the kill no matter the consequences. In a system that for its continuation depends on all individual agents to maximize their own profits, there are to "win-win" deals; someone always loses something somewhere sometime. Perpetual growth, that is perpetual profits, are a pipe-dream in a finite world, and we're destroying that world, cannibalizing each other, by foolishly hanging on to that pipe-dream. I've said it many times before:

"Roughly 4% to as high as 12% of CEOs exhibit psychopathic traits, according to some expert estimates, many times more than the 1% rate found in the general population and more in line with the 15% rate found in prisons."
_{source: Forbes - Dec 9, 2019}

And there are studies showing that 1 in 5 business leaders may have psychopathic tendencies. Many wildly celebrated characteristics in business environments, like courage and risk-taking, often coexist with psychopathic tendencies, which is why this commonly known fact is sometimes classified as potentially good. But I disagree with that assessment and encourage everyone to think about what this says about our economic system. In my book a system in which the most callous and empathy-lacking individuals come floating on top is just wrong. And since these individuals become the role-models for anyone aspiring to material success, these behavioral traits trickle down. Maybe I'm just too old, but I've seen it happen in my lifetime; society has become a much colder place, a collection of individuals fighting for themselves instead of a community with at least some shared goals and dreams. This should make us all stop and think; was it the concentration of power, or was the cause of the 2008 financial crisis, and all crises before that, a behavioral trait that's been incentivized, cultivated by the economic system according to which we all organize our lifes?

This is why blockchain technology and cryptocurrencies aren't the silver bullet so many of their proponents wish them to be. It could even become hyper-capitalism, a world in which literally everything and everyone is reduced to an asset to be traded, where every human interaction becomes a financial transaction. Even games are now under threat of becoming yet another avenue of extracting time and money from players by games-publishers and creators. Bah. We're translating everything into economic terms these days. You can do your part in saving the environment by consuming products with the right label. Factories can trade emission rights. Want to combat (wage) slavery in the Third World? Just buy a Fair Trade labeled product. Buy free range products to stick it to the food industry... It's all fake, as fake as the meritocracy that says that Elon Musk is worth more than half the American population combined.

Let's look at Axie Infinity, an NFT-based online video game developed by Vietnamese studio Sky Mavis, which uses Ethereum-based cryptocurrencies, Axie Infinity Shards (AXS) and Smooth Love Potion (SLP). If you play your cards right - it's literally a card-combat game like Splinterlands and Yu-Gi-Oh - you can earn money in this game. I've never played it and don't have the tokens, but this makes me wonder: do players still play for fun? Or do they play to earn? I hope the introduction about the 2008 meltdown and capitalism are enough to make clear that this comes with a whole different set os biases and incentives. The game has received some very positive press because workers in the global south are making a living playing the blockchain game Axie Infinity, and that's good, and in line with crypto's stated goal of banking the unbanked. But the barrier of entry for the game, you need to buy the tokens first after all, has sparked the birth of so called "whale scholarships." You can apply for a scholarship, and if you're accepted you can play with tokens supplied by the whale. However, that whale controls the wallet and players will receive only half of what they earn in the game. Now, how is this any different than an infant online oligarchy? From whalescholars.com: "Our mission is to help you earn while playing Axie Infinity!" But when you open the link to apply we soon read: "When you are hired as a Scholar, we want to keep you in our community for as long as it benefits you!" HIRED.

If cryptocurrencies are ever to become mainstream and this is the model of where we'll end up, we've failed to make any meaningful difference. Crypto's credibility is already under huge pressure because 90 percent of startups are nothing more than a get rich quick scheme, a rug-pull or ponzi-scheme. If this experiment is to succeed, we'll need to steer away from the profit incentive as the be all and end all, and refocus on what's good for all of us, not just what's good for some of us. Capitalism translated one-on-one into the cryptoverse can only end in a nightmare, one we'll reach much sooner than it took from 1913 to 2008 for the centralized FIAT money system to break the world economy, and one that will have far more profound consequences because we'll have tokenized everything, including our identities...

Thanks so much for visiting my blog and reading my posts dear reader, I appreciate that a lot :-) If you like my content, please consider leaving a comment, upvote or resteem. I'll be back here tomorrow and sincerely hope you'll join me. Until then, stay safe, stay healthy!