Cryptomania: where is financial gamification headed?

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From the Fall 2021 issue of Dazed. You can purchase a copy of our latest issue here

Once upon a time, declaring an interest in stock exchange trading was a sure-fire way to expose yourself as, well, a bit 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 it mean that investing is no longer just for baby boomers, to bones daddys and neckbeards? Could online investing really mark a dangerous point of no return?

“The past year has seen a number of events that have brought a new generation to think about money and investing,” said Guy Cocker, crypto and tech journalist. Many Gen Z kids, he says, have been won over by the possibilities of lock-free trading, as in January of this year, when a group of amateur traders on Reddit took to Wall Street and started trading. buy stock from the GameStop video game store. , raising its share price from $ 18 in early 2021 to $ 500. According to data released by F&C Investment Trust in May, nearly a fifth of Gen Z investors have joined digital markets in the past year, 9% after GameStop. During the madness, 62% of investors between the ages of 18 and 24 bought shares on Reddit. In March, the UK regulator, the Financial Conduct Authority, reported that a younger and more diverse group of consumers were increasingly taking financial risk, encouraged by easy-to-use apps and messages “that make often appeal to the “fear of missing” “.

It turns out that Fomo can really pay. “There were long periods of leave that made people look for ways to make their money work harder,” says Cocker. “Combine all of that and you have young people who are not only up to date with 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 is embarking on the digital shift. One of this year’s most popular games, Roblox, taught kids how to exchange digital currencies with each other in the game. In Roblox, you style your virtual avatar by buying and selling accessories and body parts by using ‘robux’, the currency of the game. After the game caught fire during the lockdown, attracting millions of teens, it has come under fire for encouraging tweens to get mean with their money. In July 2020, a father in the UK discovered that his 11-year-old daughter had spent £ 4,642 on Roblox in the course of 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 is easy enough for an 11 year old to bring his dad up to speed financially, then anyone can make money easily online, especially in the new world of cryptocurrencies. , where banks and IRL cash are excluded from the equation. On the other hand, it is dangerous if people who buy and trade online are not able to fully understand and track how their money is flowing. “There has been a lot of democratization in terms of who invests, for example Robin-hood,” says Marie Shen, a Harvard graduate and investor specializing in NFTs. “More and more investors have come in because a lot of these tools have become 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 participate in decentralized loans. Suddenly, in parts of the world where you traditionally don’t 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 student who followed El Salvador’s groundbreaking decision earlier this year to become the first country in the world to make bitcoin legal tender. Hailing from Santa Tecla, El Salvador, Alvarez fears the country, and especially its young people, may not be educated enough about crypto and digi-currency to make informed choices – and the country itself is lacking in resources. “Most people won’t really know how to use it and we have to remember that much of El Salvador 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 stuff with crypto.”

“The principle 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 participate in decentralized loans. “- Marie Shen

Like Silicon Valley on DMT, Bitcoin Beach is a surf village in El Salvador that has gone all-crypto, where farmers and shermen 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 movement appears to be a coup to increase popularity around the world. Yes, Bitcoin Beach does exist, but it is primarily aimed at tourists, not locals, which makes it even more obvious that this is a tourist 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 Salvadoran in her mid-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 its instability.

More than ever, digital currency is driven by the hype not to miss, the exclusivity and unique appeal of crypto-art, and the rapid thrill of gambling spending. Investors will get younger and younger, passing from one market to another via easy-to-use applications and in search of new investment opportunities, like a race with friends. “People will buy Supreme pencils. These are collectibles and abbreviated media, ”explains Thom Webb, game developer and hacker who has already appeared as a magician on America has talent.

“Where I used to collect Pokémon, (people are now buying) 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 in-game money Roblox model explodes with new possibilities in line. Whether the realities of places like Bitcoin Beach correspond to the utopian fantasies of the future is open to debate. What this new market universe shows, however, is that money is undergoing a revolutionary change and this particular genius is totally, and forever, out of the bottle.

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