🎮💰📲The Internet Turned Everyone Into A Blogger And Video Games Will Turn Everyone Into Investors
|Andrew Steinwold||May 3, 2020||8|
I know what you are thinking. “Andrew, you stole that blog title from Balaji’s tweet!” You are correct, but I am owning up to it and attributing him here. ⬇️
Semil @semilUm, this event is now closed. I did not expect 100+ to email me on such a mundane topic. I apologize in advance... there's no way I can have everyone at this specific event. https://t.co/kUYg0fTGbO
As you can see, I changed his statement a bit. I think that instead of crypto turning everyone into investors it will actually be video games. The truth is, it will likely be a combination of both crypto and video games and I’ll explain why.
Traditional investing has higher bar to entry when compared with video games. Also traditional investing is difficult to understand and is not fun.
The gaming industry has low barriers to entry. Unlike the financial industry, gaming has no overburdensome regulatory regimes and is fun. As a result, there are way more gamers than stock market investors.
NFTs (non-fungible tokens) will enable people to earn a living playing video games. Gamers will acquire NFT game assets and trade them with cryptocurrency and fiat currency.
Gamers will accidentally learn investment skills by playing fun NFT games that have a real financial impact.
Stock Market vs. Gaming
Investing in the stock is not extremely difficult but it is also not super easy, I would call it a medium level of difficulty. Despite this mid-level difficulty, only an estimated 55% of Americans own stocks. This number has been decreasing ever since the financial crisis of 2008.
This decrease in American stock ownership is likely related to the middle class having less money in general and an increased sentiment that the traditional financial system is rigged against those that are not in the 1%. On the contrary, video games do not hold any such negative connotation. In fact, most people love video games. There are an estimated 2.5 billion gamers worldwide, which is roughly 32% of the world's population! Although there are people who dislike specific video games, people rarely dislike the video game industry as a whole. Roughly 67% of the American population plays video games and, unlike stocks, that number is increasing every year.
Gaming As A Job?
People now have the ability to earn a living playing video games. Today, instead of earning money directly from games, most gamers make money through platforms like YouTube and Twitch. The small percentage of people that do earn money directly from video games employ one of two methods: gold farming or power-leveling. Gold farming is when people acquire in-game currency and then sell the currency for real money on websites like eBay. Power-leveling is when people create a new character in a video game, level them up to the highest possible level, and then sell the character. One could argue that because those two activities are dependent on third-party websites like eBay to work, even those “digitally native” jobs do not count as directly earning money from gaming.
Non-fungible tokens (NFTs) change this paradigm completely. Suddenly, games are able to connect their economic infrastructure to a blockchain like Ethereum, which is essentially a 24/7 financial system that is globally distributed and secure. Before this, game developers had to design their financial plumbing from the ground up, but now creating an economic infrastructure is as simple as connecting the game to a blockchain and setting the parameters. NFTs enable game developers to issue in-game assets, create their own in-game currency as a crypto token, and much more on a single platform. This is a massive step for virtual economies because gamers do not need to rely on any third-parties for earning money. NFT video game assets are internet-native commerce-enabled assets that can trade at any time. These assets are tradeable for cryptocurrency and that means that they can be converted into fiat currency.
By integrating uncensorable commerce and global financial rails (Ethereum) into games from the start, the possibilities explode for video game economies. This allows gamers anywhere in the world to earn money directly from an NFT game. To be clear, we are in the very early stages of this paradigm shift, but now that we have unlocked this ability there is no going back. I expect that the video game asset market and the number of people that earn a living playing video games will jointly skyrocket.
Fun Open Finance
Let’s face it, playing video games is way more fun than stock trading. Instead of reading a corporation's financial statements, people can get deeply involved in markets and trading by simply playing games that utilize NFTs. Even if users are playing a video game purely for fun, they will inevitably learn financials from the assets they acquire because they have real-world value. As games start to integrate NFTs, the availability of more advanced financial functions will increase due to ethereum’s DeFi (Decentralized Finance) applications. Instead of just acquiring gold in a regular video game, NFT gamers will be able to:
Redeem or trade in-game cryptocurrency for fiat currency.
Win money by placing crypto in a “no-loss lottery” like PoolTogether.
Game developers will figure out how to gamify many of these processes to make them more fun and engaging. As new DeFi protocols come online every day and more users get connected to the blockchain ecosystem through gaming, the financial opportunities are essentially endless. NFT video gamers will acquire a deep understanding of financial systems through the ease of access, a monetary incentive, and an overall fun experience.
Absurd and overbearing regulatory requirements do not apply when trading video game items. Video game asset trading doesn’t require passing a Series 7 exam (credential that allows certain people to trade specific securities) or require you to be an accredited investor (someone with either $1m net worth or someone who has earned $200,000 per year for the past two years, allowing them to invest in high-risk high-reward investments like startups).
Of course, such laws are meant to prevent people from getting scammed, but in reality, they make it more difficult for the average person to gain access to incredible investment opportunities. However, if the government allows anyone to gamble at a casino shouldn’t they allow anyone to invest in a startup? Not only is high net worth not an accurate indication of financial knowledge, but also the point stands that everyone should have access to various types of financial opportunities. NFT video games will provide these opportunities to people all over the world and do not (as of now, and hopefully never) have to worry about the regulatory burden of traditional finance.
Gamers = The New Investors
NFTs will enable gamers to become investors through fun, gamified processes where people can naturally and inadvertently learn about investing. Allowing people to earn a living in an entirely digital fashion will rapidly grow virtual economies and eventually turn everyone into investors.