Even with the critical slant of applies to the gameplay of these “games” this article still ultimately neglects to describe the biggest problem with the “play to earn” aspect, which is that it fundamentally doesn’t work.
The article describes the notional highs and lows of these tokens, but overlooks the fact that trading volume is far more important than a hypothetical trade price.
If one person buys one of these utterly useless tokens for 10 cents, that sets the price at 10 cents. But if I then try to cash out a thousand dollars of that same token, I’m probably not going to get a thousand dollars, because that requires there to be someone on the other side of great trade who thinks its actually worth putting a thousand dollars into this otherwise useless token.
To make matters worse, crypto prices are generally set by crypto trades. What I mean by that is that the person who bought one token for ten cents, actually didn’t. They traded fifty BLOB tokens, notionally worth ten cents. What can you do with BLOB tokens? Nothing, they’re worthless, they were made for a game that doesn’t even exist anymore. The guy who owned those fifty BLOB tokens got them by trading a bunch of POOP tokens for them. Those are from a DAO that has since collapsed, they’re worthless too. He bought those POOP tokens with a fraction of a DOGE coin, which he got from selling an airdropped Bad Monkey NFT that he was lucky enough to get one time (and even luckier to sell before the rug pull).
See the problem? It’s all people trading Monopoly dollars for Game of Life dollars and arguing over the exchange rate. At no point did a real US dollar enter this process. So when you try to sell your BLOB tokens for real US dollars, no one is buying. The notion that people in developing nations will make a lining playing these games is a complete fantasy.
At the end of every exchange, someone has to be left “holding the bag”. There’s no end state that doesn’t end up screwing over someone else so you can cash out.
While trading in general is zero sum, if you believe the product you’re trading has intrinsic value, then no one needs to be holding a bag.
If I sell you a car and you get to use the car, you wouldn’t be holding the bag, because you wanted the car. This applies to stocks, and stock derivatives, as well as commodities.
The problem arises when there isn’t an intrinsic value (or the intrinsic value is very small), such as with NFTs or many cryptos in general.
There are cryptos that have some intrinsic value like monero, since they have fungibility and a use case, but most do not.
The big problem is that it trivially easy to make new tokens, and give them the appearance of a market with fake liquidity. I know people think Smart Contracts are a real innovation, but 99.999999% of the time they are just used to make more crappy tokens.
Crypto advocates say it’s security comes from the network effect of all the nodes working on extending the blockchain, but that security is of little value if it enables scams on higher layers.
Yup. Smart contracts aren’t even contracts, and they certainly aren’t smart.
An algorithm is, by its nature, dumb. It does the thing it’s programmed to do, without any hesitation. It doesn’t stop to consider the situation or ask relevant questions. This is a terrible idea for a system that facilitates trades, because all someone has to do, to use the example you cited, is wash trade a newly minted token back and forth a few times to set a price, and then find a smart contract that’s happy to spew out some amount of a token you want, at the price you just set, like a busted slot machine.
The only way these “play to earn” games can work is as a pyramid scheme. Everybody wants more money out of the pot than they’re putting in, and the company sure as hell isn’t going to run at a loss. Many of them seem to only deal with currency through their own exchange (for fiat currency directly) or through markets backed by coins that are also backed by fiat currency, like bitcoin, for exactly the reasons that you laid out. Can’t make money if everybody is buying your funny money with other funny money that lost 99% of its value 3 months after it appeared.
The only other way somebody could make this work is if the players are the product, but at that point, why wouldn’t you just sell ad space on a website.
This is very well said.
I think what people imagine will happen, if they’re thinking about the economic conundrum at all, is something rather like the Warframe economy. Players with real dollars to spare buy platinum (the premium currency), which they then either use to buy things directly from DE, or trade to other players in return for loot those players want to sell. Effectively, players flush with time grind on behalf of players flush with dollars. If there was a way to convert platinum back into dollars, it could be imagined that a player in a country with a weak currency might make a living from selling rare mods and prime parts.
In practice the reason this doesn’t work is because DE would lose a huge amount of their income if players could cash out platinum. Any dollars put into the system for the purpose of buying things from other players would then leave the system when those players cash out. So there’s no incentive for DE to do this. There’s also the problem that you need to make a game that is actually worth putting real dollars into, and these crypto games are universally dogshit (ideal time to plug Jauwn’s YouTube channel, his crypto game reviews are hilarious and really highlight what utter trash the entire field is). So no one has any incentive to buy the tokens that the play-to-earn players are trying to sell. That’s a big part of why the price always instantly crashes.
The only way to make cashing out work is to have players directly sell their tokens to other players, instead of the money coming out of the developer, but that means now the players are competing with the developer on price. Whatever price the dev sells the token for becomes the ceiling. And if course, every token sold by a player basically steals income from the developer. If the dev instead gives the token out for playing the game, then there’s no mechanism at all for the dev to make any money from the token, other than issuing large amounts to themselves and ultimately crashing the price by cashing out. None of these options work, and the model these games actually go with basically guarantees rug pulls as the only actual way for the developers to make any money.
At no point did a real US dollar enter this process.
Yes, but something something fiat currency.
Pixel Tap, another popular tap game, outright prevents you from progressing past level three unless you invite at least one friend - and by the time the airdrop rolled around, level three wasn’t enough to be eligible for any tokens. But for every friend you did invite, you got 5% of the in-game currency they earned, and 1% of anything players they invited made, essentially creating something indicative of a virtual pyramid scheme, or MLM (multi-level marketing), that eventually paid out crypto tokens to those at the top. The Pixel Tap crypto reached a high of $0.0977 shortly after it launched, but at time of writing is now worth $0.006405, less than a tenth of that peak.
Virtual pyramid schemes for monopoly money, lovely.
The problem is the monopoly money is being used in a confidence game that’s being permitted by governments because all they see are more potentially taxable transactions and don’t give a shit about what this means for the longterm health of our societies.
Does anyone remember the TreeLoot.com MoneyTree? It existed from 1998-2004 and looked like this:
I’m all in favor of going back to the old internet, but… not this.
How did that work (or not) exactly? What was the goal
You clicked the tree somewhere and it would tell you either to try again, or you would win something. I think most people who won got $5 and a monkey plush toy. I’m not sure anyone ever won the jackpot. You could just click over and over again trying to remember where you had previously clicked, like a treasure hunt. Meanwhile they’re showing banner ads on the page.
It worked using the
ismapattribute on the image which tells the browser to add the x,y coordinates of the user’s click to the link when fetching the result.I still have two stuffed monkeys I “won” from that site, from when I was young and stupid and didn’t realize I was probably paying for them with my personal data.
Oh wow. That takes me back. I remember doing it, but I also remember it being way too slow and annoying to do it for more than maybe 15 minutes.
Therapist: Cursed chibi AI Elon isn’t real. Cursed chibi AI Elon can’t hurt you.
Cryptobros: …
That fucking site’s cookie banner can suck my rectum. Not even going to bother.
Why do they have one at all if they’re going to blatantly not comply
fuck notcoin that piece of shit legitimised all these other grifts. now they all are selling boosters with other cryptos with no sign of actual launch. crypto is cancer.
Really, crypto’s existence legitimized grifting.
Which is a shame but not that surprising
crypto is cancer.
odysee is actually a crypto video sharing website that uses it for videos and their currency it has some far right problems tho
crypto is cancer.
I respectfully disagree. There are legitimate use cases do make sense. Of course, these don’t make tech bros rich quick so you don’t often hear about them.
One of them that I like the idea of is NanoGPT. It’s a frontend to various AI services where you pay per request instead of making accounts for each and pay with Nano. I haven’t used it yet, but the currency makes a lot of sense there, as it is feeless and requests can cost less than a cent.
Another one is Monero for goods and services that might be illicit under one’s jurisdiction. I don’t want to go into the discussion whether this is right or wrong; all I want to say is that laws can be nonsensical and dangerous.
NanoGPT? What’s special about it? Is mining the nano coin used to create the AIs responses or is it just a crypto skin on top. If the latter we can self host AI.
But beyond that many dislike crypto for gas cost and same for AI so strapping them together is way less palatable.
It’s just used as a means of payment for very small amounts, even less than a single cent if you calculate in dollars.
If the latter we can self host AI.
Sure you can; I certainly can’t, lacking the equipment, and the investment would be much higher than any return on it.
But beyond that many dislike crypto for gas cost and same for AI so strapping them together is way less palatable.
Nano, as I said, has no fees, and there’s no miners, it’s quite ecologically friendly. It does have other challenges (for example only being pseudonymous and fully traceable, plus fighting spam is an ongoing battle, no standard way of association a payment with an invoice). But I always liked its premise and it does make sense for such cases for me.
The beauty with how they implemented is that there’s no explicit about apart from a wallet address they create for you, saved in a cookie, so you can straight up use it.
I’m not trying to argue that this is somehow revolutionary or the right way to do it, but it manages to leverage the advantages quote well in my opinion.
So if I made a confident AI and hosted it on a website you could visit, you buy my tokens $5 for 5 tokens, responses priced at .01 tokens. Essentially its very cheap.
Would you be as likely to use this service?
I mean if it’s competitive, why not?
The thing is it’s unlikely you’d find a payment provider making this viable. For example, PayPal charges 49 US cents as a minimum fee, or 39 Eurocents. Even just credit card companies charge 5 cents fixed, so cheap payment processors will charge you about 10 cents per transaction plus variable rates and possibly a monthly fee.
True but these companies are gate keeper that also work with fiet to crypto so its just moving the issue. If I want to convert my British pounds I will be charged even if I sent it physically. How do you buy nano coin?
It’s true that you need to factor in the conversion fees. The same however is true, maybe for a smaller fee, when converting between fiat currencies, though my bank is usually pretty fair. Other providers - again PayPal being an offender and often ATM operators - will often have worse rates.
NanoGPT itself doesn’t sell crypto I think, they include sellers for convenience. I provided mine years ago on Kraken which is a market exchange.
For testing, I just transferred 0.1 XNO to them, which arrived basically instantly without fees, it was credited to the wallet before I switched back windows to my browser.
I’ll try a prompt and get back here if you want? I mean this is not really the core of the discussion but for completion’s sake…
Edit: I created this with the Flux Pro model (the most expensive one I think) for about 0.1 XNO:
Nano is a scam. They mined all the coins up front, and then told the most gullible rubes in the universe that everyone else had to fill out CAPTCHAs too.
Nano wasn’t mined, it was all created at inception, and as you correctly said distributed via CAPTCHA; this was to disincentivize or stop people running bots to claim it automatically. After the distribution period ended, the Nano foundation burned undistributed coins minus an amount that they kept to ensure further development. This fund ran out in 2023 if I’m not mistaken. It’s now being developed by volunteers.
Do you know a better idea how such an initial airdrop would be done?
https://www.investopedia.com/terms/p/premining.asp
You are one of those suckers if you believe every distributed coin was solved by a CAPTCHA. The centralized(!) foundation pinky promises that they didn’t sock puppet ten times as many suckers at launch, and then keep a controlling share of stake permanently.
A better way to do the initial “airdrop” is to not do centralized issuance at all, because anyone would be a complete fool to trust any crypto foundation.
What would be a controlling share with Nano? The largest representatives according to voting weight were the exchanges last time I checked, which would imply most of the currency is in “circulation” as in no longer held by the foundation. And even then, voting weight doesn’t grant you an immediate advantage in Nano, as there’s no staking.
So I mean, while I can’t prove that the foundation held now coins than they claimed, I’m unaware that there was ever a sign of them actually doing so.
A better way to do the initial “airdrop” is to not do centralized issuance at all, because anyone would be a complete fool to trust any crypto foundation.
It has to come from somewhere, right? How would you fairly distribute coins that aren’t mined?
Anyhow, I’m not here to shill the coin, the ones I bought I bought off an exchange long after the original issuance and all I wanted to show was an example for a good technical solution. Not perfect mind you, just something of which I thought is a positive example where it’s just used as a means of payment.
What would be a controlling share with Nano?
51%
The largest representatives according to voting weight were the exchanges last time I checked
Which is irrelevant because holders can just choose different representatives.
So I mean, while I can’t prove that the foundation held more coins than they claimed, I’m unaware that there was ever a sign of them actually doing so.
The sign is them creating a design that expects this tremendous amount of trust. It’s extremely conspicuous to create a vulnerability that only the foundation can exploit, that can go undetected if they don’t make a huge mistake.
It has to come from somewhere, right? How would you fairly distribute coins that aren’t mined?
You can’t fairly distribute a premine. Don’t use coins with premines.
I’m glad you’re not here to shill Nano, but it is a scam and you are promoting it.
Can’t make it right for everyone… Some people will complain about mining and the energy consumption (Bitcoin is supposed to currently use about 850 kWh per transaction), others complain about a supposedly unfair premine. They didn’t even hold an ICO.
51%
That’s not currently a required percentage, you need 67% of votes to confirm a transaction. Which in turn means 33% are enough to stall the network. But even then, what would their gain be, apart from owning more of their own currency?
Which is irrelevant because holders can just choose different representatives.
You can, but then you can no longer vote. And if you can’t vote, holding Nano does nothing.
I don’t think there’s a cryptocurrency today that comes without downsides, be it high resource usage, lack of anonymity or others, if they’re not straight up money grabs and a copy paste of another random junk on ETH. Bitcoin is not an option for me because of the monster mining has become - I don’t blame Satoshi, this is something I didn’t expect either, but it’s insanity currently.
One day, I’ll make a technology classifier which will take a small description of what a product is doing and will classify it as scam and what type of scam it is. It would also say if the technology is already exists or is a minor derivative.
Then the world will know peace.
Kinda like that big infographic of logical fallacies. Honestly there seems to be a core set of like a dozen scams and everything from there is derivative more or less. Kinda love it when I hear of some actually clever way of stealing people’s money as opposed to just grift or obvious lies.
I bet you will need a crypto-backed ai startup for that project!
/s
Lol my boss asked me if I knew how to build an EXE. I did not. So I spent a few days figuring it out with Visual Code. I build an idle game as my first game within a weekend. Man…low hanging fruit lol
That’s impressive!
I struggled with making my idle games interesting.
My boss and I made a really fun fucked up story and it passed the time well
That horrendous AI Muskthing will haunt my dreams…
Much ai generate. Very wow
Nobody would ever pay you to play a game. There is no way there isn’t an alternative motive.
Well this is a huge bummer. I like idle games. They distract from anxiety. And I have a lot of anxiety.
Idk. I feel like I would like to upgrade Elon’s empathy.
I was just about to comment that it all makes sense now. Since Musk has no friends, he hasn’t unlocked empathy yet. Someone just needs to befriend the guy, somehow.
somehow
Worse case scenario… you get a horse.
Sometimes I day dream about what I’d say if I was elons friend. There are a lot of things.
ngl the third game art looks like a pokemon ripoff but the art is well made
As a shitty artist who dabbles in game dev, AI has helped dramatically with generating art assets that look professional
Oh but it looks self drawn tho
