Boondoggle of the Year: Cryptocurrency – The New Republic
When I was a teenager, I started playing a popular computer game called EverQuest. It was a multiplayer fantasy game where players could create dwarvish knights, elvish wizards, and other genre-appropriate characters and go on adventures. After completing a quest or slaying a monster, you would be rewarded with armor, weapons, or other goods. Most players used these items to advance in the game. Others sold or traded them for what they needed as part of EverQuest’s vibrant internal economy.
Though it was not initially designed with this goal, some EverQuest players could skip most of the quests and adventures by buying fully equipped characters, specific items, or in-game currencies with real-world money. By some estimates, more than 400,000 people, mostly in China, currently work as “gold farmers”—players who repetitively complete in-game tasks to gather in-game currencies solely so they can sell them to other players. In 2002, when it was near its peak in popularity, one economist claimed that EverQuest’s gross domestic product per capita would rank as the seventy-seventh largest in the world, somewhere between Russia’s and Bulgaria’s at the time.
I think about EverQuest whenever I read about cryptocurrencies, or crypto for short. (My condolences to fans of cryptography and cryptids.) Crypto, like EverQuest’s platinum coins, is generally understood to be a form of digital currency. It emerged over the past decade and went mainstream over the last few years. Crypto is both not a real thing and, somehow, a very real thing. Last November, the crypto market was valued at more than $3 trillion, quadrupling its estimated value the previous year. It appeared to be on the cusp of going mainstream—there were stadium naming deals, high-profile celebrity endorsements, and even a string of Super Bowl ads. Financial advisers began asking whether people should include crypto in their 401(k)s. Pension funds made investments in it.