Thoughts on Cryptocurrencies and Games

Clockwork Labs
10 min readJun 27, 2022

Game Design Blog — June 27, 2022

Note: I’m going to try to keep this as brief as possible.

A lot of players have recently joined our community who are interested in cryptocurrencies, so I thought I would write this blog post as a reference for new players who would like to know what our thoughts are on cryptocurrencies and games.

First I’d like to talk briefly about the game’s name since I think the “bit” in BitCraft causes people to assume it’s a cryptocurrency or NFT project. I chose the name BitCraft as a working name that never ended up getting replaced. I just needed to be able to name the folder where the code would live. The idea was that “Bit” is a computer science word and “Craft” is in there because, well, I knew there would be crafting.[1] No one ever came up with a particularly satisfying replacement, so it just stuck!

At times we’ve considered changing the name, since it predates the lore we’ve developed, and we may eventually decide to do that, but at the end of the day it *is* pretty memorable. Ultimately, I am of the philosophy that what matters is creating a good game, not what it’s called.

That being said, I’d like to let the community know our opinion on cryptocurrencies/NFTs and their relationship to games and game design. There’s been a huge amount of confusion, speculation, discussion, and hand wringing in the industry over the past year or so on this topic. We’ve managed to successfully avoid it so far, but my cofounder and I are distributed systems engineers who understand very deeply what this technology can and can’t do, so it could be interesting for us to shed some light.

What is a cryptocurrency?

A cryptocurrency is at its core basically just an ordinary spreadsheet. The only meaningful difference is that it’s a spreadsheet which can only be modified according to a predetermined set of rules. All the crazy cryptography and distributed systems engineering is just there to enforce those rules, so for our purposes the rules might as well be enforced by magic.[2]
For example, in the case of Bitcoin, the spreadsheet looks (approximately) like this:

You can’t just edit the spreadsheet though, you have to follow the rules. Alice can’t just change the number in her row willy-nilly:

  • She can’t, for example, just change her number to be 80.0.
  • She can’t change or decrease anyone else’s number of Bitcoins.
  • However, she can “transfer” Bitcoin by decreasing her own row by 5 and increasing Bob’s by 5
  • and so on…[3]

NFT’s are the same thing. Many of you probably know this at this point, but NFT stands for “non-fungible token”. Non-fungible just means “unique” and token just means “a number”. So an NFT spreadsheet would look like this:[4]

Given that cryptocurrencies and NFTs are both just magical spreadsheets, I’m going to just use the term “cryptocurrency” to mean both things for the rest of the article.


Okay, so we’ve established that cryptocurrencies are just spreadsheets, and spreadsheets are perhaps the most boring thing to have ever been invented.[5] So a reasonable question to ask is why do so many people care?

The answer, I think, is pretty simple: fear of missing out (aka FOMO). FOMO has more to do with how people work, than with how cryptocurrency works. It’s a very very powerful force, and I think it’s one of the most powerful drivers of human behavior.

Almost all cryptocurrency or NFT projects design the rules of their spreadsheet so that there are only so many numbers to give out and the earlier you get your name on it, the more you can write down next to your name. At first, maybe no one cares, but if enough people become aware of the spreadsheet, something very interesting happens:

  1. Space starts running out on the spreadsheet
  2. People start offering money to buy other people’s space on the spreadsheet
  3. Some people make a lot of money selling their space on the spreadsheet
  4. People panic thinking that unless they buy space right now, they’re going to miss out on a chance to make a lot of money
  5. Fear spreads like a virus
  6. There’s a stampede to get on the spreadsheet

The most interesting thing about this process to me is how reliably it works. This phenomenon has been documented for quite a while. Warren Buffett has a great quote on the power of FOMO: “People start being interested in something because it’s going up [in value], not because they understand it or anything else. But the guy next door, who they know is dumber than they are, is getting rich and they aren’t, and their spouse is saying can’t you figure it out too? It is so contagious. So that’s a permanent part of the system.”

Here’s the thing about FOMO: powerful though it is, it really feels awful. Everyone involved can end up feeling terrible.

  • The people who are afraid of missing out feel terrible
  • The people who missed out feel terrible
  • Even the people who didn’t miss out feel terrible because they should have gotten more when they had the chance![6]

The higher the stakes, the more to be missed out on, the more terrible the feeling.

Cryptocurrency in Games

So why does everyone seem to think that NFTs and cryptocurrencies are related to games? I think the reason is that many games have always had a small element of FOMO. Consider collectible card games like Pokemon and Magic: The Gathering or game mechanics like randomized loot drops or rare single-run item events like party hats in Old School Runescape. These mechanics can be exciting for some players and to be fair a little bit of excitement is entertaining and fun. However, these examples are fun because they are just one small element of a much greater and more complex game. They’re not the whole game. Designing your game around FOMO as a core component is a bit like playing with fire. Designing your game around cryptocurrency, because of its direct connection to real money, is a bit like using gasoline to get that fire started. You’ve got to be very careful because FOMO is driven by a cascade of fear, rather than fun and it’s been my general understanding that games are supposed to be fun.

It should be noted that we’re not blameless on the use of FOMO ourselves! At this very moment our website says that you will get a “secret limited item” if you sign up for the Pre-Alpha, so I don’t want to come off as moralizing or holier-than-thou. However, I do think it really matters how high the stakes are. It’s an entirely different ask to ask someone to invest hundreds of dollars into an NFT vs signing up for a Pre-Alpha. A player putting in their email address stands to gain less and lose a lot less.

It should also be noted that players are not the only ones susceptible to FOMO! Why is it that game companies have almost uniformly and simultaneously decided to launch NFT games or cryptocurrency features against the wishes of their community? It’s because they’re also susceptible to FOMO.

In August of 2021, the crypto collectibles game Axie Infinity made $364,000,000 in revenue. I have relatively deep connections in the game industry and let me tell you that got the attention of every game developer I know, both huge conglomerates and small startups. The interest was 0% motivated by wanting to make a better game and 100% motivated by FOMO. By now the wave of fear has largely subsided and a lot of companies have stopped or slowed pursuing it, but rest assured it will be back.

We started developing the game back in 2018 after the ICO craze and we’ve seen many developers add cryptocurrency features into their games, so we have a few case studies to understand what can happen to game communities that employ the use of FOMO to drive players to their community. It goes pretty much like this every time.

  1. Developer states that they’re going to sell crypto assets to fund development of a game
  2. Developer releases exclusive crypto in-game assets (land, cloths, creatures, energy, whatever)
  3. Crypto speculators buy up all of the in-game assets hoping to make money on them
  4. Crypto speculators aren’t interested in playing the game, because they prefer speculating
  5. Gamers are not interested in playing the game, and can’t afford to buy the in-game resources even if they were
  6. The game has no players
  7. Crypto speculators encourage the game developers to make more speculative assets, rather than make the game better

This is a common enough pattern that I have a name for it: the Crypto Blackhole. It’s very enticing to go into the blackhole because you make money on the way down, but once you’re in the blackhole you’ve effectively deadlocked your game’s community and there’s no coming back out.[7]

I think my biggest problem with how game developers have been using cryptocurrency in games is that there’s a kind of disingenuous aspect to it. The most successful and popular use case for cryptocurrency is as a tool for speculation. The thing is that speculation is fundamentally a kind of game. Why not try to make a better or more fun speculation game, rather than trying to have money infiltrate all types of games?

I don’t think there will be much progress on this front until developers are asking “How can cryptocurrency make my game more fun, if at all?” rather than “How can I add cryptocurrency into my game?”


What does this all mean for BitCraft? Not a whole lot. Our decisions are not based on how much money other game companies are making right now, or how high the price of Bitcoin is. Our only goal is to make BitCraft the most fun and long lasting game we can. We are here to make a living game that lasts for 20 years. That is what will ultimately determine if we are successful.

I can promise you that we’re not going to do anything that won’t help us reach that goal, and we’re open to anything that will help us reach that goal.

I actually don’t personally have a problem with using any technology that would help us achieve it. Fun is not about technology, it’s about game design and how players feel. My issue with cryptocurrency, I suppose, is not with cryptocurrency itself (energy usage notwithstanding), it’s that it’s used almost exclusively for high stakes FOMO. Using FOMO to drive players to our game or to bid up the prices on our hypothetical NFTs makes everything about money, rather than building a good game. It *doesn’t* increase the longevity of our game. It *doesn’t* make our community any healthier. And it *doesn’t* make the game more fun. In fact, so far in the places it’s been tried it has basically done the opposite in the long-term. For those reasons, we’re currently of the opinion that adding cryptocurrency to BitCraft isn’t going to help us towards our goal.

That being said, let me add the following caveat. BitCraft is a fundamentally free-market and economics heavy game. It’s in no small part inspired by my time playing Runescape flipping rune plate armor in Varrock in 2007. The whole objective of the gameplay in BitCraft is to rebuild civilization with other players. It involves buying, transporting, and selling in-game commodities. That involves free-trade and all the complex game and social mechanics that come along with that, including speculation. I think speculation in moderation can be fun, as long as everyone is honest about what it is we’re doing: playing a fun game. The keyword in my opinion is moderation. Feeling excitement and suspense is fun. Feeling fear that you’re going to lose your house or your financial future is not.

We made a conscious decision in 2018 to pursue the venture capital route to fund the development of BitCraft so that we could avoid all of these issues.[8] This approach comes with its own tradeoffs, but it also means that we don’t need to crowdfund or sell NFTs to fund the development of BitCraft in any way. In the end, I think it will result in a much healthier community and game.

— Tyler (3Blave, Cofounder of Clockwork Labs)

[1] As a side note, arguably cryptocurrencies shouldn’t have a monopoly on the word “bit” (or “crypto” for that matter which used to mean cryptography), but c’est la vie.

[2] And the wasting of a truly grotesque amount of energy.

[3] Bitcoin “mining” really just means that you’ve been randomly (weighted by how much energy you’ve wasted IRL) chosen to be allowed to add 25 to your row without anyone else complaining.

[4] Incidentally, this is true of how data is stored in basically every application, including your favorite MMOs as well. Rest in peace, Edgar F. Codd.

[5] I’d like to formally apologize to the accountants out there. Spreadsheets are not boring! I’m trying to connect with my audience though.

[6] Not to mention the people who made a lot of money are happy to brag and be generally insufferable about it, let’s be real.

[7] It’s been pretty good for eliminating our competition though.

[8] Miss me with those NFTeez nuts.