Minecraft: Bridging the Generational Gap or “Okay Boomer, It’s time to discuss the Economy”
“The more things change, the more they stay the same”, the intent of this well known quote was
to indicate that the more things change, the more the status quo tries to cement its position.
Changes in the physical and digital world cause a tremendous amount of turbulence and it
makes some moments in history quite unrecognizable. It more than often cause older
generations to claim they have nothing in common with newer generations. In actuality, there is
a tool to bridge the gap, and it’s not a typical history book. The tool is attached to your TV,
through an XBox, and that tool is Minecraft. Minecraft is a history book gateway tool which
simply show that the more things change, the more they stay the same.
Video games have been around long enough that they can be seen as a generational gateway,
linking past and present. My first video game was Pong; it was bought for myself and my
cousins by our grandfather from the local auction house. As kids, we were all fascinated by it.
It was a game changer for family events... We played competitively, fought, and focused on two
paddles bouncing a digital ball on an old fashioned black & white TV set. It didn’t take long for
us kids to be yelled at, by our grandfather, who bought the game — “can’t you find anything else
to do besides playing that stupid video game”.
As I watch my son play video games today, I am fascinated by the behaviors you see in the
video game world. I am not so sure the behaviors are that different from when I was a kid —
except for one: There is a real world underground economy emerging from video games. I
came across this economic nuance from the latest birthday party my son attended. Kids would
rather receive gift cards to buy token’s in their video games than receive a physical gift,
surprisingly. I am stunned to learn there is whole economy within an economy in video games
— when did this happen and what do you buy with a token? — skins, shields, and biome
changes. Guess what else? They are unregulated, uncontrolled, and untaxed. No, it is not
Libertarian Disneyland; the place is called Minecraft.
Miners in Minecraft operate a gameplayer named “Steve” to collect tokens, build structures, and
mine resources. As I watched the Minecraft economy work, I started to see links between
digital world and physical world. In an old world economy, mining was death-defying work and
was an instrumental part of the global economy. The work is still death defying but it seems to
have less importance to our economy nowadays. In fact, in our climate-changing world debate
physical world mining, particularly coal mining, which had became a perceived pariah in society.
In the digital world, “Steve” the miner is a heroic icon. Just one of many juxtapositions we have
between digital world and physical world. Interestingly, I wonder how many connect the dots
that Steve the digital miner needs the power, most likely from a gas plant or coal plant, to power
the game. Today one miner is a hero, and the other is a pariah.
Coal and rock mining, started and had its pinnacle, during the Industrial Revolution. At one
point in society, coal miners and hard miners were heros. They were the cornerstone of the
economy. Just like Steve, they took their pickaxe to work and helped build societies. In both
societies, mining was essentially the backbone of the economy. In both worlds, the more you
mined, the more money you made — the more the world mined the more the world grew.
Interestingly, miners in the Industrial Revolution and Steve both mine for resources and then are
paid in the form of tokens. Steve the digital miner takes his pickaxe to work, collects his form of
tokens instantaneously and can spend tokens instantaneously.
However, tokens developed during the Industrial Revolution had a much greater checkered
past. The coal miner’s path to pay was not nearly as instantaneous, fair or transparent.
Often in the old-world economy, coal miners would have to wait for their cash — sometimes up
to two months! Could you imagine a gamer today waiting two months to collect an achievement
reward? Interestingly in the late 1800’s, coal miners had the option (albeit nearly forced or
coerced) to accept tokens instead of cash. The tokens were called scrip and coal miners could
collect scrip and exchange it for cash later. In many cases, each coal mine company would
create their token to issue to the miners as a form of pay. The miners would then take the token
to the company store and purchase goods they needed for their families. You can read more
about it here.
https://www.coincollectorguide.com/scrip-coal-company-tokens/
Throughout the late 1800’s and up until the 1950’s, networks and economic ecosystems were
created through the use of scrip. Scrip would take various forms, most common types of scrip
were paper or tokens made of physical types of metal — gold, silver, copper, and / or nickel
were used in the tokens. As scrip became common, it would become part of everyday life
throughout many places in the world. Mining communities in the USA, Canada, Great Britain,
Germany, India, and South America all had types of scrips or chits. Eventually, lending started,
and lenders would have an internal paper-based ledger to track who owed / or lent money for
goods and services. The use of scrip became so common during the Great Depression that the
US government would issue scrip as payments. Interestingly, this sounds like how
cryptocurrency works today.
As much as scrip was a convenient way to provide speed and liquidity for payments, it faced
real problems in the secondary market. Scrip holders almost always had to trade their scrip at a
discount for the initial value in payment they received. It is the secondary market where the
problems with the use of scrip emerged. The person receiving the scrip in the 2nd, 3rd, and 4th
transaction, etc. could almost never be certain they could receive back the same face value of
initial payment. When looking at the basis of scrip, it was simply a promise to pay against an
earned value. Holding scrip then could be considered stored value, except the initial value or
stored value rarely held up. Over time, abuse and cheating would occur with the use of scrip.
The forms of cheating and abuse came from multiple nefarious activities perhaps the most
common was price-manipulation from mining company stores. Given the level of cheating and
manipulation, by the end of the 1950’s scrip was pretty much outlawed as a form of legal
payment. Sitting on the backdrop of broken down scrip payment process, workers of the world
were commanding to unite and force better conditions / pay. That world seems barely
recognizable today.
I wonder what coal miners at the peak of the industrial revolution would think of Minecraft
“Steve”. I am sure there would be lots of cross generational battles; “put away that video game
and I will show what is real work” might be the first battle cry. Steve might respond with, “at
least I get paid immediately and I would rather get paid than work hard and not get paid at all”.
Sides would be drawn. Probably a generational story which would be mirrored in many
households.
We are on the cusp of the 4th Industrial Revolution where data and digital are going to be
supercharged. We are already seeing the start of new payment systems with crytpo tokens are
exciting, new, and creating huge wealth. At some point coal miners happily accepted scrip
tokens as payment, until miners found out once they had it, it was difficult to use, manipulated
and it eventually started to lose value. Today, players in Minecraft happily collect tokens.
Cryptocurrency holders are going to work hard and pay with their tokens. If Minecraft is the
gateway to connect the past and the future, then we can use it to see links between future
crypto users and Old World miners. If this is true, then I have many questions.
What will happen to value of tokens in closed networks? How do you make sure stored value
holds over time? How do holders of tokens make sure the promise that was made by token
issuers are met? As much as physical and digital world has changed, many of the behaviors
still remain the same. Perhaps my grandfather, who bought us Pong, might answer my
questions for me. He might say, the answer is in the golden rule — those with the gold make
the rules. If my opening quote is true and the status quo is looking to cement its position, then
perhaps the best cement is gold.
If you look back to some of the reasons why scrip failed and why crypto tokens might fail
today... It was in the difficulty of tying a physical value like gold to the token. Scrip issuers at
first tried to tie physical metal to the tokens and that eventually became logistically impossible.
Right now, digital crypto tokens hold no physical value. Given the history of how payment
systems were manipulated and failed, I would contend that unless digital tokens are able to tie a
physical asset to it then history’s more famous quote will apply: “those who don’t learn from
history are doomed to repeat it”. Unfortunately for Steve, just like his coal miner brethren,
tokens will become worthless.
For tokens to be successful, some old patterns will need to be broken and this holiday season,
you can start. Instead of jumping into family debates around who is better, Democrats or
Republicans or waiting for someone to say all you do is waste time playing video games,
change the dialogue - “I am not wasting time, I am working — just like my forefathers, I work for
scrip, do you want to play?”.