If you started buying crypto in late 2021, as I did, all your investments are probably a lot cheaper right about now. My only bright spot in the world of crypto is Splinterlands. This is a free monster card game on the blockchain, powered by a token called Splintershards (SPS +0.00%). I say it's "free," and it is, but boy oh boy, you really want to invest $10 in this game and purchase the Summoner's Spellbook.
At the time, I didn't know I was making an investment. I was playing a really cool game, and it was a lot of fun. And I kept running into monsters that I'd never seen before, and they were killing me. (I say "monsters," but you might fight a human or two, like a random pirate or evil doctor -- it's sort of like the cantina in Star Wars). Anyway, in early 2020, I paid $10, and that opened up the whole game.
Image source: Splinterlands.
A fun game became a moneymaker
It's important to buy the Summoner's Spellbook because that's when you start winning cards that you then own outright. And what's super-cool is that these NFT (non-fungible token) cards are like comic books or baseball cards -- they become rarer and rarer over time, thus increasing in value. In fact, because of the dynamics of gameplay, cards are destroyed all the time. The upshot is that the remaining cards can and will dramatically increase in value.
After playing Splinterlands for over a year, by July 2021, I had accumulated a lot of monster cards. And they were valued at $2,000 on third-party sites where people could buy, sell, or rent the cards. I was super-happy because my cost basis was only $10. You can read all about this experience in my article "The Future of Gaming."
I was excited because I saw a major trend forming. We gamers had gone from putting coins in video games in the 20th century to playing games for free on our iPhones. And now, we are at the beginning of a new shift -- to playing free games on the blockchain and earning NFT assets that appreciate in value. Making money by playing video games? That's an amazing shift.
Over the next few months, Splinterlands really started to soar in popularity. More and more crypto enthusiasts were playing the game. I continued to win monster cards. And by September, my collection was worth $12,000. By Halloween, my cards were worth $17,000, or the price of a used BMW.
That's when Dr. Blight came, with his evil inflation
Why were the cards skyrocketing in value? Because of the influx of new players, increasing demand, and shrinking supply. In January, I wrote, "Splinterlands has more than 300,000 daily users." All those players fighting battles and winning cards and uniting cards to make our monsters more powerful (thus shrinking the number of those cards in circulation) had caused a huge price spike in valuation.
Anyway, it was time to release a new pack of monsters. Since its inception, Splinterlands has released several runs of new playing cards. The first version was the Alpha cards. Then Beta cards (which were the same monsters as the Alpha cards, just better-looking). Then, there were Promo cards and Reward cards. Then, they released an Untamed monster deck, which was super-cool. And then a Dice monster deck.
So, the number and variety of monsters kept increasing. New decks increase the overall supply of monster cards and, thus (as any monster economist would tell you), are inflationary.
In January, the game had 10 million weekly visitors. This coincided with the release of a major new deck, Chaos Legion, which even got a cool video introduction (no relation whatsoever to actual gameplay). Players were super-excited about a new monster release. But Splinterlands also wanted to have enough cards in circulation so that newbies could play, too.
Flooding the game with new monster cards is kind of like the Federal Reserve flooding the country with cash. With a rapid increase in the number and types of playing cards came a rapid decrease in valuations of individual cards.
Now in May, my cards are worth about $7,000. Curse you, Dr. Blight!
CRYPTO: SPS
Key Data Points
When your cost basis is $10, it's all good
This is why you might want to introduce your kids to Splinterlands. (And why you might want to play yourself!) One, it's a great introduction to inflation and deflation, and you can have conversations about that. Two, it's a super-helpful introduction to the crypto universe. I have learned so much about the mechanics of the crypto universe from playing Splinterlands that it's not even funny.
The main reason, however, is that this fun and exciting game costs very little in cash. It's free if you don't want your kids to make any money. And it's $10 if you do. I strongly suggest you fork over the $10. Let me put it this way: I've recently added Splinterlands to my stock portfolio so I can track the darn thing. It's a card strategy game, so it might not be everyone's cup of tea. On the other hand, if your 10-year-old has a knack for this game, it might pay for their college tuition in 2030.
