KEN THOUGHTS 01
A previous article by Yana examined the problems in the P2E concept and how it spoils the gaming experience. Many NFT games within the P2E genre really do suck as games, but what’s more painful are the financial losses.
Most of the time, the losses incurred by players are not entirely the game’s fault. A quote in the last movie I saw says “It’s not the plane, it’s the pilot.” As intelligent beings, our fates are really mostly upon us. And we have to be vigilant especially when money is involved.
Here are my thoughts on how we can better manage risks and mitigate our losses when it comes to playing NFT games and investing in general.
1. Study now, invest later
“Never invest in something that you don’t understand.”
I’ve heard this so many times before from many different mouths, but a quick search led me to a quote from Warren Buffet back in 1991. Many people have not kept this tip in mind when it comes to investing. We, more often than not, let our impulse take the best of us and decide on a whim when getting into a new venture. Hype and excitement are like thieves. Wait. No, not really. Because we give them our money in broad daylight with open arms.
Now. Shall we let our logical mind take the wheel and let our emotional heart take the backseat? Not really. I believe that logic and emotions are equally important. I still believe that the mind should take the wheel, but the heart should be in the passenger seat so the two can have continuous conversations. Sometimes we also have to listen to our gut instinct. A perfect balance of both.
We must be bold enough to take calculated risks and be resilient enough to accept inevitable losses. Most, even the most notable, NFT games are at their lowest now. But in its glorious days, many people have experienced inspiring success stories. And they wouldn’t succeed if they didn’t take that risk.
Yes, we can let hype and our emotions pique our curiosity, but we shall be careful about where we put our hard earned money. If we don’t study now, we’ll pay the price sooner rather than later.
2. Beware of fake news
“If it sounds too good to be true, then it probably is.”
I’ve always found stories of scams cringey, especially if the money stolen is hard earned. Sometimes, people blame the victims, pointing out how the deceit was obvious. But, at least once in our lives, haven’t we all fallen to false promises?
An old Filipino saying (pardon my translation) says “No one would deceive if no one is dumb enough to be deceived.” As painful as this ‘victim blaming’ sounds, we can’t deny that there’s some truth to this. If only more people knew the fundamental truth that high return comes with high risk, and that any promise of high return with low risk is indeed too good to be true, then fewer people would fall victim into scams.
Patience is a virtue. This is a cliché, but many people still needs to be reminded of this. Some of our greatest regrets are borne out of our impatience. We choose to believe the highly impossible promises of get-rich-quick schemes because we can’t wait to get rich. Sadly, our impatience will only make us poorer.
Whenever you’re offered with something with a lot of red flags, go beyond skeptic. Just look away.
3. Sometimes it’s not me, it’s you
While some people fall into scams, ironically, some people are wary of legitimate things. Technology adoption is one of those things that make people think twice.
Being skeptic about a new, unknown technology is perfectly normal. It’s human instinct to be afraid of treading uncharted waters. Cryptocurrency and NFT are relatively new technologies. Similar to how a game’s developer build testers ‘break’ the game at its alpha stage before it gets released into the public, the innovators and early adopters in the crypto space will test it and suffer its early failures, but will reap the most rewards when the majority adopts it and it becomes mainstream.
Just because some people lost money in crypto and NFT doesn’t imply they’re scams. Sometimes they’re just misunderstood. There’s that real risk of failure and some are just bound to fail.
And sometimes, the problem is not with the crypto or NFT we invested and lost in, but… with us. Especially when we don’t study and we let ourselves be deceived. Wait, did we just recap the first two items? Anyhow, moving on:
4. Work hard, play hard
The technology behind cryptocurrency and NFTs (blockchain, decentralized finance, etc.) can be hard to fathom. But one universal language has made the concept easy to understand for people of any background — that is, video games. When the P2E (Play to Earn) genre and NFT gaming rose to prominence last year, Filipinos were quick to learn the tools of the trade and many have thrived and flourished in this shiny new arena.
But not even the most established NFT games have been spared by the volatility in the crypto space. Many people, myself included, have yet to recover their initial investments in the NFT games they started playing last year.
That is the reason why NFT gaming cannot truly replace the stability provided by employment or skills-based freelance gigs. At least for now. And that is one area of concern in the ‘P2E’ concept. In most cases, we’re still not in that level where we can completely rely on playing to put food on the table. Especially if its foundation is something as volatile as cryptocurrency.
What’s worse is because most of these games are primarily designed for earning and not really playing, at times when it’s not profitable, nobody would want to play it. And that’s when, how, and why many ill-conceived NFT games go into a death spiral.
That is why our company prefers the ‘Play to Enjoy’ concept wherein an enjoyable gameplay is the priority and earning is just part of a comprehensive reward system (see page 20 of DRDC Mag Issue 001, May 2022 Edition) from the time you spent enjoying the game in the first place.
Playing to earn is not an impossibility, but may not be sustainable. But playing to enjoy while earning, with an excellent game coupled with viable economy, is something very realistic. And we will strive to make that happen.
But wait. Before venturing into something as risky as these, make sure you have a stable source of income and healthy cashflow. ICYDK, a healthy cashflow means your cash inflow (income) is greater than the cash outflow (expenses). Pay the bills before you play the games.
5. Before you enter, find the exit
Some people would do anything to invest in crypto and NFT because of the hype created by the many people who benefitted from it. Some even resort to acquiring debt. And that’s a double-edged sword. There’s that risk of failure in your investment and the obligation to pay your debt. So do not spend and invest money that you do not have. Especially in a risky venture, invest only the amount that you can afford to lose.
I hope that people would put forth an equal amount of effort in entering the crypto and NFT space as with exiting it. What some people don’t realize is that exiting is actually the exciting part. Isn’t spending actual money the point of all our investing? The financial freedom, the comfort, the good deeds, and the love we can express with money. It’s not really about money itself, but the happiness and independence that it can bring. Always remember that.
If you get up to this point, I greatly appreciate it. Sometimes, my mind flies. And before my train of thought gets derailed, I’ll park here for now. I hope you learned something.
This is the first entry in our monthly Ken Thoughts blog series. In here, we pick the brain of our Content Creator, Ken, for his personal insights on various topics he deems relevant for our community. Stay tuned for more food for thought in the next installment of Ken Thoughts!