This is an excerpt from my memoir, I Was Famous on the Internet — my honest story of 14 years of internet fame and what it really cost, and why I deleted it all to choose real life.
God’s Unchained and the Illusion of On-Chain Gaming
Let’s take a crypto game I played and was popular streaming on Twitch as an example of my own ignorance before discovering ICP. In the summer of 2022, after I was canceled and haters promised I would never get another sponsorship, a crypto game called Gods Unchained or GU reached out to me and offered me $200 to try playing their game on Twitch for an hour and upload the video to YouTube. When I initially played GU, it felt a lot like Magic: The Gathering Arena except there were way less players and cards cost way more. After playing once, I mostly forgot about the game and went back to my retro games and Warzone.
In October 2022, I noticed that GU had a lot of viewership on Twitch and not a lot of streamers. I saw my chance to get Twitch partner and went all in on the game. I bought $10,000+ worth of the GODS token and the GU NFTs which I used in game to rank up to the highest mythic division in just a few weeks. After almost two months of streaming Gods Unchained for hours every day and giving away almost a thousand dollars of the GODS token to viewers, I woke up in the middle of the night and realized the game was doomed. GU had peaked when the game first launched, and the price of the GODS token originally was high because the token was new and scarce. The more the price dumped, the fewer people were interested in the game.
While crypto games pushed “Play to Earn” as the future of gaming, I could see from the inside it was another lie. The public loved the idea of just playing a game and earning money. The truth was that there was a limited window, generally right when the game first released or the token price pumped, where playing the game was lucrative. Once more players got on and the price of the token plunged, the play to earn was worthless. Even worse, you generally had to spend a lot of money first to start earning which turned play to earn into another Ponzi scheme where those getting in early made everything and everyone else wasted their time and money.
The technical reality of a game like God’s Unchained is that the token itself is hosted on a layer two which means two different blockchains and at least four times the odds you could lose everything if there’s a problem. My experience was that the second layer-two blockchain felt centrally controlled, and the game itself was hosted on centralized servers, just like the majority of video games. Neither Ethereum as the layer one nor Immutable X as the layer 2 could do much more than sending token transactions and hosting text based NFTs that pointed to images hosted off chain. Elon Musk once joked on Joe Rogan’s show how worthless NFTs are because they are not actually hosted entirely on chain but most of crypto did not seem to get this key point from the richest man in the world.
To play GU, you needed to first sign up using your email address for an account. Once you signed up for an account, you needed to verify your email. Next, you had to have a certain crypto wallet installed using a browser extension. This already connected you to multiple centralized points of failure, where if your email got hacked, you could lose your account, or if your browser or your computer got hacked, you could lose all your crypto and your assets in the game. From there, you had to go to the website and connect the email account with the browser-extension crypto wallet. If you wanted to buy cards in the game, you needed to go to an NFT marketplace that was on another website. To transact there, you had to deposit crypto or pay huge fees buying with a credit card.
When you bought these NFTs on the marketplace and held them to use in the game or to speculate on the price going up, you had the illusion of real ownership for players which matched the GU marketing. Meanwhile, the game developers could change the NFTs anytime they wanted to, and they frequently did make changes that crashed the price or occassionally pumped the price of the cards. If you went to play the actual game with these NFTs and the crypto you bought, at the time you had to download the game onto your computer and then it was played through centralized servers, although today they do have a mobile app too. Finally, you had to match with somebody else and have a real game.
Does any of what I just described sound like a superior user experience to the ease of playing a game on your phone, tablet, console, or PC? The nightmare onboarding process offput most people who tried to get started. On top of the difficultly getting people to play, developing a crypto game like this more expensive than making a non-crypto game which meant that the team generally works only to survive with little thought of long term viability. From the outside, the crypto play to earn narratives and hype often looked attractive to naive crypto investors like me before discovering how ICP is different. Almost everyone, including me, who bought the GODS token lost substantial amounts of money. Meanwhile, the technology on ICP to make a crypto play to earn game a complete technical reality got almost zero coverage across crypto.
Crypto Exchange Fraud
When I really understood the basics of how technical backend works with crypto, I realized what a giant fraud so much of the industry appears to be. Almost all cryptos act as if they are these groundbreaking inventions, when in my experience, most of it is just a Ponzi scheme. The technology is mostly useless, with most transactions happening on some centralized third party’s website.
Here's a worse example than just a crypto game. If you are on a crypto exchange and I deposit my Bitcoin into the exchange, and then you go to buy Bitcoin from that same exchange, nothing actually happens on the Bitcoin blockchain. The only thing that happens on-chain is me sending my Bitcoin into an address controlled by the exchange. After that, the coin often just sits in the exchange’s wallet. While it sits there, the exchange allows it to be bought and sold repeatedly on their own internal system. Nothing else occurs on the blockchain itself unless someone tries to withdraw or the exchange moves it to another wallet.
In theory, this setup would not be a problem if the exchange were always honest. If I deposit crypto, sell it, and then you buy it, then theoretically the crypto is yours. The problem is that many exchanges have been caught being dishonest, and from what I’ve seen, I believe it is very likely that many of them continue to be dishonest today. The only difference is that they haven’t yet gone so far that they collapse completely.
Here’s how simple the fraud can be. Let’s say I deposit one Bitcoin onto an exchange and put up a sell order. The exchange now actually has one Bitcoin in its custody. Then you go to buy that Bitcoin and it appears in your account. If that was all that happened, everything would be fine. The problem is that instead of stopping there, some exchanges will then create another sell order for a second Bitcoin that does not even exist and sell it to someone else. They can do this because none of these trades are happening directly on the blockchain. The trades are only happening on the exchange’s website. The blockchain is not moving the Bitcoin each time, and there is almost no transparency about how much crypto an exchange truly has compared to how much their website claims they have. This has given exchanges, and now potentially ETFs, the ability to sell Bitcoin and other cryptos they don’t actually own.
While selling one extra Bitcoin might not be that bad, what if I put 1 Bitcoin onto an exchange, then you buy it, and nine other people also buy that same 1 Bitcoin. As long as no more than one person withdraws, the fraud goes undetected. The nine others are holding claims to fake Bitcoin that does not exist on the blockchain. Some of the ETFs and custodial accounts today don’t even allow self-custody withdrawals, which creates a perfect setup for fraud given the customers only have the choice to sell back to cash. For the exchanges and ETFs that do allow withdrawals, if too many people start a withdrawal at once, they simply announce that withdrawals are “suspended” and given an arbitrary excuse why. That triggers fear, encourages people to sell, and provides cover to keep manipulating the price.
This cycle allows exchanges and ETFs that are dishonest to stockpile Bitcoin or other cryptos at low prices, pay influencers and push narratives to get people hyped into buying at higher prices, then dump their holdings all at once to crash the market. What happens is people are essentially encouraged to buy fake Bitcoin and altcoins at high prices and then panic-sell at low prices. Exchanges that operate this way can make massive profits from selling crypto they don’t even have. The whole thing, from my perspective, can continue because of widespread ignorance from people that don’t do their own research, they don’t ask hard questions, and they’re only focused on making money. If you do care about the truth in crypto and want to talk with me in person, you can find a time on my calendar at jerrybanfield.com.
If you connect with how I live and think, you can follow the rest of my days on YouTube in my Money playlist.