A history of cryptocurrency, from gaming tokens to a $2tn market

A history of cryptocurrency, from gaming tokens to a $2tn market

Facebook’s decision, last month, to rebrand itself as Meta is actually quite retro. The metaverse might look like a cutting-edge concept, with people creating digital versions of themselves to interact with other avatars in a virtual world, but this is a nearly 20-year-old idea, only slightly updated.

The origins of digital assets — such as bitcoin and ether, non-fungible tokens, smart contracts and the thousands of “shitcoins” out there — can be traced back to video games where avatars played and sometimes worked, acting out fantasy lives imagined by their human creators.

It may seem unlikely today, when cryptocurrency markets are worth more than $2tn, that their ancestry lies in World of Warcraft and Second Life, the once-popular virtual-reality games. In the early 2000s, former child actor Brock Pierce, a US presidential candidate in 2020, realised that gamers were happy to buy tokens to reach the next level instead of completing tasks to earn them.

“Just because something is not tangible, it doesn’t mean it’s worthless,” Pierce says, recounting how he employed hundreds of people in China and South Korea to play video games and earn the in-game tokens, which he then sold to lazier customers in the west.

Together with William Quigley, now