Wolf Game, the name of the game, uses some known financial principles, but in a digital world yet to be known. Players can buy sheep from the game’s creator, identified only as “the shepherd,” and lend them to “the stable”—essentially, a warehouse—to earn interest. Payments are in $wool, the digital currency that can be used as a form of payment anywhere on the Ethereum blockchain, on which the game is built. To retrieve a sheep from the barn, players must pay a 20% tax in $wool to those who have purchased digital images of cartoon wolves.
When the creator of Wolf Game discovered that the game was vulnerable to hackers and temporarily suspended it to fix its code, gamers had almost no one to turn to. They just had to wait, hoping the game would come back on and they could get their belongings back. This scared some participants, who got out as fast as they could as soon as the game was up and running again. However, others, including Friedman, continued to play.
“Getting in there when he seemed a bit damaged and had an uncertain reputation turned out to be very smart,” Friedman opined. In essence, by buying when the market was down, Friedman had tripled his investment to $60,000, through January.
The strong volatility
Despite its volatile and sometimes inscrutable nature, the trading, use and ownership of cryptocurrencies is becoming more widespread: El Salvador recently began to accept the Bitcoin As a legal tender, the Federal Reserve is looking into issuing its own digital currency and wealth managers are encouraging their clients to explore crypto assets.
There are so few reliable measures of value that it is difficult to know if the excitement over a particular cryptocurrency is warranted or if there is a bubble about to burst. Traditional financial analysis is of no use here. In the case of digital currencies, value can only be granted with conviction.
So what can a new investor do? One way to cut corners is to choose a currency or token that has been created to serve a certain purpose: for example, an alternative to a traditional currency, such as bitcoin, or, say, a way to transfer money to parts of the world where Basic banking services are hard to find. It is believed that no matter how its value fluctuates, there will be a reason to use it, so it can be a good investment.
Source: Ambito
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