Is bitcoin and cryptocurrency addiction real?
Yes, absolutely, but characterising it as some exotic techno-addiction means missing the big picture.
A hospital in Scotland that specialises in treating addictions, Castle Craig, has launched a new program aimed at helping addicted cryptocurrency traders.
According to Castle Craig therapist Chris Burn, the addiction can be seen as a subset of gambling.
"It is a form of gambling [and] people gamble on all kinds of things which makes cryptocurrency trading exciting. Compulsive gamblers like it – it’s mysterious, not really regulated and you can make huge gains – and huge losses – in a single day," he said to news.com.au.
But is it real?
It's almost certainly as real as any other gambling addiction. In some ways, it might be even more insidious because it has that history of people amassing huge fortunes from cryptocurrency. After all, one doesn't see a Lamborghini and assume the driver managed to utterly slay at the pokies.
It still has plenty of parallels though, especially the "staring at screens" element, as Burn notes.
"I think it's an escape from reality. People like the excitement and that you can do it 24 hours a day and watch the screen and watch making a profit – or not – and that goes on and on. That's what a compulsive gambler wants... People don’t realise if you spend 14 hours or so a day on a computer doing this sort of thing it has really negative consequences on other aspects of your life."
But overall, it still can't match the economic damage inflicted by pokies.
Rough estimates reckon Australians spent about $4 billion on cryptocurrency in 2017 and ended up losing about half to the early 2018 crypto market crash. They got to keep their crypto though. This isn't remotely close to pokie machines, which pull about $11 billion a year from Australians' pockets and only give back 10-15%.
It might bear a closer resemblance to mobile gaming addiction. The mobile gaming industry is estimated to pull in somewhere north of $10 billion a year, with 50% of that coming from just 0.15% of "problem gambler" players.
A similar imbalance is seen in casinos. Not only do they make most of their money from problem gamblers, but they actively court the most deeply addicted gamblers to exploit them to the fullest extent possible. That is they would if it was legal to do so, but it's not, so they don't. Nudge nudge wink wink.
Cryptocurrency has tended to straddle categories, variously being an appreciating asset, a tradeable commodity, a volatile currency, a utility and everything else. In doing so, it has highlighted how similar these things can all be when you get right down to it.
It might be highlighting pathological addiction in the same way, blurring the seemingly-separate lines between video game addiction, traditional gambling addiction and mobile gaming addiction. In the end, they all tickle the same reward mechanisms, so it's unusual that they're all considered such separate and different disorders.
But what does that have to do with South Korea?
Quite recently, authorities in South Korea imposed a video game curfew on minors in an effort to combat the apparent problem of video game addiction in the country. Gambling is essentially banned in Korea, though, and has been for a long time. As such, the notion of gambling addiction isn't really a mainstay.
It has its own cryptocurrency disease though, which therapists have been seeing for a while now. It's called "Bitcoin Blues" and it's considered to be more of a depressive condition than a gambling problem.
The symptoms are similar though, revolving around compulsive behaviour and spending more than one can afford to lose. Much like gambling addictions, the end game of "Bitcoin Blues" is often marital strife and family breakdown.
The twist is that it's best viewed through the lens of economic troubles. South Korea is outwardly an economically thriving country, but on the inside, it's faced with severe income inequality, a massive housing crisis and chronic underemployment among young people. South Korea's Bitcoin Blues are seen as another symptom of the same problems that turned South Korea into the reigning world champion of alcoholism and suicide.
What's the point?
A clearer picture comes when you consider the income distribution of problem gamblers. Broadly speaking, the lower one's household income, the more likely one is to be a problem gambler.
But the clearest example, and closest equivalent to cryptocurrencies, might be state lotteries in the USA with their widely publicised instant-millionaire winners and giant cheques. This type of gambling in particular is overwhelmingly more popular among the younger and poorer demographics.
If there is a point, other than that it's all quite interesting, it might be that it's disingenuous and counterproductive to characterise cryptocurrency gambling as some kind of new problem. Mobile gaming addiction, casino gambling, China's wild stock market gambling problem, lotteries and so on and so forth, are all extraordinarily similar. They just happen to be framed in different ways against different cultural backgrounds.
The same thing is some kind of national economic problem, a personal weakness or an intrinsic human fallibility – or a fun pastime or an important and serious part of the national economy for serious and important people in expensive suits to talk about on television. It all depends on the situation.
Cryptocurrency gambling addiction is nothing new, and as cryptocurrency adoption grows, it will be increasingly common. Shining a light on the problem is a good thing, and a continued spotlight might go a long way to preventing people from getting sucked into it the way they might with other financial instruments. But anyone who frames it as some kind of exotic technological malaise is completely missing the forest for the trees.
Cryptocurrency is widely regarded as gambling, but all investing is gambling. Here's a kid whose dad pissed away the family house on the well-regulated stock market even after most casinos would have been legally obligated to turn him away.
The best thing to do going forward might be to make sure it continues to be regarded as gambling, even as it gets increasingly regulated and increasingly legitimate, and eventually becomes just one more financial instrument among many.
Just remember to gamble responsibly.
Disclosure: At the time of writing, the author holds ETH, IOTA, ICX, VEN, XLM, BTC and NANO.