Teaching Through Games - 21 Bitcoin Lessons

By Scott Lindberg

Take charge of your Bitcoin education because love it or hate it, Bitcoin is changing the world. If you’re looking for a guide to journey down the rabbit hole, this is where you start. This book accompanies HODL UP, a bitcoin mining game. All aspects of play introduce essential concepts.
“Learning through Games – 21 Bitcoin Lessons” also consolidates recommended resources making it a handy go-to reference, with or without the game. The book is STEM.ORG Reviewed.
Gameschooling requires no lectures. Just play. Games are a creative and fun way to boost learning for everyone, not just kids. Essential concepts are simplified to avoid overwhelming newbies. Tabletop games offer fellowship and a much-needed break from ever-present screen time temptations. HODL UP balances strategic decisions with luck so experienced Bitcoiners can enjoy the fun and fellowship too.

• Language: English
• Publisher: Lulu.com
• Release date: Mar 4, 2023
• ISBN: 9781312809253

Book preview

PART I – Game Play = Bitcoin Mechanics

This book is the resource I wish I had when I first went down the Bitcoin rabbit hole and wanted to share my excitement with my family. 

The framework is based on a game because I love playing games.  When thoughtfully designed, they are effective teaching tools.  Games rank higher on the education effectiveness pyramid than traditional methods because they combine social interaction with multiple sensory inputs.  They are more fun than lectures and less intimidating than formal classes.  And, of course, they offer the bonus of fellowship as an alternative to ever-present screen time temptations.

My advice is to jump around and follow what interests you, or what others ask about.  I don’t recommend you read straight through the book.  Instead of being top-down, e.g., in a classroom where an instructor sets the topics, this is bottoms-up, where people playing a game are exposed to topics to kindle their curiosity. It does not follow the traditional school format with stated objectives, step-by-step lectures, and knowledge questions to test students.

The first half of this book consists of lessons based on the play mechanics of the game HODL UP.  These rules are modeled on how Bitcoin works.  Each chapter links game components to fundamental topics and clarifies differences, e.g., what was simplified for gameplay. It is not required to know how to play before reading these lessons.  The material will be much easier to absorb, however, if you have played.

The second half of the book focuses on fundamental Bitcoin terminology.  These 100 keywords and phrases printed on playing cards do not impact play mechanics.  Recommended resources are also provided for deeper study.

The personal guide structure of this book is meant to keep things informal and low stress.  Just playing HODL UP increases your Bitcoin exposure and knowledge.  You decide for yourself how deep to go, and when to go deeper.

Here's what I mean by guide.  Picture yourself and your friends or family sitting down to play HODL UP.  You have a guest too.  This guest has extensive Bitcoin knowledge, so you casually ask questions as you play.  He shares the how’s (and why’s) of Bitcoin.  He also shares links to additional resources so players, at their own pace and initiative, can learn more about whatever aspect of Bitcoin is most interesting to them.

This book represents a friendly and imaginary guest, who answers questions.  So, stay curious.  Explore Bitcoin your way, at your pace, as deeply as you desire.  Have fun.

1.  Twenty-One Million

Why 42 tokens?

Using twenty-one million tokens is not practical for a tabletop game. We could have a smaller number, say 21 tokens, each representing one million bitcoin. However, this is challenging to build a game around because there are too few pieces. The amount of 500,000 bitcoin per token is a compromise to have enough for gameplay mechanics while maintaining the critical 21,000,000 total bitcoin.

This brings up the real question, why 21 million?

The number of game tokens in HODL UP is arbitrary, but the number of bitcoin is essential.  If you learn only one thing from this chapter, remember there will only ever, ever, ever be 21 million bitcoin.  Ever.

The number of bitcoin was determined in 2008 when Satoshi Nakamoto, a person or group whose identities remain unknown, shared the bitcoin whitepaper with the world.  In 2009, Satoshi shared the actual bitcoin code.  Shortly later, Hal Finney announced (tweeted) Running bitcoin to the world.  The number of bitcoin in the code has remained the same ever since.

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As of this writing in 2022, the bitcoin supply is over 91%.  This means over 19,000,000 of the total 21,000,000 bitcoin ever to exist have already been created (aka mined).  The last bitcoin will be mined in 2140 based on the average time it takes to mine new blocks.

To see where the supply is right now, Bitbo.io has a friendly dashboard, and so does bitcoin.clarkmoody.com.

Note that Bitcoin can be permanently lost. In other words, the amount of genuinely accessible bitcoin available worldwide can decrease. This is one reason why you hear expressions about lost keys. Lost keys are like lost passwords, except there’s no helpline to reset them. Satoshi Nakamoto referred to lost bitcoin keys as natural deflation and highlighted that it made everyone else’s bitcoin more valuable. Remember this if you ever lose one of your HODL UP game tokens. It’s just like real life.

What Is The Big Deal About Capping The Supply of Bitcoin?

To understand why it’s a big deal, let’s consider what happens when you don’t have a cap.  We start with a question.  When something is not scarce, how much do you value it?

For our first example, leaves from a tree are abundant.  There are countless leaves in the world.  You don’t see people putting leaves in safes or bank vaults.  How valuable is a pile of leaves?

Gold, on the other hand, is more challenging to acquire.  Finding, digging, processing, and shipping takes a great deal of time and energy.  How valuable is a solid bar of gold?

Here is one last rhetorical example to explain scarcity. Air must be valuable since we can’t live without it, yet we don’t buy the air we breathe. The learning point is that abundance matters.  Why pay for something you are surrounded by? Now imagine air became scarce, e.g., if you were underwater. You would pay any price then.

The economic idea behind these examples is scarcity.  The more scarce something is, the more value we attribute to it. Michael Saylor, a co-founder of MicroStrategy and a huge Bitcoin proponent, emphasizes the 21 million cap turns bitcoin from a digital commodity into a digital scarcity.  Bitcoin adoption is growing.  More people want this scarce asset.  The result?  An increase in value over the long term. 

So What If The Money Supply Grows?

Let’s look at a classic game to make this more fun to understand.  You don’t worry about running out of money when you play Monopoly because the bank has an unlimited supply.  It is like the real-life U.S. money printer, and the inspiration for the popular meme money printer go burrrrr.

U.S. dollars are fiat which means they are declared money.  There is no gold or other asset to back them up … only the government's promise.  So long as you – and everyone else in the world – trust the government, you’re fine.

Now imagine we are playing Monopoly but we change the rules slightly. Instead of getting $200 when we pass GO, we get $400.  For more dramatic effect, try playing with $1,000 per pass.  We’ll call this the money printer go brrrrrr rule.

Over time, players will value the smaller denominations less and less.  Players may even start ignoring $1 and $5 rent transactions.

Over time, players will offer higher and higher bids to get properties if they want to purchase from other players.  For example, let’s say I have Boardwalk and you have Park Place.  I would offer what feels like a lot of money to get a monopoly in regular play.  $700 for Park Place is double the starting purchase price.  Good deal?  How about $3,500 or 10x the starting purchase price?  You would probably take that deal.  With the money printer go brrrrr rule, however, that may not be enough.  In nominal terms, the prices of assets go up, but the purchasing power of each monopoly dollar goes down.

Something else happens that’s more insidious.  More and more of the additional money supply will end up in the hands of the players with properties, while others, still collecting extra free money on each trip around the board, pay rent to those with the assets.  In other words, the extra money introduced into the game is not distributed proportionately.  Over time, it flows to those with the assets.  The disparity between the rich asset (property) owners and other players gets larger and larger.

The Monopoly scenario above is an example of soft, easy money.  Money is printed coupons linked to nothing with intrinsic value, e.g., gold. 

There’s another version of Monopoly you can play … Instead of the money printer go burrrr rule, try the helicopter money rule. The helicopter money rule removes the requirement to pass GO to collect money.  The banker arbitrarily decides to give free money to players.  Any quantity.  Any time.  This not a game you’ll play for very long.  It’s not fun.

In HODL UP, bitcoin is hard money.  It is linked to something even more scarce than gold.  It is money that cannot be messed with … It has the quality of immutability. 

Don't We Need More Than 21 Million Units For Bitcoin to Be Useful As Money?

Yes, the world needs money to be divisible into more than 21,000,000 units.  Fortunately, bitcoin is digital and infinitely divisible.  Bitcoin is not printed.  Bitcoin is not minted.  Bitcoin is not physical coins.  It is 1’s and 0’s in computer code representing numbers.

Each bitcoin can be divided into Satoshis or sats.  Each Satoshi is 1/100,000,000 of a bitcoin.  Multiply 100m x 21m to calculate the total number of Satoshis, and you get 2,100,000,000,000,000. That’s over two quadrillion!  The world has plenty of sats!

The reality is that the specific cap amount does not matter.  Satoshi could have picked one bitcoin.  Had he done so, we could divide that one bitcoin into two quadrillion pieces.  Satoshi could have chosen 21 bitcoin instead of 21,000,000.  The math would be the same except for the number of decimal places.

You can repeat this exercise but with higher caps, e.g., 21 billion.  In this alternative universe, everything about the protocol remains the same except for the number of decimal places.  For example, today’s block subsidy would be 6,250 instead of 6.25.

Bitcoin are interchangeable.  This seems obvious but I call it out because this idea is called fungibility, and it’s a critical property of money.  Each sat is precisely the same as every other sat.  In the game, every token is interchangeable with any other token.  They are all the same.

Key Points about 21 Million

• The number of tokens in the game (42) doesn’t matter.  What matters is that the total bitcoin they represent is ₿21,000,000.

• Bitcoin is hard money.  It is immutable. Bitcoin cannot be printed into existence through declaration (fiat) like U.S. dollars.

• Soft (fiat) money increases the prices of assets, but purchasing power goes down.  Over time, money flows to those with the assets. The disparity between the rich asset (property) owners and everyone else gets larger and larger.

• Bitcoin is scarce.  The supply cannot be arbitrarily changed by anyone or any organization, government, company, or super-genius programmer.  ₿21,000,000 is it. 

• Bitcoin is divisible.  Each Satoshi is equal to 1/100,000,000 of a bitcoin. 

• Bitcoin is fungible.  Every game token is interchangeable with every other token.  Every bitcoin is the same as every other bitcoin.  Every sat is the same as every other sat.

Scarcity in money = abundance in everything else (over time).

- Jeff Booth

When currency isn’t scarce, every desirable good on the planet will become scarce.

- Preston Pysh

2.  Stock to Flow

One framework which helps us understand what makes money good is stock-to-flow. Note, this is not whether money is used for good or evil things. We are just recognizing that some forms of money work better than others.  You don’t need a degree in economics to see by the daily headlines that our money isn’t sound. The world is in trouble. We are learning firsthand how a civilization’s choice of what it uses for money impacts its long-term prosperity.

What Is Stock?

Stock is everything that exists in a usable form, even if held in reserve. For example, gold that has been dug up, processed, and shipped to a safe place counts as stock. Gold still in the ground or that sank on a ship crossing the Atlantic Ocean does not count as stock.  It is not usable.

In HODL UP, we define stock as bitcoin that has been mined. In the game, these are the bitcoin tokens on the decentralized ledger of accounts. This sounds technical, but it isn’t.  The ledger consists of the six colored player reference cards. There is a red account, a blue account, etc. At the start of play, each card has one token.

Stock at begging of play =

1 + 1 + 1 + 1