Addiction to Cryptocurrency is on the rise – It is a form of gambling
At Castle Craig, we see all kinds of addiction. Some are very new, and some have been around a long time. Addiction to cryptocurrency trading may seem a recent phenomenon but is at heart a form of gambling – an activity at least five thousand years old. We have welcomed an increasing number of people seeking help for their gambling problems over the past decade, and this includes cryptocurrency traders.
The nature of currency
We all use currency (money) even if these days we can’t always see it, let alone understand it. Society needs currency because it represents a method of measuring and storing wealth. It is also a medium of exchange. The exact form that it takes is now much more varied than it was.
Types of currency
Cash, paper notes, and shiny plastic ones too are used alongside digital methods. If nothing else, the way currency has evolved is a symbol of an increasingly complex world.
When technology brought us the credit card and then contactless payment, the changes seemed generally helpful and practical. Then, in 2009 came cryptocurrency, which most of us still struggle to understand. Explanations tend to be unfathomable, too – ‘an encrypted data string that denotes a unit of currency’ doesn’t help much.
We all use some form of money. Whatever type we choose, we can use it to gamble.
Cryptocurrency
Cryptocurrencies are digital currencies. They don’t have a central issuing or regulating authority like the long-established Pound, Dollar, and Yen, which are fully backed by their respective governments. Instead, they use, via the World Wide Web, a decentralized virtual system to record transactions and issue new units. This renders them immune to government interference but raises questions about their exact legal status. They are increasing in popularity, and the total market value of such currencies was recently valued at $2 trillion.
Types of cryptocurrency
The best-known and earliest of these is Bitcoin which has been available to the public for over a decade and represents approximately 40% of the market. Other well-known cryptocurrencies are Ethereum, Ripple, and Litecoin. Each has different specifications and functions, and its market value can fluctuate widely as they go in and out of fashion. Cryptocurrency is often favored by the criminal community, and the ones that offer the best path to complete anonymity have recently been popular.
Understanding cryptocurrency
Cryptocurrency traders usually don’t concern themselves too much with understanding exactly how their chosen currency works. A slot machine player doesn’t care how that works either. A recent survey found that only 17% of investors fully understand the significance and potential of cryptocurrency. Although many investors have a rudimentary understanding of the currency they are trading, they are basically there for the thrill and the escapism, lured by the romantic idea of the big win – just like any other gambler.
Reasons for the rise in cryptocurrency addiction
It would be a mistake to attribute all the increases in gambling to the pandemic. There have been other powerful influences at play since well before Covid 19 was ever conceived. Working from home is just one factor that caused the gambling numbers to spike, but the technology that made this happen was already making gambling a simple matter of tapping a phone taken from a pocket. Fifty years ago, most gambling required physical attendance at a casino or race meeting. Gambling at a distance was available to only a few and the idea of currency trading at home or on one’s phone was unimaginable.
The hidden persuaders
Although healthcare professionals are concerned about the dangers of gambling addiction (and indeed all other forms of addiction, too), other powerful groups at work have the opposite interest: They want you to gamble as much as possible in any way you choose. They may say they don’t, but they do. The pressure to trade in cryptocurrencies or indeed simply just to gamble on anything comes from a variety of sources and, to an extent, derives from our own attitudes too. Here are some examples of how this pressure appears:
- The gambling industry: however responsible they wish to appear, the industry makes massive profits by selling the idea of gambling as a glamorous and fun activity. What works for horseracing and football gambling works for crypto asset trading too. Trading exchanges for cryptocurrencies such as Coinfloor and Coinbase charge a fee per trade which can be up to 1% of the amount traded, so they too want you to trade as much as possible. With some exchanges receiving over 20 million visits per week, you can see why.
- The markets: the markets love a punter, especially an ignorant punter, because they feed into the general frenzy and help drive up prices. Market platforms for crypto-trading promote themselves using words like ‘easy’, ‘simple’ and ‘safe’, whereas in reality, these activities are anything but. Yet, with their wild fluctuations and potential for huge wins, they are ideal for gambling. It’s no surprise that one cryptocurrency, Cardano bears the same name as a sixteenth-century Milanese, Girolamo Cardano, who wrote a learned treatise on gambling. Cryptocurrency trading has been promoted quite widely in recent months through advertising, for example, on the London Underground.
- Government: most governments recognize the pernicious effect that any type of gambling has on the population but tend to do too little, though recent improvements in regulation are starting to have an effect. The UK government receives over £3 billion from gambling taxes, so there are, at best, mixed feelings in some departments. The phrase ‘cognitive dissonance comes to mind. Very little attempt has been made to regulate the cryptocurrency markets despite the huge financial risks.
- Technology: the wizards and witches of Silicon Valley may not have set out specifically to make gambling and currency trading something you can do on the beach or in bed, but that is the reality of the sci-fi world they have made. So many things – good or bad, are simply ‘available’ to us in a way they never were before. Small wonder some of us embrace the addictive bits like kids in a sweet shop.
- Dissatisfaction with self and desire to escape from reality: because everyday reality seems to many people much harsher recently than it used to be, anxiety levels are high. Many young people are negative and despairing about their future and are particularly worried about financial matters. Desperate times need desperate measures, they think. In that state of mind, they tend to seek out forums such as Reddit, where groups discuss getting rich through topics such as ‘how to make money from cryptocurrency trading.’ Those tempted to try may end up obsessively checking markets day and night or, worse, penniless and suicidal.
- FOMO: never underestimate the power of FOMO. We are triggered by the sight of someone doing better than us. Somebody doing really well financially can drive us crazy with envy and desire. When they seem to get rich with very little effort, it can be excruciating. Yet these are dangerous emotions for gambling, especially where an element of judgment is needed, such as with currency trading.
Will regulation help?
Although the UK has no specific cryptocurrency laws and cryptocurrencies are not considered legal tender, the Bank of England has issued warnings concerning the absence of regulatory and monetary protection, the status of cryptocurrencies as stores of value, and the dangers of speculative trading and volatility. Treating these types of markets in the same way as traditional markets, which are regulated by the Financial Conduct Authority, including the monitoring of those controlling them and advising the public at large, would be a major step forward. It might help to avert possible financial upheavals in the future too. Whether or not it would lessen the numbers becoming addicted to cryptocurrency trading is doubtful.
Gamblers Anonymous
A better solution than waiting for government help would be to try the self-help route by contacting Gamblers Anonymous. This admirable and totally independent fellowship has been helping people with gambling problems of all kinds since 1957, and there are regular meetings in many locations throughout the UK..
Castle Craig the first to offer treatment
Castle Craig was the first in the UK to offer a program specifically designed to help those addicted to cryptocurrency trading. The number of people treated exceeds one hundred. Those with serious addiction problems sometimes find that the peace, security, and freedom from outside pressure found in a residential setting is the best way of dealing with the situation.
