Developing one of the most successful games of all time: the basic principles

By R. Philip Bouchard, on Medium, June 2017.  How I Managed to Design the Most Successful Educational Computer Game of All Time

The Oregon Trail is, by most measures, the most successful education computer game of all time. Many versions of the game were created over the years, dating all the way back to 1971. However, the version that many people assume is the “original” — the version that constantly appears in memes and magazine articles — is the 1985 Apple II version. (The 1985 design was also implemented on the IBM PC, Commodore 64, and many other platforms, but it first appeared on the Apple II.) I was the lead designer and team leader of this most famous version of this most famous educational game, and therefore I am an excellent source for revealing exactly how this design came to be.

Because this is a success story — and “success has many fathers” — the names of several other people will appear in this account (not just my own name, despite the braggadocio in the title of this piece). All of these people played key roles in the success of The Oregon Trail.

There are several reasons behind the popular impression that the 1985 version was the “original”. One obvious reason is that the 1971 version was text-only, and relatively few people have seen or played the text-only version. A second big reason is that most of the features that people fondly associate with the game were first introduced in 1985. The 1985 product was far more than a new version — it was a complete reimagining of how to create a game about the Oregon Trail. I am quite certain that the 1985 design was the most original and creative version in the entire history of the product, excluding (of course) the completely original 1971 version. In other words, the game that ultimately became so successful was invented in two equally important stages — one in 1971, and the second in 1984–85.

The True Original Version

The very first version of The Oregon Trail began as a concept in the head of Don Rawitsch, who in 1971 was a student teacher in Minnesota. He imagined a board game that could be played by students in the class that he was scheduled to teach. Soon after Don began work on this concept, he shared his idea with his roommates — Bill Heinemann and Paul Dillenberger — who were also student teachers. They were enthusiastic about Don’s idea, but they suggested that it should be a computer game instead of a board game. The Minneapolis school district, where all three taught, had recently purchased a mainframe computer, and each school in the district had a teletype terminal for remote access to the computer. Furthermore, both Bill and Paul had learned BASIC, a simple programming language that was ideal for creating a small computer program such as the one they envisioned.

Don quickly agreed to the change in plans, and the three began to design and program the concept. Two weeks later, just in time for the class that Don was scheduled to teach, a first rough version of the game was ready to show the kids. Despite the awkwardness of the teletype machine, the kids clearly enjoyed playing the game. Bill and Paul observed similar results at their school. The game remained available, accessible to students in their spare time, for the rest of the semester. But at the end of the term, when his period as a student teacher came to a close, Don deleted the program from the computer system.

A few years later Don began work at MECC, a new Minnesota state agency tasked with providing computing access to all of the schools in the state. MECC’s computing model was similar to that of the Minneapolis school district — a centrally located mainframe computer that could be accessed via a teletype terminal in each school. But now, instead of serving a single school district, this new organization served the entire state. Don had saved a printout of the BASIC program from the 1971 game, so in 1974 he typed the same program into MECC’s computer system. Then he did some fine-tuning by tweaking the frequency of the various random events in the game. Finally, in 1975, he made the game available to all of MECC’s users. OREGON (as it was called) soon became the most popular educational activity on the system — and it remained so until MECC shut down its mainframe operations in 1983.

This early text-only version of The Oregon Trail was exceedingly simple — as were nearly all of the educational activities on the MECC mainframe. And yet seven of the core concepts that appeared in the 1971 game have re-appeared in every version since then. These core concepts are:

  • The player buys supplies before starting the journey to Oregon.
  • There are opportunities to hunt for food along the way.
  • There are opportunities to make purchases at forts along the route.
  • The player must manage the level of supplies to avoid running out.
  • The rate of travel depends upon the current conditions.
  • Misfortunes frequently occur.
  • The game ends when the player reaches Oregon, or when the player dies along the way.

The 1971 game was structured as a repeating cycle. Each cycle represents two weeks of travel on the trail. Below is an example of a typical cycle, from an actual session of the game. Most of the text in this example was typed by the computer, but at times the computer stops to wait for a response from the player. The player’s responses are highlighted in yellow:

As you can see from this example, each cycle begins with a status update. Then the player decides whether to hunt. (Sometimes the option to visit a fort is also available, as shown here.) If the player chooses to hunt, then he shoots the rifle by typing “BANG” when told to do so. If the typing was fast and accurate, then the hunting is successful. The player now decides how much to eat. Finally, one or more “misfortunes” occur, which can reduce the supplies. Then the cycle repeats two weeks later, taking into account supplies used in the interim. The cycling continues until the player either reaches Oregon or dies trying. A successful journey requires approximately 12 cycles — depending upon various circumstances that affect the rate of travel.

For many players, the principal appeal of this game was the challenge of hunting — typing the word “BANG” fast enough to be successful, without making a typing mistake. Therefore the typical way to play was to give an identical response in every cycle — first type “2” to hunt, then type “BANG”, then type “2” to eat moderately. The only necessary deviation is when one of the supply items gets dangerously low, forcing the player to go shopping at a fort instead of hunting. The second appealing aspect of this game was the challenge of managing the resources — keeping an eye on the supplies to ensure that none of them run out, which would be a fatal mistake. The third appealing aspect is that there are so many different misfortunes that might occur. So you never know what will happen next — unless you run out of any supplies, in which case you will probably die quite soon.

The original design also featured random attacks from wild animals, bandits, and “hostile riders”, each of which provided additional opportunities to type “BANG” — and dire consequences for failing to type rapidly and accurately. In the late 1970s a small change was made to the game, so that the player would not know in advance what word he would be expected to type when it came time to shoot. Sometimes it would be “BANG”, but it could just as likely be “POW”, “BLAM”, or “WHAM”.

The World Changes

In 1978 Don Rawitsch published the BASIC code for OREGON in Creative Computing magazine. After that many people tweaked the code to run on various brands of microcomputers. Someone — I don’t know who — put a version of this program code on an Apple II. This version of the game was not a new design — in fact it mostly used the same BASIC code that appeared in the magazine. However, the author did make three important changes to the game, one of which was a reimagining of the hunting activity. Instead of being text-based — like all other parts of the game — this new activity presented a sketch of a deer, which the player could shoot at by pressing any key on the keyboard.

By 1979, MECC was buying Apple II computers in large quantities (at a discounted price), and reselling them at cost to schools all over Minnesota. In 1980 MECC also began to distribute disks containing Apple II software to these same schools. (These disks were provided for free to Minnesota schools, but sold at a significant profit to schools outside Minnesota.) Each disk contained a collection of programs ported over from MECC’s mainframe computer. The OREGON game appeared in two of these collections, one of which was named “Elementary Volume 6”:

MECC continued to distribute “Elementary Volume 6” for many years, and the game OREGON remained MECC’s most famous product, even after MECC shut down its mainframe operations to focus entirely on microcomputers (Apple II, Atari, IBM, etc.). However, the competitive landscape completely changed between 1980 and 1984. In 1980, all educational computer software was still being designed and programmed by amateurs — hobbyists and teachers who created these small, simple programs in their spare time. Furthermore, no large private companies had yet entered the educational software market — neither the school market nor the home market.

By 1984 the world of educational software was completely different. A great number of companies — both large and small — had begun to sell educational computer software. Some of these companies specialized in the school market, while others specialized in the home market. By 1984, all of the best educational software was designed and programmed by professionals — people whose full-time job was to design or program such software.

In order to remain competitive, the same transition occurred within MECC. By 1983 MECC had acquired a staff of professional designers and programmers tasked with creating top-quality original software for the Apple II. By 1984 the improvement in MECC’s products was quite obvious to everyone. This was the beginning of MECC’s “golden age” — a decade-long period in which MECC turned out exceptional new software year after year — mostly targeted to the school market, but also including a few titles for the home market.

Although MECC was now focused almost entirely on the creation of new, original titles, it also had three famous simulations from the 1970s — Oregon Trail, Lemonade, and Odell Lake — that it did not want to abandon. All three activities had been ported to the Apple II by 1980, but by 1984 they were embarrassingly outdated — especially in terms of their appearance. MECC decided that it would create new versions of all three activities.

The Decision to Break with the Past

It was in this context that I was chosen by MECC in October 1984 to lead the creation of a new version of The Oregon Trail. I had joined MECC’s staff in 1981 with a substantial background in the design and programming of computer-based simulations (although prior to 1981 all of my simulations had been targeted to college-level students). I was the only person on staff with this kind of experience, and therefore I was the logical choice for the role of lead designer and team leader. Still, I was surprised by the details of the mandate that I was given.

First of all, I was told to design a product for the home market, not the school market. Previously, MECC had always specialized in the school market. This would be MECC’s very first attempt to create a product specifically designed for the home market.

Second, my instructions were to do far more than just create a better-looking version of the original game. I was told to take the original concept and run with it. I was to expand upon the original concept, building a much more elaborate and robust game. I could do so in any way that I saw fit, provided that I preserved whatever magic had made the original so popular. However, I had to design the product specifically for the Apple II — which resulted in some serious restrictions, such as having to work with a palette of just six colors. (I would have preferred to use a more recent machine, such as the Commodore 64.)

My mandate to re-envision and redesign The Oregon Trail was almost overwhelming at first — the possibilities were endless, yet I had to get it absolutely right on the first release. For 13 years, from 1971 to 1984, the OREGON game had remained essentially unchanged. A few small details had been tweaked along the way, but never had the product been completely re-imagined and redesigned. Never had the underlying models been changed — the structures, algorithms, and assumptions upon which the game is based. For the very first time, we were going to throw out everything — including all of the existing software programming, which dated back to 1971 — and start completely from scratch. Every detail was up for reconsideration. Furthermore, I needed to create a much richer and more elaborate experience than the original OREGON — and this would require a great deal of new, original thinking.

To kick off the project, I defined a key metric to serve as the cornerstone of our approach: “Do the kids that love the old version like the new version even more?” The idea was to perform this test periodically throughout the project, to verify that we were still on track. Whenever we found ourselves deep in the weeds, this yardstick would bring us back to reality, allowing us to see the big picture again.

Because I was designing a home market product, I knew that I had to create a game that was highly entertaining, in addition to being clearly educational. I felt that it was possible to do both, without seriously compromising either — but I had to strike a careful balance in the details. In particular, I felt that both the educational value and the entertainment value should arise from immersing the player in a historically accurate experience.

From the very beginning, I saw that this project presented many challenges, but the issue of space constraints seemed especially challenging. The new game needed to have a rich set of color graphics, but the graphics would require a lot of space — both on the floppy disk and in the Apple II RAM (memory). I also hoped to add many new details and gameplay aspects, all of which would require space. Unfortunately, I was designing for a computer that had only 64K of RAM. Furthermore, the product would be distributed and played on a double-sided 5.25” floppy disk — providing a total of just 280K of storage space. (Note that the Apple II did not have a hard drive, only a floppy disk drive.)

As the project began, our core team consisted of five people. In addition to me (Philip Bouchard), there was also John Krenz (lead programmer), Charolyn Kapplinger (lead artist), Shirley Keran (research), and Bob Granvin (additional programming). All five of us played active roles in the early brainstorming and planning for the product, although MECC eventually moved Bob to a different project that needed his attention. And so the five of us began a project that became MECC’s biggest effort to date, lasting a total of 10 months, from October 1984 to the end of July 1985.

Developing the Key Concepts

In MECC’s traditional design approach (as of 1984), the instructional designer first imagines a computer-based student activity, and then creates a series of sketches that illustrate what should appear on the screen in each of the key steps of the activity. This collection of sketches is then packaged with written notes that provide additional details. The sketches and notes together constitute a “design document”. The designer then reviews the document with a small team of up to three other people — the lead programmer, the lead graphic designer, and an experienced programmer/analyst. Together they identify missing details in the design, and they help to resolve any other issues that the design presents. The designer then makes any additions or changes that are needed to complete the design, and the team gets to work creating the graphics and generating the program code.

This model worked well enough for the relatively simple products that MECC had been creating up to that time, but I could see that it would not work for the product that I intended to design. First of all, I envisioned the game as being based on a complex interlocking set of mathematical simulation models — a weather model, a health model, a travel model, and so on. Furthermore, each of these models would be based on a complex interlocking set of mathematical formulas. These models would require incremental design and tuning — which meant not only that I needed to crank out a great number of formulas, it also meant that the design needed to be specified and implemented in iterative stages, instead of all at once.

Second, I felt that the best way to build an innovative but successful design was to start with a an ambitious set of new ideas, and then to gradually build and test these ideas through successive refinement — first by creating a simple prototype, and then by building up the real product one aspect at a time. At each step of the process we should evaluate where we are, compared to where we want to be, and then prioritize what to do next. Some of our cherished ideas would have to be shed along the way, but by constantly prioritizing and improving, we would achieve a successful result in the end. (I first learned and applied the concepts of successive refinement when I studied computer science in graduate school in the 1970s. However, decades later, I saw a lot of overlap between these ideas and the concept of “agile programming”.)

But first, I need to design the underlying framework for the game, and for a couple of weeks this had me stymied. The original OREGON was based on the concept of “turns”, each representing exactly two weeks of real time. This simple framework was well-adapted to its original purpose — a text-based game played on a teletype — but it was poorly adapted to the needs of the new game. I wanted to create a framework that was intimately tied to the actual geography of the Oregon Trail, and I wanted to give the player a much greater set of opportunities to make decisions — not just what to buy and how much to eat. It soon became clear that I would have to invent a completely different framework for the new game. But as I considered one idea after another, none of these new ideas seemed to work.

So I broke the problem into pieces, and I began to tackle each piece individually. Eventually, over a period of several weeks, I was finally able to generate a solution to every problem. The resulting new framework for The Oregon Trail was based on seven key concepts, none of which were present in the 1971 design:

  1. To tie the new design to the actual geography of the Oregon Trail, the journey will consist of distinct segments of varying length, each ending at a unique major landmark along the trail. (Of all the many differences between the 1971 product and the 1985 design, this might be the most important — in part because it enabled so many other crucial changes.)
  2. A set of activity modules is available at each landmark. In many cases there is a key activity tied to the landmark, such as crossing a river or purchasing goods at a fort.
  3. The landmarks are grouped into distinct geographic zones, each with its own data about climate, terrain, and wild animals.
  4. Most of the activity modules are data-driven and contain randomization, providing a different experience each time that the module is used. For example, each time that the hunting activity is launched, it uses the zone data in order to present animals and terrain that are appropriate to the current location on the trail. But even if the player hunts in the same zone over and over, the arrangement of the terrain will always be unique, and the animals will appear at unpredictable times and locations.
  5. In addition to the landmark-to-landmark cycle, there is an independent daily cycle, which includes all of the resource management computations (supplies, health, etc.) along with the random events. Therefore the core computational cycle in the 1985 design is one day, instead of the two-week cycle used in the original design. This has huge ramifications for all the computations and all the interactions.
  6. Between landmarks, the journey proceeds automatically, but the user can pause at any time. (This was an especially crucial concept, because it provides the user with access to many activities and events, without constantly interrupting the game.) However, the journey pauses automatically if a major event occurs.
  7. Pausing between landmarks provides access to another full set of activity modules, some of which are distinct from the activities available at landmarks. (For example, you can talk to people at landmarks, and you can go hunting between landmarks.)

This new framework was dramatically different from the 1971 design, allowing me to create a much richer experience for the player. In the new design, the relationship between the activity modules looked like this:

With this highly flexible structure serving as backbone of the new product, we could now plan what activities would be accessible while traveling between landmarks (A-F in the diagram) and what activities would be accessible at each of the landmarks (G-L in the diagram). Each of these distinct modules (represented by the four rectangles and the 12 circles) could be designed and programmed separately. Furthermore, each of the half dozen mathematical simulation models (not shown in this diagram, but operating underneath it all) could also be designed and programmed separately.

My teammates were enthusiastic about this new framework, so I began the long process of fleshing out the details. First of all, based on my research and that of my colleague Shirley, I prepared a list of candidate landmarks. Then, by applying several selection criteria, I trimmed the set down so that the journey would consist of approximately 16 legs. I also introduced the concept of “cutoffs”, meaning that in addition to the principal route, the player would sometimes have the option to take an alternate route. Then I began work on creating a list of possible activity modules, systematically turning out “concept documents” for all of the most promising ideas.

Throughout this concept development stage, I conferred heavily with my teammates. Before writing up each concept document, I would usually discuss the ideas I had with my teammates. And then after I wrote each concept document, I would review the document with my teammates to get their additional feedback. The upshot is that even though I was the author of all but one of the concept documents, the ideas contributed by my teammates (Cheryl, John, Shirley, and Bob) were often reflected in my documents. This was especially true of the initial concepts for the hunting activity, which Bob, John, and I hashed out together.

Incorporating Humans into the Design

Early in the project, my second highest priority — second only to incorporating real geography in the product — was to include human characters in the design. The 1971 design omitted the concept of people, and therefore you travel the entire 2000-mile route without ever meeting or interacting with another person. I wanted to change that. I brainstormed many distinct concepts for how the player might interact with human characters along the way — or at least be aware of other humans— and I sincerely hoped to include nearly all of these ideas in the finished product. But as the project progressed, I had to cut some of my cherished concepts, because of limited space on the floppy disk and limited budget to design and build the product. However, I was able to incorporate four of the concepts into the design, each of which made a huge impact on the “human feel” of 1985 product:

  • Before beginning the journey, you name four other people who will travel with you — typically family members or friends. Each member of your 5-person party is subject to illness and accidents. As you travel the trail, a principal goal is to keep all of these people alive and healthy. If any of them gets sick or dies, then they are mentioned by name. This collection of concepts was a crucial addition to the new design.
  • As you purchase your goods before starting the journey, you enter a store (“Matt’s General Store”) and interact with the proprietor of the store. Matt provides helpful advice as you make your purchases.
  • On the real Oregon Trail, people tended to congregate at each of the landmarks. These people included not only other travelers, but also Native Americans, local traders, and soldiers. Therefore, at each landmark in the game, the player can meet and talk to three different people — each of whom offers an interesting perspective on his or her experiences. Furthermore, many of these conversations provide helpful hints about how to survive the journey. (Unfortunately, due to limited disk space, we could not include pictures of these characters.)
  • If you make it all the way to Oregon, then the high-score list is pre-populated with the names of actual people who made the journey to Oregon or who served as early explorers in the region.

Thanks to the lead graphic designer, Charolyn Kapplinger, people also appear in many of the large landmark graphics. This also adds significantly to the human side of the design.

My single biggest regret regarding The Oregon Trail is that I had to abandon most of my ideas for complex, nuanced interactions with Native Americans. Several such modules were included in the design concepts that I wrote up. However, a few of the simpler ideas did make it into the finished product. For example, you are much more likely to have a successful crossing of the Snake River if you hire a local Indian to guide you — which was also the case on the real Oregon Trail.

Other Top Priorities

Another top priority for me was to include river crossings — a key aspect of the Oregon Trail experience that was missing from the original design. I chose a set of representative crossings — a small subset of the actual number of crossings made by the travelers on the trail. At each river the player must choose between several methods of crossing, taking into account the current conditions at the crossing. A highly detailed simulation model underlies this module, controlling the current conditions of the river (based on the recent weather, among other factors) and also controlling the probabilities of various outcomes, based on conditions and the player’s choice of how to cross. The results are communicated in a nail-biting animation that puts many players on the edge of their seat.

Still another of my priorities was to include two more “action” activities, in addition to hunting. I soon modified this plan so that one of these activities would operate as an extended logic puzzle, rather than an action game. These two activities would be associated with the final leg of the journey to Oregon, the last 100 miles. The player could choose to raft down the Columbia River (the action activity), or to take the Barlow Toll Road, in which case the activity is the challenge of getting the wagon up and down through the difficult mountainous terrain along the route. Again, disk space and budget forced us to make cuts — but a stripped-down version of the rafting game did eventually make it into the product.

And finally, one other priority was to find as many ways as possible to build “replayability” into the product. This had seldom been a concern for MECC on any previous product, because all of these products had been targeted to the school market. For schools, where children far outnumbered computers and access time was highly limited, most of MECC’s products were designed so that the full value of the product could be experienced in a brief amount of time. But for the home market, I needed to design a product that a child could visit over and over — and it would still be interesting after 20 or 30 or 40 hours of play. To encourage replay, I incorporated a long list of features and details into the new design:

  • The initial motivating factor — identical to the motivator in the original product — is to survive the entire journey to Oregon. As in the original, most players fail on the first attempt — but they perceive that it is possible to do better. And so they keep trying, doing better and better on most tries, until they finally succeed in reaching Oregon.
  • Just as the player reaches Oregon for the first time, a surprise is unveiled — by surviving all the way to Oregon, the player has been awarded a score. This score is based on several distinct factors, which are clearly itemized. So at exactly the moment when the player achieves the initial goal — to reach Oregon — a new, highly motivating goal is revealed — to get a much better score.
  • The player also sees that the high-score list is pre-populated with names — and most of these people have higher scores than what the player has achieved. This initial list creates a clear benchmark to strive for — to climb up and up the list until finally exceeding the top score on the list (that of the explorer Stephen Meek).
  • As the player seeks to get higher scores, it becomes apparent that it is necessary to attempt the more difficult starting conditions — traveling as a carpenter (with less money) or a farmer (with even less money), rather than traveling as a banker. Although it is more difficult to reach Oregon when you have less money, you get more points for your efforts.
  • The new game has far more options and alternative approaches to explore than the original game. Over time, many players become interested in exploring these alternatives. What if I start in a different month? What if change the pace or the rations? What if stop for rests every now and then? What if I talk to a lot more people to get advice? What if I float across each river instead of trying to ford any of them? What if I hunt less (which uses up a day of time in the new design) and shop more — or vice versa? What if carry a greater number of spare wagon parts? What if I take the Barlow Toll Road instead of rafting the Columbia River — or vice versa?
  • As in the original game, some players will want to play over and over just to go hunting. And to that end, I wanted the new hunting game to be both challenging and compelling.

All of these factors — and several others that I included in the design — resulted in a game with a very high degree of replayability. Without this characteristic, the game would not have been very successful in the home market.

The Mathematical Models

In both the original 1971 game and the new 1985 design, the simulation is driven by a set of mathematical formulas tied to state variables. Each state variable tracks the current value of some important quantity. In the 1971 design there were exactly eight state variables:

  • Cash (in dollars)
  • Food (as a dollar value)
  • Ammunition (the number of bullets)
  • Clothing (as a dollar value)
  • Miscellaneous supplies (as a dollar value)
  • Oxen (as a dollar value)
  • Distance traveled so far (in miles)
  • Current date (incremented by 2-week jumps)

Note that there is no state variable for health in the 1971 product. Therefore your health in the current turn does not depend in any way upon your health in the previous turn. The game ends if you die, and you can die from any of the following states:

  • You run out of food and starve.
  • You run out of “miscellaneous supplies” and you happen to get sick. (Cold weather and insufficient clothing increase the probability of becoming sick.) The rationale was that every time you get seriously sick, you must have medicine or else you will die.
  • You run out of money and you get sick. The rationale was that every time you get seriously sick, you must pay a doctor or else you will die.
  • You run out of bullets and are attacked by “hostile riders” who massacre you.

I strongly disagreed with the idea behind three of these four end-game conditions — only starving made sense to me. The year in which I set the game (1848) was long before the invention of modern antibiotics. The medicines available at that time had little effect on the diseases commonly contracted along the Oregon Trail. Therefore it made no sense that all diseases should be 100% curable with medicine, and 100% fatal without medicine. Likewise, it made no sense that you could always find an available doctor anywhere along the trail, and that you would always die without a doctor, but always live if a doctor was present — and that a doctor would never, ever treat you for free. I eventually eliminated medicine and doctors from the design entirely.

I also disagreed with the frequent attacks by bandits, wild animals, and “hostile riders” in the original game — and the need to drive all of them off by shooting at them. None of this was consistent with my historical research regarding the Oregon Trail. So I removed all of these interactions from the design.

For the new design, I completely reimagined how the underlying simulation model should work. Part of this change was necessary because of my switch from 2-week time increments to 1-day time increments. But most of the change was driven by a desire to provide a much richer model, and also by a completely new vision of what should trigger the deaths of the five members of the party. The new game would include a complex health model that employed several different state variables, allowing the game to track the general health of the party on a daily basis, as well as the state of recovery of each party member from any accidents or diseases.

Another important change was the inclusion of a complex climate and weather model, based on the actual month-by-month values for average temperatures and rainfall at various points along the trail. (In the original game, the month of the year has no effect upon the weather.) As the player travels along the trail, each day’s weather is based on the current month and the player’s current location along the trail. The simulation retrieves the corresponding average temperature and adds or subtracts a random deviation. The simulation also retrieves the odds of rainfall and then generates conditions that may be dry, rainy, or very rainy. (If the weather is very cold, then snow replaces rain.)

Instead of a single simulation model, I designed the following interlocking models, each consisting of several to many interlocking mathematical formulas:

  • Climate and weather
  • Health
  • Progress on the trail
  • Supplies (cash, food, oxen, bullets, clothing, and spare parts)
  • River crossings
  • Scoring system

I ended up with a huge set of state variables, and a huge set of mathematical formulas. With so many details affecting one another, I knew that I would have to do a lot of fine tuning of the gameplay as we tested the game. Especially in the final three months of the product development, I tweaked all of the formulas and starting values in order to produce a better and better balance in the gameplay.

The New Set of Core Concepts

By the end of July 1985, The Oregon Trail was complete and ready for release. To our delight, the product was an instant hit. In addition to becoming quite popular in the home market, it soon became the most ubiquitous educational software product in North American schools. Our new game, along with its successor versions, made millions of dollars for MECC’s owners over the following years. (MECC had begun as a state agency, but it was later sold to private investors.) Although these riches did not trickle down to the people who had designed and built the game, we were quite gratified to see what we had accomplished — the creation of a highly successful product that ultimately became a classic game and a cultural icon.

Designing and building this completely new version of The Oregon Trail had not been a straightforward, linear process. In my early design documents, I had proposed and considered all sorts of ideas, only some of which made it into the finished product. By the time we released the game, the following innovative new features had been incorporated:

  1. Real geographic details. The original OREGON game included almost no geographic details at all. No rivers, mountains, forts, or other landmarks were ever mentioned by name. A key goal of my new design was to incorporate lots of real geography, woven throughout the game, illustrated with attractive color graphics.
  2. Landmark-based travel cycle. The original OREGON employed a very simple 2-week game cycle, without any landmarks. I divided the primary route into 16 segments, each beginning and ending with a famous landmark. At each landmark, and also between landmarks, the player makes many decisions that were not available in the original game.
  3. Continuous daily cycles. The journey to Oregon typically takes about 150 days. I needed to incorporate a daily cycle into the design, so that crucial events could occur on any day of the journey, and to allow the player to track the supplies on a daily basis. To avoid halting the game over and over, the game continues on “auto pilot” between landmarks, until the player interrupts or a major event occurs.
  4. Choices as to the route. The original OREGON presented the Oregon Trail as a single continuous path, without any branches or choices of route. I introduced a more realistic situation where the player must occasionally make a decision as to which way to go — and this decision can have very important consequences for the player.
  5. River crossings. In the original OREGON, there were no rivers and no crossings. I made river crossings a major feature of the new game. At each crossing, the player must make crucial decisions, based on the current conditions, which are strongly affected by the recent weather, which differs with each play of the game.
  6. A re-imagined hunting activity. In the original OREGON, you hunt by typing the word “BANG”. Our goal was to turn the hunting activity into a bona fide skills-based arcade-style game, incorporating the actual terrain in which you are hunting, such as prairie, mountains, or desert. Likewise, the species of animals you find are based upon where on the trail you are currently located.
  7. A point system. In the original OREGON there is no point system. In order to build a high level of replayability into the product, I designed a point system that is closely tied to the difficulty level you choose. Furthermore, as another motivator, the high-score list is pre-populated with a set of historical names covering a wide range of scores.
  8. Family members. In the original OREGON, there is little mention that other people are traveling with you. To make the experience more personal, my design requires each player to provide four additional names as traveling companions. If you make bad decisions or encounter a streak of bad luck, then members of your family or group will die.
  9. Talking to people. There is no conversation system in the original OREGON. In my new design I allow the player to talk to people along the way. This is an important method for obtaining helpful hints and discovering historical and geographic details of interest. Furthermore, it makes the game seem much more human.
  10. River rafting game. The original OREGON does not mention rafting down the Columbia River, which I felt was a fascinating bit of history, as well as a great opportunity to include another arcade game in the product. Therefore we built the river rafting game, albeit a simpler version than what we had originally intended.
  11. Tombstones. Another famous feature we added is the ability to create a tombstone for yourself after you die. This humorous interlude compensates for the player’s failure to complete the journey. But the real hook is that we store the tombstone data on the game disk, so that the next player who uses the same disk can see the tombstone.
  12. A detailed health model. The original OREGON does not track the player’s health from turn to turn. My new design included an ongoing health model for the entire party, along with tracking individual illnesses and injuries. The weather, food rations, and pace all have cumulative effects on the party’s health, which can improve or decline over time.
  13. A detailed weather model. The original OREGON did not include a true weather model, with seasons and data tied to several distinct climate zones. (The original had only two climate zones and no seasons.) In the new game, the program computes the weather every day, based on the current month and location. This in turn affects many other factors — such as health, river crossings, availability of water, and so on.
  14. Robust resource management. My new design provided many new ways for a player to manage his resources, including: 1) adjust the pace of travel, 2) purchase specific types of spare parts, 3) rest at any time to improve the party’s health, 4) barter with other travelers to acquire essential resources, and 5) buy additional oxen at forts.
  15. A captivating travel screen. The travel screen in the 1985 product — featuring a tiny animated ox and wagon — has become the iconic representation of the entire history of The Oregon Trail game. The combination of elements on this screen is both highly memorable and highly effective.
  16. Matt’s General Store. In the original game, you never interacted with people. In the 1985 design, we introduced Matt’s General Store. Matt is the friendly store proprietor who assists you with your purchases, providing helpful advice as to what you should buy and how much you should buy.
  17. Specific diseases. In the original game, if you get sick, then the disease is never named. (After you die, then pneumonia might be mentioned.) For the new design, I incorporated five diseases or symptoms often named by travelers on the Oregon Trail: typhoid, cholera, measles, dysentery, exhaustion, and fever. Oddly, one of these five has captured the popular imagination and become a huge meme. (“You have died of dysentery.”)
  18. Difficulty levels. To encourage replay, I built three difficulty levels into the game. I chose three distinct professions to represent the three difficulty levels: banker, carpenter, and farmer. These choices have also become a meme.
  19. Trading with people. At any time between landmarks, the player can attempt to swap items with passers-by. This can be quite helpful under certain circumstances, especially if a crucial wagon part has broken. However, this module is a pale shadow of the trading system I had intended to include. I later included the full, robust trading system in the game Lewis & Clark Stayed Home.
  20. Options to rest or change the pace. The player can choose to speed up or slow down the pace, or to stop altogether for a few days of rest. These decisions represent a major tradeoff between the health of the party and progress on the trail.
  21. Period music. At each landmark along the way, you can hear a different melody. Furthermore, every melody is an actual tune that was popular at the time of the Oregon Trail. Unfortunately, this innovation can be more annoying than helpful, especially on the Apple II, which has no volume control.

Taken together, these 21 innovations resulted in a very different experience compared to the earlier versions of the game. The new game was longer, with a much richer set of opportunities for decision making. It also allowed players to succeed in more than one way — by using various possible strategies and gameplay techniques. This was essential for my goal of making the game just as appealing to girls as it was to boys, as well as appealing to a broader range of tastes. In the end, the new game proved to be immensely popular with an exceedingly wide audience.

Of course, another big difference is that the original OREGON was a text-based game, while the 1985 design was full of color graphics. The decision to include graphics was an obvious necessity, not an innovation. On the other hand, some of our decisions about how to include the graphics were indeed innovative. For the 1985 game, we incorporated as many graphical details as we could fit on the Apple II disk, including the animated travel screen, animated river crossings, the hunting game, the rafting game, and a full-screen graphic for each of the landmarks.

Every now and then, I run across an online article that suggests that the 1985 Apple II version of The Oregon Trail was essentially identical to the original 1971 game, except for the addition of color graphics. This assertion is so ridiculously inaccurate that it completely baffles me. In fact, most of the features and details that people associate with the game were first invented for the 1985 product. On the other hand, my new design would never have been created if not for the great success of the original. Furthermore, the original version introduced seven key concepts upon which all later versions of the product were based. But after my 1985 design came out, every subsequent version treated the 21 major new concepts from that design as part of the essential core original design. Likewise, many of the lesser details from the 1985 design also become incorporated into later versions.

Why the Process Succeeded

In the end, we met and exceeded all the goals for this project — except that the timeline and budget ran somewhat longer than we had anticipated. However, the product was completed in time for the autumn 1985 release to the home market, as intended. True to the goals, the product became a massive hit — not only in the home market, but also in the school market.

We certainly ran into some bumps and detours as we designed, built, and tested The Oregon Trail. And yet, overall, the process was quite successful. Looking back at the details of the project, I see several lessons regarding how to plan and start a new project:

1. Seek lots of input, but don’t succumb to design-by-committee.

I wanted all members of the product team to express their thoughts and contribute ideas. However, a committee will seldom produce a good design, nor can a committee make decisions quickly. Therefore, for the initial stages of design, I started with a divergent phase, when ideas are generated, followed by a convergent phase, when the ideas are narrowed down. Lots of people can and should participate in the divergent phase, but no more than three people should participate in the convergent phase for any particular module. After the winning concepts are selected, most of the design work still lies ahead, and most of that work will be done by individuals. But throughout the project, team members provide regular feedback to one another. And at key points in the project, feedback is solicited from people outside of the team, and user testing is conducted. In this way we continue the balance between getting ideas from many people, yet making decisions with very few people.

2. Create the design in stages of successive refinement.

Before attempting to design The Oregon Trail, I felt it important to define the high-level ideas, starting with the goals: Why are we creating this product? Who is the target audience? What will be our criteria for success? Then I proposed a general framework for the product, along with the key modules and features. After that, we defined each of the modules and features to a medium level of detail — enough to communicate how each would work. Finally, I fleshed out the full details of every module and feature. Meanwhile, as the product took form — first as prototypes and then as actual code modules — I continued to make design improvements. Each screen went through successive waves of scrutiny to improve the layout, text, and usability, and the underlying mathematical equations went through rounds of tuning to improve the gameplay. I doubt that it would have been possible to design everything first, in a single huge document, before starting work on building the product. Attempting to create one huge document at the outset would have been wasteful at best — and catastrophic at worst.

3. Create prototypes.

While it is helpful to draw sketches of the proposed screens, a prototype provides additional information. The first objective of prototyping is “visualization” — allowing people to see a vision of the finished product, even if only in rough form. As a second stage, the prototype can be made partially interactive, allowing people to get a taste of playing the finished game. Both of these stages provide useful information for adjusting the design relatively early in the project — certainly much earlier than if we had waited for a beta version before showing it to anyone.

4. Test the prototypes and early draft software with users.

It is certain helpful when teammates and other colleagues evaluate the prototypes — but this alone is not adequate. It is also crucial to investigate how real users react to the product — as soon in the development cycle as possible. No matter how experienced and insightful the designers are, there will always be surprises when real users try out the product. These surprises range from small details to much larger issues. For The Oregon Trail, one of the small surprises was that the kids did not understand the word “outfits” — which I then changed to “sets of clothing”. A medium-level surprise was that many players were confused by the screens where you name the members of the party, so I revised those screens. And the most significant issue we found was that the travel screen in the alpha testing did not hold the interest of the players. And so we redesigned this screen, which then became the most famous screen in the product.

5. Constantly prioritize what needs to be done next.

On nearly every project I have worked on, we had to scale back the plans at some point, either subtly or dramatically. This is a key reason to prioritize the various components. Always put an early emphasis on the modules and features that are most likely to be in the finished product.

Risks are another factor to consider. Any project has risks, which are tied to unknowns. To reduce the risks, it is crucial to explore the unknowns early in the project. Some risks are technology based — Will this module be fast enough? Can we get everything to fit on the disk? Some risks are user based — Will users be able to complete this complicated task successfully? Will users understand the meaning and details of this crucial screen? The priorities early in the project are to design and build prototypes or proof-of-concept modules that address the principal unknowns, thereby increasing the odds of success.

This is exactly what we did with The Oregon Trail. In the earliest stages we decided what was most important to illustrate with the internal prototype. Then we decided what features were most important to test with kids, and we included those in the Alpha version. Immediately after that, we prioritized all the modules and features that were planned for the product, on the assumption that not everything would make it into the finished product. From a fairly early stage, we also drew up technology plans and conducted technology tests to address the technical risks.

Summary and Thanks

In the course of my career, I have worked on countless software projects. For the vast majority of these projects, I have every reason to be proud of the results — while also being aware of certain details that could have been further improved. However, except for The Oregon Trail — and to a lesser degree Number Munchers — none of these projects resulted in a product that became truly famous — even though some of them (especially the web-based applications that I designed for corporations) did indeed get a lot of use.

The upshot is that I feel thankful for whatever fame my products have been able to achieve. I am particularly thankful for having had the opportunity to work on The Oregon Trail — and for the combination of circumstances that allowed the product to become such an outstanding success. I am thankful for having been able to work with highly talented and dedicated colleagues — whose collaboration played a huge role in the successful outcome. (My principal collaborators were Charolyn Kapplinger, John Krenz, Shirley Keran, Bob Granvin, and Roger Shimada.) I am thankful to MECC for assigning me to this project as the lead designer and project leader — and for giving me the latitude to steer the project as I saw fit (most of the time). I am thankful that Don Rawitsch, Bill Heinemann, and Paul Dillenberger invented the first brilliant version of the game, which spawned all subsequent versions. And I am thankful that millions of people have been able to play and enjoy this game — and that so many of them fondly remember the game after all of these years.


Biggest invention of the last 500 years

You’ve never heard of Yuji Ijiri. But back in 1989 he created something incredible.

It’s more revolutionary than the cotton gin, the steam engine, the PC and the smart phone combined.

When people look back hundreds of years from now, only the printing press and the Internet will have it beat for sheer mind-boggling impact on society. Both the net and the printing press enabled the democratization of information and single-handedly uplifted the collective knowledge of people all over the world.

So what am I talking about? What did Ijiri create that’s so amazing?

Triple-entry accounting.

Uh, what?

Yeah. I’m serious.

But don’t feel bad if you slept through the revolution. It wasn’t televised or posted on Reddit. When Professor Ijiri died in 2017, most people didn’t catch his obituary. His most famous book, Momentum Accounting & Triple-Entry Bookkeeping, has a grand total of zero reviews on Good Reads. So you’re not alone if you missed it.

Go ahead and Google “triple-entry accounting” and see what comes up.

232,000 results. In the age of Google that’s like not existing. Minor Instagram celebrities and memes invented last week have more hits.

The number two link is a Wikipedia article that’s barely a stub. The fourth down is a paper from 2005. Ijiri isn’t even mentioned on the first page.

So why is it so important if nobody knows about it?

Because the first application for it didn’t come along until 2008 and so it’s real impact is still to come. But make no mistake, it’s coming like a tsunami that will remake every aspect of our lives and societies.

How do I know?

To understand why, you just need to know a little about history’s sexiest subject.

Accounting: History’s Sexiest Subject

Here’s the thing: Without accounting, you wouldn’t be reading this article on your iPad, or driving to work in a new car or listening to music on Pandora. Without accounting there’s no commerce, no trade. Without commerce there would be no planes, no trains, no tractors, no steam engine, no skyscrapers or computers. There would be no nation states, no boats, no shipping containers traveling all over the world ferrying goods from the far corners of the Earth.

In fact, without accounting you’d still be subsistence farming or hunting in the forest.

You see, there’s only been two accounting breakthroughs in the entire history of the world before now.

Both of them presaged a massive uptick in human societal complexity and innovation.

The first breakthrough was single-entry accounting.

Before that we were running around the forest chasing animals, following the moon or farming. Our prospects were limited. You lived with your tribe or clan and you hunted and gathered. Your parents before you did the same thing and theirs before them and theirs before them in an endless cycle down through the years.

Accounting broke that cycle.

For the first time we had the ability to bootstrap ourselves into a different kind of life, one that didn’t involve every single person on the planet living hand to mouth.

The earliest examples of single entry accounting go back to the Sumeriansabout 5000 years ago on cuneiform tablets. Yeah, those Sumerians, the ones who gave us the Epic of Gilgamesh, the world’s oldest recorded story. These systems were simple but effective. You just put one note in a ledger. So-and-so owes me $50.

Once you can keep track of who owns what, trading starts to happen at a much larger scale. That’s why the kings and queens of ancient times could build castles and establish professional armies and create great wonders of the world.

But single-entry accounting isn’t very good. It can only take you so far. The only accountants back then were the king’s brother because you really had to trust that guy. All he had to do was wipe away a line in the ledger and that money no longer existed. There was no way to verify, no way to audit, no way for two people to agree.

That meant trade was a family affair. The kings and queens traded with the dukes and mostly they kept all the money for themselves and left the rest of us to starve. Powerful clans dominated the Earth.

Double-Entry to the Rescue

It wasn’t until the 1400’s that the single-entry system really started to show its age though. For the first time, you had boats that could travel from near and far. That meant they could trade with people they’d never met. Since boats became the most important way to carry goods to distant lands, port city-states like Venice became the center of the ancient world and the nexus of world trade. But with so much trade going on, single-entry accounting showed even more cracks. It’s easy to make data entry errors. People’s books were soon a hopeless mess of conjecture and lost money. The more trades that stacked up, the more errors.

Multiple civilizations from the Italians in the 1300’s, to the ancient Koreans, to the second Muslim Caliphate all developed versions of a double-entry system. The systems never caught on though. And that brings us full circle to the most important invention in the history of man: the printing press. Without it, knowledge remained siloed. People would develop a breakthrough in one area of the world, only to die off and leave no trace. The press allowed people to make hundreds of thousands of copies and that meant knowledge survived and circulated, instead of dying with its creator.

By the 1400’s, a Franciscan friar finally codified the double-entry system and it swiftly became the standard with Venetian merchants. All thanks to the preserving power of print.

This opened up world trade. Now goods could flow easily to all the empires of the old world.

Fast forward to today and we still use a double-entry system. If you do your taxes in TurboTax or keep your books in Quickbooks you’re using double-entry.

But now those systems are starting to show their age badly.

Take a company like Enron. They did all kinds of things to cook the books. They managed to hide billions in debt.

And that’s where Triple-entry Accounting comes in.

The Dawn of Triple-Entry

Most people missed Professor Ijiri’s breakthrough because it straddles two equally obscure and poorly understood fields: cryptography and accounting.

It’s rare enough to find a person who’s versed in one of those disciplines, never mind both. Without that kind of interdisciplinary understanding, it’s no surprise that his invention went over like a lead zeppelin.

There’s also the little problem that he was incredibly ahead of his time. Encryption had not yet entered the public consciousness. If you work in information technology you might remember the Clipper chip scandal, where the NSA tried to mandate a backdoor in all encryption. That was in 1993. Ijiri published his work in 1989. It passed mostly unacknowledged by the general public.

In 2005, came a more well-known example of a triple-entry accountingsystem, created by famed cryptographer Ian Grigg.

Then, in 2006/2007, a self-taught programmer likely stumbled on one or both of the systems. He was working on an alternative currency, with no centralized trust.

It was called Bitcoin.

It was the first working example of triple-entry accounting.

Now I know what you’re thinking. Please not another story on how Bitcoin changed the world. But here’s the deal, whether Bitcoin survives or fails, the blockchain will continue to thrive and flourish, as will triple entry accounting. Corporations and governments that initially scoffed at it are now racing to adopt its power. (Oh and I don’t think Bitcoin will die either. It’s here to stay, like it or not haters.)

At the recent Consensus summit in New York City, I counted Deloitte and Touche, IBM, Intel, Microsoft, Deutsche Bank, US Dept of Health and Human Services, The World Bank, the Hong Kong Monetary Authority, Toyota, Fidelity and Citi among the attendees. JP Morgan announced they were incorporating the anonymity protocol of Zcash into their own enterprise blockchain, an idea which would have seemed absurd only a few years ago.

But here’s the thing: We’re only at the caveman stage of what we can do with blockchains.

We’ve been playing around with funny money, making currency and trading it, but the utility of these currencies in the real world has so far remained limited to speculators and early adopters.

But blockchains can do much, much more, as can the cryptos that drive that innovation.

One Pill Makes You Larger

Triple-entry accounting and by extension blockchains and crypto are a way of agreeing on objective reality. It’s not the objective reality. That’s a philosophical black hole we’ll ignore for now, but it’s an objective reality. It’s two parties agreeing on a version of past events. The third entry in the system, entered into the blockchain, is both a receipt and a transaction. It’s proof that something happened between two parties, which goes beyond the receipts that each party holds in double entry.

But all that is theoretical. Why does it matter? What can you do with it?

So many things.

I Won the Popular Vote

How about voting?

We have tons of problems with voting today that we’ve hedged against in advanced democracies and completely failed to deal with in banana republics, third world countries and authoritarian regimes the world over.

  • How many people voted?
  • Did they already vote?
  • Was their vote recorded properly?
  • Did their vote reflect their intention?
  • How can we audit it all later, easily and quickly?
  • Can we trust that audit?

And that’s just the tip of the iceberg.

There’s also the little problem of counting those votes accurately. Even in 2017, that’s fraught with error, subject to the the honesty of the vote counters and the checks and balances in the systems to prevent fraud. We also have proprietary voting machines that we can’t publicly audit or trust, where countless failures in the chain of custody of the machine could see the votes altered.

Blockchains can change all that by ensuring that votes are provably correct and publicly auditable.

What we’ll see in the not too distant future is the merger of what’s called E2E voting systems (end-to-end verifiable voting, and blockchain-based systems.

E2E means that everyone in the entire population, down to the individual voter, can verify the results. Every individual knows his or her vote was recorded accurately and they can check it themselves. They don’t have to trust someone to tell them it was correct like we do today. They can also see that everyone else cast their vote with certainty. But despite this amazing transparency, it still preserves the all-important secrecy of ballots, which prevents coercion and group-think.

Today we can’t do any of that (other than keep ballots secret). We can generally attest to the integrity of elections but we can’t prove it, which is why a certain person who won an election recently sometimes claims he won the popular vote by two million. E2E changes that. Politicians may not like it, because they have a stake in being able to say the votes are rigged, but too bad for them, because the rest of us want absolute voting integrity.

There are multiple examples of E2E systems in use today, such as Helios developed by Ben Adida of Harvard’s Center for Research on Computation and Society. It’s not ready for the high stakes of a national election yet but it’s been used on the small scale for campus wide votes. Think of these as alpha tests.

What about voting on the Internet? That’s where the blockchain comes in. If you can marry an E2E voting system with the efforts behind decentralized identity and reputation systems, you can deliver E2E distributed voting too, aka “Internet voting.” That’s one of the goals of the Cicada project and other decentralized platforms like the recently formed decentralized Digital Identity consortium.

Bye, Bye Enron

What else can you do with triple-entry accounting?

One of the simplest and most promising use cases is for issuing stock.

Let’s say you have a little company that we’ll call Enron. It’s doing tremendously well. You’ve got a million shares of stock, say 10% of the total shares.

At least you think you do. You’ve got an official looking piece of paper that says you own a million shares. That’s legit, right? It has a stamp and everything.

Except you don’t really, because they were cooking the books or issuing double shares. With today’s double entry systems it’s a security problem to give you access to their books. They live behind the corporate firewall.

But triple-entry changes all that. We can issue stock and you can check your stock against the blockchain. Now you don’t need access to their books to verify that you actually have 10%. You can look at the chain, see that there were 10 million shares issued and that you have a million, so you have 10% for realz.

That might not stop them from completely cooking the books, but it goes a long way towards stopping lots of financial fraud that’s possible today. When you get stock, you’ll know you didn’t get double-issued stock.

Still, even with all that, you might not believe it because Bitcoin and cryptos have a lot of negative press swirling around them, so let’s look at a few of the most common arguments against them, just for kicks.

But…But Tulips

You know this story. Bitcoin is a Tulip craze and it has no value. Only fools and computer geeks see it as worthwhile.

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This is such an asinine comparison. It demonstrates a complete lack of critical thinking. It’s nothing but a knee-jerk opinion formed after casually reading an article or two on Reddit and calling it a day. That’s not thinking. That’s a lazy mental heuristic, a poster child in the Illustrated Book of Bad Arguments.

Here’s the deal: Tulips actually had no inherent value. They were just flowers. They were pretty and that was about it.

Bitcoin is founding an entirely new method of frictionless transactions, spawning new decentralized app platforms that you’ll be using every day in three to five years.

Don’t believe that? Take Status for example. Status just raised $270 million dollars in an ICO to build a Decentralized WeChat. (FYI, it might be a $100 million, as the reporting on this ICO is all over the place.) Now people are right in saying that just because someone raises money doesn’t mean that has any value. You may hate or resent Status and think they suck. Doesn’t matter. But their approach is smart. That means it could very well be successful. The reason is WeChat.

WeChat isn’t that well known in the US, but it’s used by 890 million people in China and greater Asia. It started as a chat app but now it’s the ultimate mobile platform, with its plugins powering everything from buying tickets to comparison shopping to finding out how crowded an area is before you go shopping. People in China use it for every aspect of daily life.

The only problem is WeChat can’t really spread beyond China because it’s fraught with centralized control by an authoritarian regime. Decentralizing that trust will go a long way to revolutionizing mobile computing and bringing that power to the Western world.

WeChat is like Paypal / Slack / Stash / Viber / Facebook / Twitter / eBay / Instagram / Priceline / Hotels.com / Yelp all rolled into one.

If you think all ICOs are Ponzi schemes and you can’t see the potential in a decentralized WeChat then you can’t see the potential in much.

If Status is successful, that $270 million is going to look like a drop in the bucket.

Nerds!

But only nerds like cryptos!

You mean like when computer geek Jeff Bezos was starting a little company called Amazon to sell books on this thing called the Internet that nobody but nerds understood? I mean there are all these book stores I can go to, why would I need that?

Or how about when Steve Jobs and Woz were hacking together a computer in their garage?

What the hell is a computer people asked? Only nerds need that.

Neither the Internet or computers had much value then. But those pioneers were smart enough to see into the future, projecting out far enough with intellectual curiosity and seeing the potential while people still scoffed at them.

That’s what us geeks see in Bitcoin and cryptocurrency and blockchain right now, even if others are missing it.

But…But It’s Unstable

You know this story too. Cryptos are unstable. They can go to nothing overnight. You can lose a lot of money.

This argument tells you absolutely zero.

Anything can go to nothing over night.

Nothing is immune. Not central markets or decentralized ones.

Housing crisis anyone?

Stock market crash in the 20’s, 80s, 90s?

Here’s the Dow Jones over a 100 years to illustrate:

That is a long-term trend up. Awesome. But it’s not the whole story.

You see those big downward spikes? They’re really smoothed out on this long timeline, but those are times when people lost a lot of money. If you’re in one of those times, it can hurt bad. It looks a lot steeper zoomed in.

Let’s take a look. Here’s the zoom in on the 1920’s crash out.

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Looks a lot different from that perspective, right?

How about this headline from the 1980’s crash, dubbed Black Monday, when traders came into work to find the market dropped drastically overnight?

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That’s what trading is. High risk, high reward.

But while everyone else is worried about wild swings, traders love it. They know that downward spirals are opportunities while novices cry about market manipulation and unrealistically expect things to go up forever.

Bitcoin looks wild in the short term, and it is, but it’s long term trend is up.

Investing when everyone else thinks something is worthless, and hanging on tight when everyone else is losing their minds is how it’s done. That’s why Warren Buffet is rich and you’re not. He bought Coke when everyone else though it was going bankrupt. That’s what he does. That’s all he does. He finds good companies that are undervalued and buys them up while others are fleeing.

As Rudyard Kipling wrote in his famous poem If:

“If you can keep your head when all about you,

Are losing theirs and blaming it on you,

If you can trust yourself when all men doubt you,

But make allowance for their doubting too…

Yours is the Earth and everything that’s in it.”

But…But It’s Backed By Nothing

One of the biggest and most ridiculous claims against cryptos like Bitcoin and Ethereum is that they have no inherent value except that we believe they do. I can’t tell you how many times this shows up in comments on any article written on this subject. Read my lips:

Nothing has any inherent value except the value we put in it.

Well maybe food, water, shelter does, but beyond those basics, what else? Not much. Even gold and diamonds are just some shiny shit we dug out of the ground and we liked it because it shimmers. No real value and barely any utility.

Your USD is backed by nothing. It only has value because we all agree it has value.

But wait, you say, it’s backed by the US government. Sure, but what’s that really worth in a serious crisis? How’s that working out in Venezuela right now?

We tend to think of trust as a fixed trait. It’s not.

Trust is a moving concept.

If my government was stable for fifty years and then a bunch of morons get elected who do stupid shit, that trust is now worth shit, as is their backing.

A backing by a central entity is no guarantee of anything. At multiple points in history, currencies from major industrialized nations have gone into a tailspin despite that backing. Think Germany before WWI, which led directly to WWII.

It can even happen here. And it has.

J.P. Morgan once bailed out the U.S. Treasury because they were broke.

But this is the modern world you say. Nothing like that can happen again.

Sure.

Last I checked we’re only seventy years out of a war that consumed the planet, cratered multiple economies and currencies and killed 50 million people. That’s barely a picosecond on the grand scale of human time. If you think we’re so evolved since then, as multiple governments across the planet wage war on the post-world war alliances that have bound us together for seventy years, then I don’t know what to say other than you believe in fairy tales about human nature. Human nature is the same dark creature it’s always been and it can turn on us in a second.

But wait you say, the USD has inherent power as a store of value and a means of transacting business!

But Bitcoin and other cryptos are now more and more valuable every day as they fund companies through ICOs and through the thousands of decentralized apps that companies are building for them right now.

Tomorrow they’ll be even more valuable because they’ll power voting, gaming, issuance of shares and even security and reputation banks.

That’s a hell of a lot more valuable than just a means to buy Beanie Babies and iPads and Snickers.

Oh, and Bitcoin’s long-term trend is up. The US dollar’s long-term trend is down. It bleeds value little by little, slowly eroding your purchasing power like cancer eating away at you for years without you seeing or feeling it. It’s called inflation. One day you will wake up and find your dollar is worth a lot less than it once was because it’s designed to decrease in value over time.

Yesterday’s Snickers cost 5 cents. Today it’s $1. Tomorrow it will be $5. Your dollar is still a dollar.

Bitcoin and Ethereum are not just any other asset, like gold or silver or stock in a company.

They’re shares in an economy.

It’s just hard to see right now because it’s a banana republic economy.

But in five to ten years, it will be a third-world economy and then a second-world economy and then a first-world economy. And everyone will be wondering, why didn’t I see that coming? I wish I got in back then when everyone was missing the forest for the trees.

Imagine buying shares in the United States when the first settlers got here and swindled the Native Americans out of Manhattan.

NOTE: I think several people are correct in pointing out (privately and in comments) that Ian Grigg’s triple entry system is more directly related to triple entry accounting as Bitcoin defines it and as I define it in this article. And Grigg is vastly more influential in the crypto community, as this video from Balanc3 at Consensys shows. This article should not be seen as taking away from Ian Grigg’s contributions or efforts or ideas. He deserves all the credit in the world. However, I feel that the concept of looking at accounting in three dimensions goes back to Yuji Ijiri in 1989, even if the substance of what he was tracking with that third dimension is different and even if it preceded much of the work that came about with encryption, so I feel it is a fair attribution. However, attribution of ideas is a tricky business because usually when an idea is ready to pop it is sitting out there in the collective unconscious and multiple people hit on it in different ways. As always people are free to disagree with me. Also, if you disagree with this, it’s only one point of many in the article, so try not the throw the baby out with the bath water. Then you’re just missing the forest for the trees again.