Itty Bitty Kitties Are Killing Ethereum

Ethereum has been hailed as “the world’s computer”, but now the Ethereum network is being brought to a screeching halt. What is it that has brought Ethereum to its knees? CryptoKitties.

That’s right, the Ethereum network has become slow and congested because of virtual cats.

What is CryptoKitties and What is it Doing to Ethereum?

“CryptoKitties is a game centered around breedable, collectible, and oh-so-adorable creatures we call CryptoKitties! Each cat is one-of-a-kind and 100% owned by you; it cannot be replicated, taken away, or destroyed.”

Think, Tamagotchi for the age of blockchain. The app, which uses Ethereum’s blockchain to create a public, shared history of cryptographically unique furry friends, is Ethereum’s most popular. Users have spent at least $6 million total on breeding, buying and selling the in-game items. The average cat is trading for $100 in Ether.

Why are we talking about digital cats?

Well, the popularity of the app and rapidly growing Ether transactions associated with the app are clogging up the Ethereum network.

Right now, about 20% of all Ethereum network traffic is dedicated to the game,
making it the most popular smart contract on the network. To put this in perspective, number two with about 8% of network transactions is EtherDelta, a popular decentralized token exchange where many newly launched tokens are traded.

According to Blocktivity, the Ethereum blockchain is currently running at 100% maximum performance with 23,322 unconfirmed transactions, or overflow transactions that are waiting to be processed. This means people are waiting in a very long and growing queue to send money.

This traffic is making it difficult to play CryptoKitties. The company stated:

“Due to network congestion, we are increasing the birthing fee from 0.001 ETH to 0.002 ETH. This will ensure your kittens are born on time!".

This congestion doesn’t just affect crypto kitties game, if negatively affects user experience for anything built on Ethereum, or any business that accepts Ethereum. This can lead to many unforseen problems.

Some ICO’s have announced they were delaying their launch due to the Ethereum network congestion and fundraising concerns about user experience while in the contribution phase.

In the summer of 2017, several ICO’s launched. During those launches, so many people attempted to donate to the fundraise that similar congestion occurred, though these were more of a flash congestion of a few hours or days, not sustained network congestion as we see now with CryptoKitties.

While Ethereum has been exciting to watch, this game highlights the glaring reality of the inability of the current Ethereum and Bitcoin blockchains to compete with the legacy global financial network.

Over the past 6 months, several businesses that have built upon Ethereum have come to this same realization.

Companies such as Bitspark, Micromoney, Cryptviser, Bankcoin, Eristica, and others have all announced the switch to Bitshares, a commercial/industrial blockchain technology capable of processing transactions on a mass scale.

After looking at their options and developing on the Ethereum, Waves and other platforms, these companies all came to the conclusion that BitShares technology is the best option for their business scalability, customer experience, and real time operation.

CryptoKitties is a great application that highlights the versatility of Blockchain usage, however it has shined a light on the deficiencies of some current industry technology.

Whether you like it or not, CryptoKitties are here to stay.

Enjoy your kitties. Meow.