What the heck are cryptocollectibles, anyway?

Every time we write an article about cryptocollectibles, the little red line of every writer’s nightmare appears under the word. “Correct to crypto collectibles?” it asks, as we click “ignore,” “add to personal dictionary,” and scream, “no seriously, it’s a real word!!” at our computer screens. Our coworkers are getting tired of us.

Part of being on the cutting edge is fighting autocorrect, but it’s not the only consequence of wading into waters still vastly unexplored. Even some of our players don’t know a lot about the realm of cryptocollectibles, which is why we decided to write this post!

The instinct to collect a whole bunch of a certain thing is an inherent part of the human psyche, and goes back in time about as far as we can remember. But when we talk about the origin of collectibles, we’re usually talking about manufactured collectibles, and those go back to the beginning of the industrial era. In those days, collectibles were given away when a consumer purchased another product as an incentive for them to choose that product. Cigarettes might have baseball cards in them, for instance, or milk bottles would have decorated bottle caps for kids to collect. In the 1960s, companies started creating collectibles that were sold for their own sake, often as investments, and usually in “limited quantities” (though those quantities were often huge). Think Beanie Babies, Pogs, and even baseball cards, which made the jump from being an added giveaway to a product of their own.

Blockchain changed the ecosystem

Digital collectibles weren’t really possible until the advent of the blockchain, because digital material was too easy to copy. Proving ownership was next to impossible, so the scarcity required to create value was impossible to enforce. Some examples did arise in the 90s and early 2000s, but the collectibles all lived on private servers, like Neopets or Eve: Online. If anything happened to those companies, the collectibles would become inaccessible or worthless (or both).

So in comes the blockchain, and suddenly users have a way to incontrovertibly own digital assets, and asset creators have a way to ensure digital scarcity, the two factors required to make cryptocollectibles a thing.

The first cryptocollectibles were probably Rare Pepes (though Spells of Genesis gave them a run for their money). Rare Pepes started as a meme. Original artwork with the character Pepe the Frog was created, and collections of digital versions were traded as if they had actual value, often listed on sites like eBay. But the whole thing was a joke, since all you could actually trade or sell was an easily copyable digital image.

That all changed when some genius created the Rare Pepe Wallet (sadly now defunct), allowing users to buy and sell their Pepes on the blockchain. Suddenly, a user could prove that this specific digital image was owned by them, which meant they could sell it more easily. Unfortunately, they could only sell it using Counterparty or Pepecash cryptocurrencies, so it wasn’t likely to explode as a phenomenon (though it did pretty well for a niche market).

The early days of cryptocollectibles

It was around that time that the CryptoKitties team began seriously talking about getting into digital collectibles. We were struck by how difficult it was to access something like the Rare Pepes. We didn’t think users wanted to invest in a currency just so they could own a collectible — the friction was way too high! So we started planning how users could own adorable cats with currencies that are already well established, and which they might already own. That’s why we chose ether (ETH) as our currency.

While we were still in the ideation phase of CryptoKitties, CryptoPunks hit the scene. Each of the 10,000 unique CryptoPunks consists of an eight-bit image of a person’s face. They were originally given away for free to anyone with an Ethereum wallet, and now they can be bought or sold, also using Ethereum.

When it first launched we were worried it might give us a run for our money, having beaten us out the gate. After all, when it comes to exploring new technology, first is sometimes the only important marker. But while the concept is pretty similar to CyrptoKitties, CryptoPunks was really testing the possibilities of cryptocollectibles. Was it possible to build a network of art fans who would trade and sell digital assets?

The answer was yes, and we took that good news and ran with it in a different direction, adding gamification to the model that CryptoPunks and Rare Pepe had proven. Our modular art, breedable tokens, and numerous gamified mechanics helped us create a product that was more than just a copy of what had come before us, though we often feel like we were standing on the shoulders of giants!

The giant’s playground

CryptoKitties is thrilled to be in good company with other initiatives that are taking off in new directions from the original days of cryptocollectibles.

Over at dada.nyc, a variety of artists have come to the blockchain with numbered, limited edition artwork that you can buy, sell, trade, and digitally display. Dada even entered into a collaboration with Kitty Hats so your Kitties can own and display their own digital art!

Launching this year, Maecenas will use blockchain to open up the rarefied world of fine art. Instead of taking on costly loans with steep interest rates to procure expensive pieces, galleries and collectors will be able to sell micro-shares of their existing collection to raise funds for new acquisitions, minus the lofty premiums of middlemen brokers. Maecenas will specialize in masterpieces worth over $1 million USD, so even humble art lovers can boast about owning a Warhol or Matisse.

Another company, Codex, is taking aim at expensive collectibles, handling everything from jewellery and art and rare cars. They’re also developing Biddable, an app to enable buyers to use cryptocurrencies in art auctions.

Into the future

So that’s the history of cryptocollectibles. A lot of new offerings in the space make the mistake of tying their product to brand new currency, which demands a much higher level of investment for most users. And most collectibles don’t get too creative with breaking from the mold. But there are some exciting projects competing with us in the space, and every new one raises the water and floats all our boats, as we prove this crazy dream could someday be a reality for every consumer. Not just those who know what ERC-721 is.

If you’ve never tried CryptoKitties, why not get your very first cryptocollectible? We’re sure it won’t be your last.

Written by Wren Handman