CryptoKitties could be the single most important application of our generation

I hate cats! In my opinion they are hideous, attention seeking creatures. That being said I spent over £50 on digital kittens, called CryptoKitties during this week.

The title might be click-baity (it is) but the fact is CryptoKitties is a revolutionary application disguised as a cutesy game.

But first of all a quick overview for those of you who been in a coma the last week

What is CryptoKitties all about?

Their website’s tagline is: “Collect and breed digital cats”. So basically a cat based tamagotchi, right? Well yeah, except you can’t feed them, can’t play with them, can’t really do anything with them really besides mating.

CryptoKitties are collectible digital creatures on the Ethereum blockchain. The only way to own them (if you are not one of the very early users) is to buy them using ETH.

Every 15 minutes a new kitten enters the game’s marketplace to ensure a constant supply. These cats are called Gen 0. They are priced at the average market price of all the cats been sold in the marketplace during the past 15 minutes. Every sale is done via a reverse auction, where the price declines as the time goes by.

Once you own a kitten you can do exactly two things with them:

• Sell them on the marketplace
• Breed them with other kittens. The game call this “Siring”.

When you put up your own kitty for siring you can set a starting and ending price for it. If someone decides your cat is a good partner to breed with they pay the price, you get the Ethereum and they get the offspring. Of course you can do the opposite to expand your litter.

When a new kitten is born it inherits some of the attributes of the parents, plus it gains some new, random ones, making it a completely unique creature.

Ok, it’s pretty cute, but why is it revolutionary?

True Ownership

On the surface it may look like a silly game with very limited functionality. It did however accomplish something that all of the decentralized initiatives struggled with so far: It demonstrates digital ownership of digital goods on the internet in a way that is easy to understand for the less technically minded.

If you think about it, this is the first time, since the beginning of the internet that you own a piece of information (the genome of your kitty) that is yours yet accessible by anyone. Your ownership is always guaranteed by the blockchain no matter what.

Of course the sentence, above is completely false. You do own Bitcoin, you do own Dash, you do own Ethereum. Thats great, can you explain it to your mother?

Did you just spend $16k on a Bit-Whaat? Are you f*cking crazy, son?

With the kitties its a similarly hard explanation but at least there is something to show to her.

Rarity, as defined by the community

While all Bitcoins are created equal the same does not apply to CryptoKitties. The Kitties do have cutesy graphics attached to them as well as a list of attributes. None of the attributes really make them better or worse in the game (except for the cool down period attribute), yet people on the marketplace are willing to pay premium for certain looking kitties.

This is human nature at its best. We, as a species tend to decide what qualities are desirable and what is not.

What is remarkable is the fact that in the case of CryptoKitties this attribute based valuation happened in a record time, less than a week.

Kitties Against the Machine

Once the game hit peak it took the whole Ethereum network with it. Actually that is false. The network was fine, it did what it designed to do.

It did however congested the network to the level when transactions with low gas prices would stuck in the system indefinitely, at least until the hype dies down and the backlog clears.

It is all and well, Ethereum was designed with this in mind. But what if the hype never dies down? What happens with those transactions?

A lots of people who use ETH on a day to day basis were really angry about CK. I do understand the frustration. Your trades are not going through, you lose money.

But it is a good thing for the blockchain technology in general. Issues like this push the tech forward for a bigger and better future. If Twitter did not suffer from hour long outages back in the day we may not have such advanced cloud infrastructure and databases as we do today.

The future

I’ve asked my designer how long would it take for him to do a quick design for CryptoPuppies. He said, at least a week. I said its too long, by that time there will be plenty of clones out there.

And I believe that. The first clone might already be out there. And there will be many more, because CryptoKitties was a great money maker for the developers.

While some of these will be straight clones, some will improve on the original concept, making it more and more feature rich. Some will pivot from the original collectible style game design to create something entirely different. Eventually they will end up implementing solutions, why the Ethereum network was originally created: Rich, decentralized applications on the blockchain used by actual people.

Footnote: I’m the co-founder and developer of the popular cryptocurrency portfolio tracker app, f0l.io. If you are into cryptocurrencies you should definitely check the app out