Blockchain in the Real World: CryptoKitties
This series will take a look at some examples of blockchain technology being used in the real world. There are a variety of blockchain projects out there with live, working products and services you can use today, and we want to highlight them here!
Background
CryptoKitties! How can you not love them? CryptoKitties is a decentralized application (dApp) built by AxiomZen, a Canadian innovation studio. It was one of the first dApps built on Ethereum to gain widespread attention. It harnessed the power of cuteness to showcase some innovative aspects of blockchain technology that open the door to all sorts of use-cases. Most importantly for the purposes of our Blockchain in the Real World series, the barriers to entry for using CryptoKitties are considerably low — anyone with ten minutes of free time can figure out how to own a CryptoKitty without actually understanding blockchain technology. Users only need to download the MetaMask Chrome extension and buy and transfer some Ether — no need for alt-coin exchanges, offline wallet management, or any technical background.
So what’s the point? CryptoKitties are often compared to beanie babies or baseball cards: they’re really not much more than a collector’s item, but what’s unique is that they’re the first ever digital collector’s item that allows someone to prove ownership. You can prove to me that you have a Beanie Baby by physically showing it to me. Similarly, ownership of a CryptoKitty is indisputably stored on the blockchain, so even though there’s nothing physical, it meets all the requirements of a collector’s item — novelty, scarcity, and veritable ownership.
ERC 721
While CryptoKitties is entirely fair game for nontechnical people, it wowed blockchain enthusiasts by demonstrating a use-case for the ERC 721 token standard. Most Ethereum tokens are issued under the ERC 20 standard in which all tokens are identical — after all, if I’m using a token on a platform, it wouldn’t make much sense if my token was totally different than everyone else’s — how would we determine which ones are more valuable than others? Most use-cases for Cryptocurrency prior to CryptoKitties required fungibility, where tokens could be seamlessly exchanged for other identical tokens, just like cash. Tokens in CryptoKitties are non-fungible — each one is completely unique, so each token can represent a different cat — no two kitties are ever the same! When ERC 721 tokens are transferred, ownership of each specific token is transferred with them and must be approved by the party who previously owned the token. CryptoKitties created a secret genome process that maps unique info about each ERC 721 token to a front-end design element called a “Cattribute” (seriously, these guys have a cute name for everything! Their white paper is called a ‘white pa-purr’). Future applications of blockchain such as identity management, tokenized land ownership, gaming, and much more could take advantage of the ERC 721 token standard to provide uniqueness.
My Experiences using CryptoKitties
I spent about an hour browsing through the marketplace of kitties up for sale before finally purchasing two of them — the purchasing itself took about 20 seconds using MetaMask because the process is super easy. Once I bought two kitties, I immediately bred them — kitties that have been bred a lot recently have slower “cooldown” periods to prevent nonstop breeding, so it took about six hours for the baby kitty to be born. I spent about 0.003 Ether for each kitty, and 0.008 Ether as a breeding fee. Here are my kitties!
As you can see, the baby clearly inherited some traits from each parent.
Strengths and Challenges of CryptoKitties
No matter what happens, AxiomZen has already achieved tremendous success by launching CryptoKitties. In addition to receiving the revenue from the first 50,000 Kitty sales, AxiomZen receives 3.75% of every kitten sale. Considering people have spent millions of dollars worth of Ether on CryptoKitties, this is quite a lot. More importantly, they achieved their goal of showcasing the capabilities of blockchain technology — they advanced the ERC 721 token standard, and they demonstrated how dApps can be user-friendly. Owners of kitties should just enjoy the fun of having kitties, but who knows? They could prove to be very valuable some day. If cryptocurrency gets widely adopted in society CryptoKitties will be remembered as a historic early use-case and carry a lot of sentimental value for people like me who dedicate themselves to the advancement of blockchain technology.
CryptoKitties also demonstrated some serious challenges with Ethereum and served as an impetus for increased demand for scaling solutions such as Raiden, Sharding, and Plasma. CryptoKitties notoriously slowed down the entire ethereum network because it was so popular. It proved that Ethereum isn’t ready to handle widespread adoption of dApps, even if each individual dApp would be fully functional in theory. All-in-all, I think this is great for the blockchain community because it made scaling solutions a priority, and motivated developers such as the Hydro development team to develop their protocols to handle as much activity off-chain as possible.
Altogether
CryptoKitties will always have a soft spot in my heart. Not only is everything about it incredibly cute, it is groundbreaking for the future of blockchain technology. CryptoKitties showcased the usefulness of the ERC 721 token standard and opened the door to a user-friendly world of blockchain products while serving as the motivation for important developments prerequisite to a blockchain-enabled future.
*Disclosure: As you’ve read in the article, I am now the proud owner of the three cutest CryptoKitties of all time. I have no connection with the CryptoKitties development team, nor the broader AxiomZen parent company.