“Crypto Kitties” is supposed to be a normal game. In the game you can buy, raise and even breed your own virtual cats, with each cat being unique. The idea was great, the game was nicely done, and it went viral. According to the company behind the game, more than 22,000 cats were sold for more than US$3 million.
The average price of the cat was more than US$100 and someone paid almost US$120,000 for a single virtual cat. Crazy.
There are lot of positive aspects of this hype. However, let me focus on a few negative aspects and explain how the “Crypto Cats” played with the “Ethereum mouse”.
What happened?
All the transactions created by the game have exaggerated two already known blockchain issues. These issues were well known before:
- Blockchain suffers from scalability issues
- Public blockchain application has a huge co-dependency on other applications running on the same system
Neither of these things are surprising but, combined, they create a really nasty output.
The “CryptoKitties” game was built on the Ethereum blockchain platform. The whole cats-hype has produced a huge number of transactions on the blockchain. Blockchain transactions are not the fastest anyway. They are secure, they are immutable, they are transparent and a lot of other good things, but they are not fast.
The huge number of “CryptoKitties” transactions, together with all the other transactions on Ethereum, have clogged the network. At one point, we had almost 30,000 queued transactions waiting to get picked up by nodes. At one moment in time, 15% of the Ethereum network was busy with the CryptoKitties Smart Contract.
The chart above shows the transaction backlog in the last week. There was almost 30,000 transactions waiting in the queue. The good thing is that it is coming down in the last days and it’s down to 1,500 transactions now.
This huge number of queued transactions has triggered the transaction price issue. The nodes are picking transactions based on the gas level you choose. In order for your transaction to be processed, you had to increase the gas level. Which basically means that your transaction just got more expensive. To be more precise, it became five times more expensive thanks to “CryptoKitties”, as visible in the chart below.
How this influenced non-CryptoKittie transactions?
If you submitted a transaction on Ethereum, it would probably be in queue, and you would wait for 20–30 minutes for it to be processed. After a while, your transaction would simply fail. If you re-submitted it, you would need to put more gas to it. Which basically means paying a higher price for your transaction. This was an excellent deal for the miners, who got rich during that time.
If you’re a company who had an ICO in that period, you would see loads of transactions being rejected and your potential investors moving away. If you’re a company running your product on blockchain, you would have a problem explaining to your clients what’s happening with their transactions.
What does this mean for us?
Although I was aware of the scalability issues of the blockchain before, I was still disappointed with the performance of the network during those days. It is the synergy of scalability problems and the co-dependency issues that produced this effect.
There are a lot of articles out there listing the positive sides of blockchain. I’m not denying those and I really appreciate that there is blockchain hype. After all, Ethereum “survived” the hype. Blockchain has “healed” and “regulated” itself again. Which is honestly an amazing achievement.
However, side effects like these may prevent really good projects from using a public blockchain. There are several possible solutions to these issues. We in Chainium already deal with these congestion issues. But more about that in my next article…
Chainium has rebranded to Own. For more information about our brand change please read this medium post.
