CryptoKitties: What Do They Mean for the Future of Blockchain Technology?
Even at the pinnacle of their popularity, would anyone have bought a Pog for $140,000?
On the surface, CryptoKitties seem like this generation’s version of Pogs or Tamagotchi. And indeed, like those aforementioned staples of the ’90s, they appeal to collectors and casual players alike. Physical items like Pogs, tamagotchi, baseball cards, stamps, etc. are all valued based on their scarcity. The more scarce and rare something is, the higher its potential value. Digital items like music files or jpg images have no real value because as soon as they’ve been made available to copy, anyone can snag them from the internet and store them on their own device, accessing them whenever they want. That is, until now.
The advent of blockchain-based systems means that digital scarcity is now possible and provable. Like Tamagotchi, CryptoKitties could be said to be “alive” — in a way. They can be bred with other kitties to create new, unique combinations of attributes. Within a few “generations” anyone could have a completely unique creature. Unlike the popular Japanese toy, however, owners of CryptoKitties don’t have to worry about feeding them or return from vacation to find that their digital pet kicked the bucket in their absence.
The $140,000 Kitty was sold as part of a charity art event. And obviously, not everyone is paying (or charging) $140,000 for Crypto Kitties. So what are these strange creatures and what’s the attraction? According to a Medium article written by CryptoKitties, “It’s a digital, breedable, unique artistic asset stored on the blockchain. It’s a cute cartoon cat that you can bring into other experiences and games. And it’s a proof-of-concept for a technology that will change the world.” Collectors can work at breeding cats for specific attributes or to discover “Fancy Cats,” which are limited and harder to come by. Doing a quick search for “cryptokitties fancy cat” spawns tons of posts about Fancy Cat recipes, hints, and humblebrags.
Like Pogs and Tamagotchi, it seems CryptoKitties might also be little more than a short-lived fad. While the game is still live, and the CryptoKitties Twitter account is still encouraging people to chase Fancy Cats, Fortune magazine put the game’s time of death somewhere around May 2018 after transactions fell from 1.3 million in December of that year to 115,000 just five months later. CryptoKitties also ran headlong into the problem of scaling. Based on the Ethereum network, which has long been criticized for its struggles with scaling, users of the system were faced with extremely high transaction fees when there was an uptick in activity. CryptoKitties founder, Bryce Bladon, told Buisness Insider in early 2018 that his team had “made numerous product and design decisions to reduce the number of superfluous smart contract interactions. We’re delivering numerous ways to engage with CryptoKitties outside of buying and breeding them.” With the benefit of hindsight, it’s probably safe to say their efforts didn’t pan out the way they’d hoped.
It’s a shame because CryptoKitties was the first introduction to blockchain-based technology for many people. In an article on HackerNoon, Robert Durst talks about his father getting into the craze having barely heard about cryptocurrencies and scarcely understanding the basics of DLTs. They were a way for the un-technologically minded to wade into this strange new world.
Though these digital Beanie Babies may have completely fizzled, what they represent: the first effort to utilize blockchain-based systems for recreational use, is extremely important. These weird cartoon cats may pave the way for the first lasting blockchain-based game. As Durst points out in his article, “With real money on the line, even the most ridiculous crypto games are targets for hacks/exploits.” So when that game comes, it’s truly a case of buyer (and gamer) beware. Still, with technology this versatile, it’s only a matter of time before we’re using it for more than just financial transactions. Maybe we’ll find ourselves bidding on rare digital Pogs.