People Have Spent Over $1M Buying Virtual Cats from CryptoKitties

Launched a few days ago, CryptoKitties is is basically similar to an advanced adaptation of Pokemon cards. Here the difference is that, it’s based on the Ethereum blockchain. And this game, just like any other viral sensation, let it be Flappy Bird or 2048 is catching on in the tech world.

Developed by Vancouver and San Francisco-based design studio AxiomZen, the game is the most recent craze in the world of cryptocurrencies and likely soon tech in general.

People are spending insane amount of money on CryptoKitties. Till now, approximately $1.3M has been transacted, with a variety of kittens selling for ~50 ETH ($23,000) and the “genesis” kitten being sold for a whooping ~246 ETH ($113,000). This third party website tracks the largest purchases [of the game] made till date. Just like any other viral sensation the prices are rising quickly. Currently, the least expensive kitten will cost around .03 ETH, which is approximately $12.

The funny part here is that, now people are purchasing an asset with zero tangible utility. That’s internet for you.

It’s somewhat similar to the beanie baby trend where people were paying crazy amounts of money for stuffed animals. But if the virality of the game continues to increase, these people might have the ability to make a return by reselling or breeding their unique kittens. Else they all would be stuck holding the private keys to a virtual rare kitten when the market tanks in the next couple of days, similar to what happened with beanie babies.

There are a couple of cool things about CryptoKitties though, and setting aside the valuation absurdity it’s really a cool way for beginners to interact with the Ethereum blockchain.

Primarily, it’s essential to understand that since this game is played on the Ethereum blockchain there’s no central entity managing the game. This means players literally own their kittens. And not at all like playing Neopets where everything was kept on a central database and your pet was deleted when the company shut down, CryptoKitties is decentralized and will live perpetually on the Ethereum blockchain.

CryptoKitties is ran by a set of five Ethereum smart contracts which is written by AxiomZen and the players communicate with it through their own Ethereum address. Currently, MetaMask is the easiest way to do this. As the extension gives the users, ability to send and received Ethereum straight in their web browser. Later the users can navigate to the game’s website which is basically an interface to interact with their smart contracts so that, they can buy or sell or breed kittens.

Currently the game attracts 15% of the Ethereum network traffic. Thus, making it one of the most popular smart contracts on the network. Even EtherDelta, which is a well known exchange, comes only after this game attracting 8% of the network traffic.

This huge flow of traffic is making it near to impossible to play the game. And most of the transactions are taking so long to get confirmed and that too even after many attempts.

Even Vitalik Buterin, the founder of Ethereum like CryptoKitties.

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