Crypto

Over $1M Spent Buying Virtual Cats on Ethereum Blockchain

December 7, 2017

The crazy cat lady has evolved to a whole new level: a million-dollar level. Launched only a few days ago, CryptoKitties is a digital platform that works in a similar nature to the 90s craze of dealing Pokémon cards.

The platform, built by design studio AxiomZen, is the first-ever to be built on blockchain technology.

It is the latest craze in the cryptocurrency world, with people spending a huge amount on the platform. In the three days since its release, roughly $1.3 million (USD) has been transacted on the virtual kittens found on the platform. Multiple kittens have sold for around ~50 ETH, the Ethereum currency, which translates to 23,000 USD. The highest amount so far spent on a kitten is ~240 Ether, or 114,000 USD. The least expensive cat will cost you ~.03 Ether to buy, or 12 USD.

You may be wondering at this point: what is Ether?

Slightly similar to Bitcoin, Ether is a type of currency that can be found on a platform based on the same blockchain technology that allows developers to make and deploy decentralised applications. Bitcoin offers a peer-to-peer electronic cash system, but Ethereum offers both Ether currency and a platform for developers to pay for transaction fees and services on the network.

Crypto kitties one

It is argued to have very little tangibility compared to its blockchain counterpart, and now people are using their Ether to buy virtual cats – something that definitely has no tangibility. It can be noted that if the popularity of CryptoKitties continues to increase, people may be able to gain a return on the kittens they invest in by selling them back at a higher rate. But, it may also see a major Ether market crash when the craze of virtual kittens dies down. Either way, it’s a great way to be introduced to the Ethereum platform.

What to know about CryptoKitties…

If you have gotten this far and are itching to get your hands on the virtual kitty of your dreams, here are some things you need to know about the platform.

One of the major things of note is that since it is a game housed on the Ethereum blockchain, there is no actual entity that manages the game. Once users purchase their kittens, they are theirs. There is no centralised database that houses the kittens, which means there is nothing to erase when the company that created the kittens shuts down; they just live on the blockchain forever.

It is run over five Ethereum contracts written by the company, and users interact with it over their own Ethereum address through an extension that allows for Ethereum to be traded directly within their browser. By navigating their way around the CryptoKitties website, users can buy, swap and sell kittens, as well as breed to make unique combinations.

For the moment, it is relatively hard to actually play the CryptoKitties game due to the platform not anticipating the volume of transactions that would be made. To break it down, 15% of all traffic is dedicated to the game, which is the most traffic on the site dedicated to one platform.

How does the game work?

When the game went live on Ethereum, there were 100 ‘Founder Kitties’ that people could purchase. Every 15 minutes, a new ‘Gen 0’ cat is released and listed for the average price of the last five sold, with an interest of 50%. This then declines over the 24-hour period until the cat is sold. Users can also auction off their cats, which they choose a start and end price for.

You are also able to put your cat up for ‘Siring’, which is the games language for breeding. Another user can then pay for their own CryptoKitten to breed with yours. The paying user then gets to keep the offspring, and you the Ether.

AxiomZen makes money through the initial selling of a new generation of cats, and generates a fee from the auctioning and siring transactions.

The kitten make-up 

Each CryptoKitty holds a unique 256-bit genome, with a genetic sequence that allows kittens to have exclusive combinations of colours, markings, whiskers, beards, etc. The gene sequence is even recessive, meaning that if the cat breeds with another, a sequence in the background of the cat can come through in its offspring.

At this time, there is no explicitly rare CryptoKittens. Users themselves are dictating what is deemed as ‘rare’, and then paying a premium price for them. More than that, earlier-generation kittens seem to sell for more compared to a third-generation cat.

The future of CryptoKitties

Although the future seems unclear at the moment, the company wants to create processes that not only advance the game over the next year, but that make the onboarding process a lot easier for users.

To find out more about the game, check out the CryptoKitties website here.