Birth Of CryptoKitties To Drive New Bitcoin Craze
Why these digital kittens could be the next Beanie Babies.
PHOTO CREDIT: Getty Images
The world of cryptocurrency has birthed its first hit game. Cryptokitties, from San Francisco design team AxiomZen, is like a mixture of Pokemon and Ethereum. The game uses Ethereum's blockchain to create and track tokens that take the form of digital kittens. The kittens can breed and they can also be bought and sold in online auctions.
The game started with 100 "Founder Kitties," and the blockchain will churn out a new "Gen 0" kitty every fifteen minutes until November 2018. Those kitties are listed for sale at a price based on the average of the last five kitties sold plus 50 percent. That price declines over the next 24 hours until it reaches a level that someone is willing to pay.
Players can "sire" two kitties that they own or they can pay, using ETH, to sire with someone else's kitty. Pregnancies, which the game calls "cooldown periods," range from an hour to as much as a week. Kitties with shorter cooldown times sell for higher prices but each siring increases the time needed. Each kitty comes with a genome made up of 256 bits that determine its background color, appearance, cooldown time, and so on. Occasionally, a siring will produce a "Fancy Cat."
The idea is simple, especially if you're already familiar with the blockchain and cryptocurrency. But it's already taking off. Players have spent around $4.5 million on the game. The most valuable Kitty sold for 246.9 ETH, around $117,712.
It's possible that CryptoKitties will be the next Pokemon or Beanie Babies. It's also possible that it won't spread beyond the realm of cryptocurrency early adopters--and they don't include too many teenage kitty fans. Kitties can currently only be purchased on a computer or laptop running Chrome or Firefox, and payments have to be made through MetaMask, a digital wallet. That's likely to reduce adoption.
Unlike Bitcoin, kitties can't be mined. But they can be sired, a process that, like mining, generates a fee. Each transaction is registered on the Ethereum blockchain, ensuring its integrity. Players also get to own their pets. Unlike games run by large companies, there's no chance of the database and ownership registry disappearing if AxiomZen decides to move on.
The real benefit of CryptoKitties then, is that it's a great introduction to the world of cryptocurrency for people still doubtful about its value. It's not easy to explain to someone why they should buy bitcoin or where the price of a bitcoin comes from. It's much easier to explain that this kitty is more expensive than that kitty because it's prettier, closer to Gen 0 and has a short cooldown period. Explain that the name of the kitten and the buyer's ownership of it is entered into a digital registry and they'll get it. In the process, they'll get bitcoin.
Whether or not CryptoKitties turns out to be the next Pokemon, curiosity about these digital cats might well help to drive new interest in digital currencies.
Listen to The Bad Crypto Podcast talk about CryptoKitties.