Over $1 million Spent Buying Virtual Cats in CryptoKitty Craze

Over $1 million Spent Buying Virtual Cats in CryptoKitty Craze

Blockchain is the software that embodies the latest computer technology and on which Bitcoin and other cryptocurrencies are built. It also has many other potential applications from smart contracts to medical records and insurance. It’s been dubbed as the technology that could most change the world we live in since the internet. And we’re using it to buy virtual cats…over $1.2 worth of them..

CryptoKitties is a game built on the Ethereum blockchain, a cryptocurrency platform used to build and use smart contracts. AxiomZen, a San Francisco-based design studio, has inventively used the Ethereum platform to develop 5 smart contracts, which combined form a novel game users pay in ether, the platform’s cryptocurrency units, to play.

CryptoKitties, which is a bit like a cross between Beanie Babies and Tamagotchi, has quickly gathered ‘craze’ status and appears to be on the cusp of going viral. The game involves buying, selling and breeding cats. Players pay Ether, Ethereum’s native cryptocurrency, to buy cats and can then earn Ether buy re-selling or breeding them.

So, how does it work? The game started off with 100 ‘Founder Kitties’ and a new ‘first generation’ cat is also released into the game every 15 minutes. Kitties, including those created and released into the game, are auctioned to the highest bidder. The seller, which would be the game itself in the case of a first generation Kitty and players in the case of ‘Sired’ Kitties that result from breeding, set a starting price and a minimum price. Over 24 hours the starting price declines towards the minimum price until another player decides to stump up some Ether and buys the Kitty.

Kitty owners have two choices when it comes to breeding their virtual cats. One of the two owners receives Ether from the other, at a rate agreed on between the two, and the second keeps the offspring, which can then be auctioned off. The cheapest Kitty that can currently be bought on the game goes for around the Ether equivalent of $12, or £9, with that price rising as the game becomes more and more popular.

Kitties each have their own unique combination of visual and other qualities, such as recovery time between litters of offspring. These are defined by a 256-bit genome that holds their genetic sequence and decides on qualities such as colouring, markings, size, tail and so on. Like a real genome, the Kitties also have dominant and recessive genes so owners can’t always accurately predict how the offspring of a breeding pair will look and behave.

Because CryptoKitties is built on the Ethereum blockchain, the game is also 100% decentralised. With the rules that the game runs on set out in the 5 smart Ethereum contracts, it will exist in perpetuity on the Ethereum blockchain. This means that even if, or rather when, the craze dies out, die-hard fans will still be able to carry on playing without having to worry about support being turned off due to dwindling numbers of players, as often happens with online multi-player games.

The Ethereum platform, and its Ether cryptocurrency, has been billed by many as superior to Bitcoin because it has a tangible function – creating and running smart contracts. Bitcoin is only a digital medium of exchange (that can’t actually be used to buy or sell many goods and services) or store of value that has no intrinsic value. Cryptocurrency fans will be happy to see the CryptoKitties craze raising awareness of the Ethereum platform and how flexible and diverse applications can be built on its smart contracts, as well as getting more people using Ether. Sceptics will say it embodies the madness of the “cryptocurrencies bubble” – people using an asset with little tangible worth, Ether, to purchase virtual cats with no practical utility.

The latest technology in the world being used to power a virtual cat breeding and trading game, and it is going viral. Welcome to (almost) 2018!

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