Cute kittens, yes kittens, have begun taking over the Ethereum blockchain. Launched on November 29th, Ether holders have spent over $12 million USD on these virtual kittens on the blockchain-based, digital Pokemon-like game called CryptoKitties. Created by the San Francisco and Vancouver based design studio AxiomZen, CryptoKitties has now become the second most popular application on the Ethereum Network.
So I’m sure you’re wondering why anyone would want to buy these virtual cats, let me answer that for you. The premise behind the game is to obtain different cats that all have different personalities (cattributes), physical features, genotypes and the object is to breed or ‘sire’ them with other people’s kittens, in hopes to breed cats with rare features to make more money. There are four billion possible breeding combinations on the game and the highest ranked cat that has currently been sold was for $125,148.37 USD.
Each cat comes from a certain ‘generation’ and the lower the generation the more expensive it is. The game was started with 100 ‘founding kitties’ and are releasing new generation zero kitties that are rare. The ‘founding kitties’, however, are limited. Cats are sold every 15 minutes, which become listed for the average price of the last five generation zero cats sold plus 50%, but if the cats don’t, sell the price declines in the span of 24 hours until someone buys it.
As described above, siring or breeding your cats is the main way to make money with the game. You put your own cat up for sire set at a specific amount, and someone can choose to breed their cat with yours and they keep the offspring and you keep the Ether. Or, you can pay someone to breed with their cat and you can keep the offspring and they take your Ether.
Another strategy people are taking to make money off the game is buying rare Generation Zero cats and holding on to them. As they become rarer and they stop distributing these cats, the higher their price will go.
It can take anywhere from a week to an hour for the “cooldown” time to breed a new kitten. Obviously, the shorter the timeframe the better since you can sell the offsprings sooner and get to breeding again, this means that the cats with the shorter cooldown time are worth more money.
There is no ‘rare scale’ on the game that assigns a specific rarity value to each genetic sequence. The community is primarily responsible for deciding which cat traits are rare by paying higher for them. The past few days have shown that kittens with a “gold” background have been selling higher than those with a colored background.
Users are only able to change the name and customize their kittens’ names. Some have used this space to showcase its rare attributes or which generation it is.
The game is currently run on a set of 5 Ethereum smart contracts and users on the game interact with their own Ethereum address.
The easiest way to play the game is to download the MetaMask Chrome Extension and it will allow you to send and receive Ethereum directly in that browser through the CryptoKitties website.
Due to the popularity of the blockchain-based game, the Ethereum blockchain has been severely slowed down. At press-time, the blockchain has a backlog of just over 12,000 but at one point hovered around the 30,000 mark. You can see in the chart above that since CryptoKitties’ launch back on November 29th the transactions on the Ethereum blockchain have increased substantially. Due to the backlog and in fear of losing users, CryptoKitties has now doubled the “birthing fee” of the cats and has promised to look into a more long-term solution. The issue has to do with every single transaction made on the site, whether it’s buying a kitten, putting it up for sirening, selling a kitten or any sort of payment is an individual transaction that is recorded on the blockchain.
The game, at one point in time, was taking up almost 18 percent of Ethereum’s total hashing power.
This issue brings to the forefront a huge scalability issue that is among most crypto-currency blockchains and one Ethereum’s founder, Vitalik Buterin has been diligently working on. This year Ethereum held their annual Devcon3 conference in Cancun, Mexico and the majority of the topics were centered around this very issue. This game might have just sent the Ethereum developers into overdrive, as they are already in the works of scaling the blockchain with various projects.
Buterin just recently offered his opinion on twitter about the game saying, “I actually like the digital cat games. They illustrate very well that the value of blockchain extends far beyond applications that would literally get shut down by banks or governments if they did not use one.”
Ethereum's blockchain stands out for a number of reasons, mostly that it allows things to be built on top of it unlike it's the competition bitcoin blockchain. It was launched with its own scripting language that makes it possible to build complex smart contracts, decentralized autonomous organizations (DAOs), decentralized autonomous apps (DApps) and even other cryptocurrencies with ease. With its ease of development and its built-in abstract layer to its technology, the ethereum blockchain is the clear standout blockchain for developers to use. Ethereum surely offers promise for one chain to rule over them all or at least to be the foundation. As new Apps like CryptoKitties emerge and gain popularity among the investors, these roots run directly back to the original Ethereum blockchain. Before CryptoKitties even launched, the blockchain was processing more transactions than all of the other cryptocurrencies combined.
Once this scalability issue is solved by the Ethereum developers, more DApps are sure to emerge and Ethereum could soon take over the cryptocurrency space completely.