Cryptokitties. Yes, right?! Finally I can have a pet without worrying about its food, water or other care necessities when I take off on adventures that leave even the toughest of the tough cacti… withering away.
Not quite right.
Cryptokitties are collectible, breedable and exchangeable digital kitties that are made on the blockchain, a space that supports a marketplace for people to interact their cats, and yes, to make new kitties.
Every 15 minutes, the Cryptokitties team releases a new cat which is then auctioned off to an owner, in the form of true ownership. Unlike other games where the makers of the game have omnipotent control over “property,” Cryptokitties uses a series of smart contracts that run on the Ethereum blockchain to keep track of ownership and cat genetics.
So once a cat is auctioned off, it no longer belongs to the Cryptokitty creators, but to its new owner.*
But, this is not the end of the kitties production line. Each cat has a 256 bit genome, and when two cats are “bred” together, they make a kitten. The kittens genetics are derived from its parents, but with the right combination of genes, (bits), a “fancy cat” may be born.
Each cat’s unique characteristics such as color, scarcity, generation etc, are markers that will all be judged in the determination of its value. There’s no predetermined scale, rather, it’s the community that independently decides which traits are rare, and this results in a premium cost for these traits.
And like real kitties, cryptokitties aren’t taken lightly. Millions have been spent on these digital cats that have gone for prices up to the 100k range.
So why cryptokitties? “By leveraging the power of fun, we hope to introduce the public to cryptocurrencies and blockchain networks like Ethereum. We wanted to explore the concept of digital scarcity, crypto collectibles, and non-fungible tokens,” writes Cryptokitties creator, Mack Flavelle.
But Cryptokitties comes with its own risks. Like other cryptocurrencies, owning a Cryptokitty is like having a token which can lose its value at any time, and its value is not guaranteed. On the plus side, if the Cryptokitties organization dissolves, the smartcat track* is still out there and kitties can be bred together.
This game is a good way to learn about cryptocurrencies, blockchain, digital ownership, transactions, contracts and purchasing. Like any online transaction system, risks can be high and this cat game offers a fun way to learn the ins and out. Best not to end up with unintended consequences along the lines of what can be found in the non-digital litter box.
At the end of the day, I hope this article brings a familiar internet lingo a.k.a. cats, to help explain a non-familiar concept.
*Ownership: the way we understand ownership in the digital sense is much less transparent. For example, when purchasing on Steam, the game still belongs to Steam, and the purchaser is granted an access key. On the blockchain, ownership is transferred from the seller to the buyer.
*Smartcat track: Tracked by smart contracts, a computer protocol intended to digitally facilitate, verify, or enforce the negotiation or performance of a contract. Smart contracts allow the performance of credible transactions without third parties. These transactions are trackable and irreversible.
2 thoughts on “Cryptokitties… awwhhhh?”
So weird! Do people have to take care of their crytokitties – or are they just bitcoins with digital “genetics”?
Hi Tamara, thanks for the read! No, the cryptokitties do not require care of any sort, nor are they a coin of any sort. Just like collectible trading cards, cryptokitties are not a currency, but they have value based on their popularity and rarity. What differentiates cryptokitties from trading cards though, is their form. Trading cards are tangible, and cryptogkitties are digital. Trading cards can be lost, but the cryptokitties’ information is stored on the decentralized blockchain. A digital reference file you could say. And like a trading card factory, the original digital kitties are produced based on specific characteristics, and from there, the algorithms generate future kitty genetics. Yes, it’s quite amazing how much value has been assigned to certain digital kitties! It’s risky business though. While the game continues to pick up momentum, prices will rise and cryptokitty prices and sales profits will too, but as the game loses popularity or stagnates, these prices will lower, just like a market crash, but with little chance of recovery without a change in the game.