Via the Etherium platform, CryptoKitties is a game where users collect, trade, and breed kittens virtually using smart contracts on the Ethereum blockchain. And within days of its' launch in November, the tech company behind the game Vancouver/San Francisco tech company Axiom Zen was forced to raise the price to join because the number of players coming on board was causing congestion in Ethereum's network. So what relation do cats bear to cryptocurrency?
First, CryptoKitties is based on the same thing making cryptocurrency possible, blockchain. All a user has to do is buy ether and then use it to pay for their first virtual feline friend. Once a user buys a kitten, the transaction is added to the blockchain as a permanent receipt of purchase.
Think of CryptoKitties as like the Tamagotchi craze of the '90s – users buy a virtual pet, except with a level of digital scarcity built into the purchase. No central authority oversees the game, everything is decentralized and tracked via blockchain. This permanent online record guarantees the kitties a user buys and the money they spend does not disappear overnight.
On the official website CryptoKitties
are described as 'crypto-collectibles' users can buy, sell, trade, and even breed. This becomes possible because of digital scarcity, in short it means there are a limited number of kitties that can be created. It is along same principles that set a limit on the number of Bitcoins to be mined at 21 million.
This is what prevents CryptoKitties from coming under inflationary pressure. The goal is for all possible kitties come into existence by November 1. After that, the only way to become the owner of a new kitty will be by breeding ones a user has bought from other players or a user already had.
Breeding has its limits. Like with real cats, it takes two to make a new one. Each time a user's original cats create another, it takes longer for the cat to be ready to breed again. This increase in times between conceptions is set to stop anyone from starting a virtual kitty mill.
While it is tempting to label CryptoKitties as its own cryptocurrency, the game's creators insist it's not. Instead, they say it's a product simply purchased only using ether.
"In the real-world the analogy for a cryptocurrency is measured in dollars or pounds; a crypto-collectible real world analogy is closer to assets like baseball cards or fine art," the CryptoKitties FAQ page claims.
This market for collectable kitties has taken the crypto-world by storm. Users who would never have thought about buying Ether are now rushing to get their hands on these cats. Maybe it is due to people's obsession with collecting things. It riffs off of the same concept that fueled the popularity of Pokemon Go. Only, as usual, it proves the undying popularity of cats on the internet.