CryptoKitties, an innovative gaming application built on the Ethereum blockchain is showing signs of becoming a “killer” Ethereum App that could revolutionize the blockchain industry. Since its launch in December 2017, the virtual cats’ collectibles game has processed over $12 million in sales, becoming one of the most successful decentralized applications built on the Ethereum blockchain.
The success of CryptoKitties doesn’t come as a surprise to many. The decentralized game has been such a roaring success that it accounted for up to 30% of all of Ethereum’s transactions in December 2017, according to Etherscan. So popular was the game at its peak that it clogged the robust Ethereum platform.
In 2018, CryptoKitties seems to continue with its momentum as it recently raised $12 million in a Series A funding round. The latest funding comes from Venture firms Union Square Ventures and Andreessen Horowitz, both of which were early investors in Twitter and Facebook, respectively.
What is CryptoKitties?
In simple terms, CryptoKitties is a decentralized application (dApp) that features digital kittens in the form of digital tokens. As such, they can be traded, collected and/or bred. CryptoKitties is not a cryptocurrency but a digital collectibles game. Each kitten in the game represents a unique digital asset. Ownership of virtual kittens is tracked using smart contracts. Being a decentralized application, CryptoKitties are distributed automatically without any third party involvement. No need to worry about a digital feral cat problem as the total number of cats that can be distributed is capped at four billion.
Some Kittens are Expensive
If you thought that CryptoKitties were just another online game with cheap avatars, you’d be sorely mistaken. On the contrary, digital kittens are pricey, with five of the rarest kittens fetching $100,000 apiece. The Genesis kitten, the first to be sold in December 2, 2017, fetched a mouthwatering $120,000. Because of the hefty price tags, CryptoKitties has received lots of criticism from analysts and researchers, who argue that the project is not sustainable in the long term.
CryptoKitties Could Grow Bigger in The Coming Days
While most critics of the virtual kittens game fail to see the bright side of the project, some prominent investors are seeing a potentially lucrative project in the form of CryptoKitties. One of these is Balaji Srinivasan, the Earn.com CEO and partner at Andreessen Horowitz. He says that the game has shown that friction-less trading of digital assets can be achieved and scaled using the blockchain technology. Andreessen Horowitz and Union Square were also early investors of Coinbase, a centralized exchange.
According to Balaji, digital assets can be seamlessly exchanged using CryptoKitties mechanism and technology. Viewed as a peer-to-peer digital exchange, the CryptoKitties game looks more practical than just a simple collectibles game. This could be an early example of how a decentralized exchange should operate. The major risk facing centralized exchanges is that they can fail catastrophically because they operate centralized infrastructure. Centralized exchanges are also vulnerable to the threats and whims of regulators and have to conform to Know Your Customer (KYC) and anti-money laundering laws and policies.
What Does Intrinsic Value Really Mean, Anyway?
This is perhaps one of the key concepts that the cryptocurrency market has managed to discredit over time. Cryptocurrencies like Bitcoin have demonstrated that value is subjective and that no asset can be said to be intrinsically worth a specific value. On the CryptoKitties platform, the value of virtual kittens is determined by scarcity and rarity, just like any other digital cash.
What’s Next for CryptoKitties?
The future seems promising for CryptoKitties. Following its recent funding round, the project intends to go mobile by launching mobile applications. According to its spokesperson, the application will use the funds to expand its team and reach, with a target of reaching a billion customers.
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