Cryptocurrency is all the rage right now, and apparently people have decided to spend it on virtual kittens from CryptoKitties.
CryptoKitties launched a few days ago, but cryptocurrency owners have already spent nearly $2 million on digital cats.
CryptoKitties Slashing Through The Ethereum Blockchain
For those not in the know, blockchain systems revolve around tokens, or virtual assets owned by individuals and not under the control of a central owner. The most famous blockchain is Bitcoin, but the market-driven principles that guide blockchain systems can be applied to almost anything.
In the Ethereum blockchain, that application is now focused on the CryptoKitties craze.
The game was just launched a few days ago, but CryptoKitties is already at the top of all transactions within the Ethereum network. As of the time of writing, CryptoKitties has taken up 14 percent of all transactions over the last 1,500 Ethereum blocks.
The transactions, in addition, are not just worth an odd dollar or two. At the time of writing, there have already been 18,516 unique cats of CryptoKitties sold for a total value of a whopping $1.7 million. The average sale price for each cat is $80.68, and the most expensive virtual kitten was sold for a mind-blowing $117,712.12 at the time of the sale.
So... What Is CryptoKitties?
CryptoKitties is a new "game" that allows people to buy and collect virtual cats using ether, the Ethereum blockchain's cryptocurrency. They can then breed the cats to try to create new ones that will hopefully come with rare attributes, or as CryptoKitties calls them "catributes."
CryptoKitties started with 100 "Founder Kitties" and adds a new "Gen 0" cat every 15 minutes. This "Gen 0" cat carries a price that is the average of the last five digital cats sold, plus 50 percent, but the price slowly declines until it is purchased.
People can buy and sell virtual cats through an auction, with a starting price that declines to an ending price until it is bought. People can also breed kittens in a system named Siring, with the owner of one cat getting the kitten and the owner of the other cat getting ether. There is a cooldown time in between breeding new kittens, and cats with a shorter cooldown are more expensive because that means their owners can create and sell offspring at a faster pace.
The cats of CryptoKitties each have a 256-bit genome that contains the genetic sequences for the various combinations. There is no way to take a look at the exact traits that each cat holds though, and it is the market that is currently dictating the rarity and price of the kittens.
Cyptocurrency owners who spent thousands of dollars on the digital kittens may get their money back, perhaps even with a profit, if they keep breeding rare cats. However, like many fads such the beanie baby trend, there is the very real danger of a market crash.