Meet the new craze in the world of cryptocurrencies: virtual kittens.
Launched a few days ago, CryptoKitties, an online Pokemon-like game built on the Ethereum blockchain, is now the most popular smart contract – an application that runs itself – on the Ethereum platform.
The game accounted for 17.4 percent of all transactions on the network as of 10 am on Dec 5, surpassing cryptocurrency exchange EtherDelta, according to Ethereum-related information provider ETH Gas Station.
After a Nov. 28 debut, the growth rate of the CryptoKitties transactions has increased to a point in which it is actually clogging the Ethereum network, leading to slower transaction times for all users of the blockchain, which is a digital ledger for recording transactions.
“The pending transactions on the Ethereum blockchain have spiked in the last 24 hours, mostly from CryptoKitties traffic,” Bloomberg quoted Nolan Bauerle, director of research at CoinDesk, as saying in an email.
CryptoKitties is one of the first blockbuster applications to emerge for Ethereum. The blockchain is already used for transactions in digital token called ether, the second largest after bitcoin.
In the game, players buy cartoon kittens, and then breed them with other cats. Launched with an initial 100 “founder kitties”, each specimen can “sire” a new kitten and sell it to other users. And people are spending a huge amount of real money on the game.
Bloomberg notes that according to Crypto Kitty Sales, a third party site tracking purchases made on the game, as of Dec. 4 more than 22,000 cats have been sold, for a total of US$3 million. Dozens of kittens were sold in the five-figure range.
Three of the rarest and expensive digital kittens on CryptoKitties were sold for US$114,573, US$81,549, and US$69,600 respectively, though the average sales price of a virtual kitten is currently around US$100 in ether, according to the sales tracker.
Unlike other online games, CryptoKitties is played on the Ethereum blockchain, there is no central entity managing the game, and there is no central database to store all the in-game items. Each cat has a unique identity that is logged on the Ethereum blockchain, which is decentralized and will live forever on the network even if the company shut down.
The viral game was created by AxiomZen, a design studio based in Vancouver and San Francisco.
“We wanted to make blockchain technology accessible to the everyday user, as we believe this is a key step in otherwise seeing the technology adopted,” Bryce Bladon, Axiom Zen’s communications manager, told Bloomberg.
“We wanted to explore blockchain applications outside of ICOs and cryptocurrencies,” he said, also adding that the company sought to “leverage the power of fun and games”.
As TechCrunch reports, AxiomZen makes money by keeping the ether collected from selling the initial 100 kitties, plus the newly generated kitties sold each 25 minutes. They also take a 3.75 percent fee on all auctions or transactions.
This article appeared in the Hong Kong Economic Journal on Dec 5
Translation by Ben Ng with additional reporting
[Chinese version 中文版]
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