We’ve already written about the most popular blockchain game – CryptoKitties. Nobody could have imagined that buying and selling cute digital kitties would become so popular. But the game alone accounted for 15% of Ethereum’s network traffic. The popularity of the game lies in its accessible demonstration of what blockchain and smart contracts can achieve. Each digital kitten is unique and its ownership cannot be altered. This helped the decentralized marketplace process more than $12 million. Customers from all over the world are spending up to $120,000 on the cute digital asset.
More than just collectibles
CryptoKitties success has demonstrated that international trading of assets via blockchain can be fast and efficient. Using the same mechanisms, users can trade any asset via blockchain without fear of theft or scam.
Moreover, transactions aren’t processed by middlemen, even on such a global scale. This means that banks will no longer be able to enforce their strict Know Your Customer (KYC) and Anti-Money Laundering (AML) policies.
No intrinsic value?
According to Kitty Sales, the top five most expensive kittens have all sold for over $100,000 each. How can something that has no practical value be worth that much?
This brings us to the issue of inherent value of goods. One of the biggest arguments against Bitcoin is that is doesn’t have intrinsic value. However, we see time and again that the whole concept is flawed. Value is subjective and no fiat currency is intrinsically valuable – it is however, as much as people are prepared to pay for it.
Vitalik Buterin provided an example of the recent sale of the Da Vinci painting, Salvator Mundi. Saudi prince Bader bin Abdullah bin Mohammed bin Farhan Al Saud bought the painting at auction for $450 million. To the prince, the painting is worth that much, but to others it may not be. Buterin noted that “the value of Blockchain extends far beyond applications that would literally get shut down by banks or governments.”
Crypto (kitties) is a reflection of the world at large.
— Vitalik Buterin (@VitalikButerin) December 9, 2017
Some analysts have doubts about whether the kittens will maintain their value in the long run. The value of the kittens is based on scarcity and the belief that the asset will grow in value over time. Are CryptoKitties just a fad or will they go down in history as the first massively popular game to use blockchain and smart contracts?