Cryptocurrency Users Spend Millions On Ethereum Cryptokitties

There’s a new video game craze sweeping the nation. The Vancouver and San Francisco-based design studio AxiomZen recently unleashed Cryptokitties, an Ethereum-based application for breeding virtual cats. They are kind of like Pokemon cards, except each kitty is unique thanks to the game’s blockchain technology. Players need to use ether tokens to start playing. So people are spending more than $3.5 million worth of cryptocurrency on virtual kitties, with the original feline avatar selling for around $100,000.

“Right now Cryptokitties make up more than 10 percent of all network traffic on the Ethereum blockchain,” cryptocurrency investor Arianna Simpson told International Business Times “I think it represents a really interesting use case for blockchain-based gaming.”

These kitties have distinguishing traits, including rare traits, which influences their prices. It’s not really a competitive game. The goal is to breed and raise virtual cats. This game is decentralized so that players actually own their virtual pets. So players won’t lose their kitties if the blockchain studio shuts down, the way many players did with Neopets. Blockchain stars such as Ethereum creator Vitalik Buterin and Zcash founder Zooko Wilcox praised the game on Twitter. The subsequent flood of users overwhelming the network immediately raised questions about Ethereum’s scaling challenges.

Critics might argue overpriced virtual pets could further inflate Ethereum’s rising value. According to CoinMarketCap, ether tokens currently sell for around $465 each. Yet cryptocurrency experts don’t seem concerned about the cryptokitty craze. To the contrary, many believe this trend will speed up work on scalability solutions and bring more contributors to the broader Ethereum ecosystem.

“One of the best things about the Ethereum ecosystem, one of the reasons I switched over to it from bitcoin, was in the early days people were very interested in building stuff. They were not focused on Ethereum prices,” Peter Vessenes, managing director of the Ethereum-centric New Alchemy lab and co-founder of the Bitcoin Foundation, told IBT. “This [Cryptokitties] shows there’s still a healthy, entrepreneurial spirit in this space and I think we should applaud that.”

Simpson agreed the game is having a positive impact on the broader community. “One of the challenges blockchain companies have been having for years is the gap between usability and design,” she said. “It’s awesome to have things like this because it’s more understandable for mainstream folks. It allows for an easier onramp into cryptocurrencies and blockchain.” She warned skeptics not to dismiss the lessons this game illustrates when it comes to visual design, marketing and engagement.

“It’s a very well-designed game,” Simpson said. “I think it could be the beginning of a new trend...more social and playful blockchain-based applications.”