CryptoKitties: Bitcoin's Bubble Popped but Blockchain Gaming Here to Stay
When people started dropping six figure sums on so-called CryptoKitties — basically virtual kitties built on Ethereum — people took it as a sign that maybe this whole crypto bubble was getting out of hand. But it increasingly looks like these CryptoKitties aren’t going anywhere.
That’s because Dapper Labs, the startup behind the Ethereum-based, cat collectible game received sizable investments Thursday from big-name tech venture capitalist firms. Indeed, Venrock, Samsung Next, and GV all poured $15 million into the blockchain project. This news follows a previous funding round in March that netted Dapper Labs $12 million from Andreessen Horowitz and Union Square Ventures. As it stands, CyrptoKitties has raised roughly $27.9 million in venture capital. If this CryptoKitty thing is supposed to be a joke or a scam, it’s a joke or scam that’s fooled some of the smartest minds in tech.
Oliver Carding, the CEO of cryptocurrency new site CoinJournal and blockchain toy startup Crypto Kaiju, tells Inverse these latest pile of cash could be a sign that gaming could emerge as one of the first tried-and-true use cases for the crypto, which has incidentally proved to be less-than-great at what bitcoin was originally intended for, i.e., paying for things.
“Cryptocurrencies and gaming [are] a perfect match,” Carding explains. “Imagine playing a game where you can collect an item that can use the blockchain to prove its scarcity. Imagine purchasing a physical collectible that when activated unlocks a character that can be used in a variety of games.”
CryptoKitties’ FAQ describes the game as “breedable Beanie Babies” — conspicuously evoking another famous asset bubble — but it has steadily gained traction resulting in two successful funding rounds despite last year’s bitcoin price crash and the subsequent lukewarm markets. The game functions on an Ethereum ERC-721 non-fungible token which is uses to create unique feline trading cards users can buy and trade.
A new CryptoKitty will be spawned every 15 minutes until November 2018, at which point players will need to breed existing cats to create new ones. These constrains create scarcity and can make certain cats’ prices soar, like an ultra-rare one that sold for $106,000.
There aren’t any game moderators or central authorities overseeing CryptoKitties, with everything instead decentralized and tracked on the blockchain. That permanent online record is meant to guarantee the kitties you buy and the money you spend won’t just disappear overnight. Carding believes this is the detail that could spark a surge of blockchain-based games resulting in massive and safe online marketplaces.
“The possibilities are limitless and I thoroughly expect that the connection between blockchain and gaming will grow and continue to mature as publishers and games creators realize the potential,” he explains.