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Because CryptoKitties operates on the blockchain, the digital cats created by the game will continue to exist even if its creators disappear, making them permanent collectible digital objects. The most popular CryptoKitties have traded for six-figure sums, with users spending a total of about US$16 million on the game.

Sid Kalla, a cryptoeconomics expert and co-founder of Turing Group, a research driven crypto protocol development and advisory firm, said it’s fair to ask whether it makes sense for valuations to be so high for a technology that has a lot of potential, but can’t currently even handle a popular game without causing glitches.

“The market has gotten ahead of itself,” Kalla said. “You have to remember, blockchains are incredibly inefficient databases. Any blockchain is going to have scalability issues.”

Anthony Di Iorio, a founder of Ethereum and chief executive and co-founder of Jaxx, a multi-cryptocurrency wallet, and Decentral, a Toronto innovation hub, said he doesn’t mind that Kik is leaving the platform he helped create.

“I’m an evangelist of the entire ecosystem. I’m never tied to one particular coin or the other,” Di Iorio said. “A move for Kik to move off of Ethereum to Stellar, if they’ve done the research and it’s looking good and it makes sense, then yeah, I’m all for it.”

Di Iorio, who invested in the Kin ICO, said he’s not concerned about the cryptocurrency’s loss of value. He said the company is dealing with a steep learning curve and a community of investors that’s quick to lash out.

“You’re always going to disappoint people,” he said. “It’s good to see them testing, trying and seeing what’s going to work.”

Financial Post

cbrownell@nationalpost.com

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