What is the first thing that you think about when you hear the word blockchain?

Bitcoin, cryptocurrencies, ICOs, investing for profit etcetera. It is not unusual that most people would relate the role of blockchain with businesses and financial markets, but is that really all blockchain is for? Can blockchain be used for something other than fintech?

Short answer: Yes!

Meet CryptoKitties, the first blockchain game ever that is based on the ethereum network.

These weirdly adorable digital collectibles created such a hype, that in Dec 2017, just in 5 days of their release, they were consuming over 20% of ethereum’s gas, as a result slowing down the network.

Here is how the game works:

This is a cryptokitty. It is called the Eternal Emperor Founder Cat. You can see that the Eternal Emperor Cat has special attributes (or cattributes) like the green polka dots, a unique fur color, whiskers, eye color etc. This special blend of cattributes solely belongs to this kitty alone and it cannot be seen in any other kitty. Every other cryptokitty is also unique in its set of cattributes. No two cryptokitties will be entirely similar to each other.

But guess what?

This kitty can breed. Mate this kitty with another one, and you will get a new kitty that too has a special mixture of cattributes, many of which are inherited by its parents.

Now, if this new kitty that you bred has rare features or cattributes, it will be worth a lot of ether. The more rare kitty you have, the higher the amount you can exchange it for.

But, how do you get a cryptokitty and how do you breed it?

You can buy cryptokitties. Currently, the Eternal Emperor Founder Cat can be bought for 100 Ether which is about USD $28922; there are a lot more which sell for way more. It is, however, not necessary that you buy two cryptokitties to breed them for a new one. Owners of cryptokitties can charge you fees to use their kitty for the breeding process.

Cryptokitties which are usually the most rare ones belong to generation 0. Yes, there are generations to these digitally living beings. Generation 0 kitties have no parents, and it is this set of kitties which have the ultimate attributes. Every other attribute that is possessed by the other generations is some combination of these. According to CryptoKitties whitepapur (whitepaper), there are a total of 50,000 generation 0 cryptokitties; they are also known Clock Cats. Each of these is auctioned every 15 minutes.

As of now, there are about 424,000 kitties, and this number keeps on rising as a new kitty is bred. Among these, the Founder Cat is worth the most – 300 Ether. To put it into some perspective, that is USD $86,787!

To view the list of the number of cryptokitties and the value they hold, check out here.

What’s with the hype?

It is totally normal to ponder as to why these digital collectibles are creating so much hype. The total number of sales of these kitties are about 423952, which amounts to a 47,000.42 ether being sold via these kitties. That is about USD $25,555,473.84.

Technical Details

CryptoKitties are digital and collectible cats built on the Ethereum blockchain. They are bought and sold in ether. CryptoKitties game uses ethereum’s non-fungible token, ERC 721.

Fungible tokens are those which have the same value everywhere; for example, a bitcoin has the same value everywhere. Similarly the commonly used Ethereum token, ERC 20 is also a fungible token. The reason why CryptoKitties does not use such fungible tokens is that each cryptokitty essentially represents a token, and each cryptokitty is unique in nature. Therefore, only such a protocol would suffice this need where every individual token has its own value. In its whitepaper the company states:

“To do this, we pioneered the ERC 721 protocol for non-fungible tokens, the standard for transactions and ownership of non-fungible assets on the blockchain. Using this protocol, CryptoKitties provides both an interface to browse unique items and robust smart contracts to conduct transactions (breeding) once both parties agree.”

It might be interesting to know that, since every cryptokitty represents a non-fungible token, it would mean that behind every cryptokitty, there is a code at play. This code contains all the information of what its cryptokitty looks like, and this code determines the cattribute a new cryptokitty would inherit when it parents pass on different kinds of cattributes. In a nutshell, the code is a cryptokitty’s genotype while, the cattributes that a cryptokitty portrays, are its phenotype. This process is much like what you would read about inheritance in a biology textbook.

The Revenue Model

It is interesting that CryptoKitties never had an ICO sale. Instead, it decided to adopt a sustainable revenue model. CryptoKitties receives a small 3.75% of each transaction conducted on its marketplace.

In addition to this, CryptoKitties also makes revenue by selling the Generation 0 cats. The Generation 0 cats amount to a total of 50,000, each of which is sold every 15 minutes in a descending clock auction. According to the whitepaper:

“A Clock Cat’s price is determined by the average price of the last five CryptoKitty sales, plus 50%. They are sold by a descending clock auction and their actual valuation will be determined by the marketplace’s ecosystem.”

The CryptoKitties Motivation

One may wonder, why would one create a gaming platform based on blockchain that does not offer its users a specific service.

The team behind CryptoKitties realized that the public perception of blockchain could be detrimental to the technology. Today, people’s perception is only limited to blockchain’s role in fintech. Moreover, blockchain is earning a bad name due to the spam of the scam ICOs. According to the team: “These two issues contribute to a larger issue: a shortage of meaningful innovation with blockchain technology. To that end, our product aims to not only address these broad issues, but it aims to innovate within the space”

Also, blockchain’s audience is very esoteric. It is true that CryptoKitties is able to direct the attention of people towards blockchian, who otherwise would pay no heed.

The Team

In September 2017, CryptoKitties launched its alpha test at ETHWaterloo. The team also won the ETHWaterloo hackathon with Rufflet and this marked the beginning of CryptoKitties.