What a week in the digital feline industry.
In virtually every single group chat we are part of the topic came up multiple times, with feelings ranging from disgust to adulation.
A few themes emerged.1. The 'fundamentals'
Why on earth are folks paying
+$100k worth of ETH for digital images of cats? As we mentioned last week, this is an exploration of the concept of digital scarcity, and more specifically of non-fungible digital collectibles. While not being fully decentralized
yet, this game would be significantly less interesting if ownership and supply were controlled by a central issuing authority, as Vitalik himself stated
. People are clearly willing to attribute material value to things that are verifiably scarce and trustlessly transferable (and are happy to deal with partial centralization for the sake of better usability). We note there are other competitors
already popping up, which raises the question of what scarcity actually means (presumably scarcity only has value in conjunction with strong network effects).2. Applications of blockchain
While everyone seems religious about now not being prime time for the application layer, we may have just experienced the emergence of the first mainstream consumer Dapp. The fact that the first breakout Dapp is a game and is about cats shows that practical applications of the blockchain can extend well beyond ICOs.3. Scalability
The interest it generated almost took the Ethereum network to a halt, its smart contract accounting at times for up to 25% of the entire network's transactions and for over 10k pending
transactions. Some ICOs had to delay
their token sale. The team responded by increasing
the birthing fee by 7.5x. More than ever it's clear how scalability should be (and is) a top priority for the Ethereum development team.4. Revenues!
This project will unfashionably (or fashionably, we are not sure what's contrarian anymore!) fund itself going forward through a sustainable revenue model, steering well clear
of an ICO.
5. Return and ridicule
It's always very risky to discount something that looks ridiculous
or a like a toy
. Some of the most successful investors of all time have built investment thesis around this heuristic, and this was another example of it. We know of someone who purchased hundreds of Gen0 kittens in the very early days of it and, as it currently stands, is sitting on a mind-blowing return.Other interesting links:The Cryptokitty Whitepaper
with a section of ERC-721 token standards (more on that further below!)Cryptokittydex
- an ecosystem is already forming up.
Surely enough, Cryptokitties experts landed on Twitch
And surely enough, someone dissected
the codebase to help any dev build her own Cryptokitties-like game on Ethereum.
Some mind-bending metrics
from the first few days, and a newly coined term (Kittycap).
Phew, Cryptokitties are probably not securities
. A lawyer actually Howey tested them.