You have probably heard of cryptocurrencies before, but have you heard of “cryptocollectibles”? They are like digital marbles or Pokémon cards that you have probably collected when you were younger. The company Axiom Zen released a new unique Cryptokitty – a digital collectible cat – every 15 minutes that only one person can buy until November 2018, when they capped these kitties at 50,000 (CryptoKitties, 2018). However, there are currently way more Cryptokitties, because unlike Pokémon cards, you can breed them. The game is that there are billions of different possible combinations of traits and appearances and so you can decide which combination is interesting for you. Therefore, you can go try to find a cat that has that combination and buy it. Also, you can try to find a combination that no one has created before and through the breeding mechanics you can come up with new combinations of traits or if you are lucky, even new traits entirely which has a big market value on the platform. Popular Cryptokitties earn high prices the way collectibles naturally always have.
Dragon, owned by rabono as of Oct. 18th 2019, Image owned by CryptoKitties.
Meet Dragon. “Dragon bit Rebecca Black when he was younger, but luckily those days are gone. He finds that spying on the neighbors is seriously exhilarating and suggests you to try it some time” (CryptoKitties, n.d.). On September 4th, 2018, Dragon was sold for a staggering 600 ETH, which was equivalent to $172,000 at the time (Nguyen, 2018). Many questions were raised as Dragon was not one of the first 50,000 Generation 0 Cryptokitties that are generally worth more than the bred Cryptokitties. Many people speculated that the transaction may have involved money laundering. However, Dragon may have some hidden attributes or the buyer maybe has an emotional attachment with the name, which will mean the purchase is made because of scarcity.
The interesting thing is that digital scarcity is a quite a new concept (Posth, 2019). Before the Digital Era, if you owned a thing, only you have that thing and no one else has it – unless you gave or sold it to another person. But that completely changed when goods became digital and accessible online. One the internet, it’s a copy every time you give somebody data. In contrary, Cryptokitties can be scarce, because they are built onto a blockchain. It provides a decentralized system for recording transactions. For example, if Alice has 10 Cryptokitties it is registered in everyone’s ledger with all the transactions. Therefore, if Chuck would say that Alice only owns 6 Cryptokitties, Alice and everyone else in the network can point to their ledger and say that Chuck is incorrect and possibly malicious. This makes copying, fraud or piracy a lot harder.
Cryptokitties are cute and the concept behind it is complicated. That is because owners of these kitties merely own the code and not the visual that they associate the kitty with. However, they rather associate their kitten as “the one with the funny eyes” or “the one that bit Rebecca Black when he was younger”. Therefore, Cryptokitties show that we still have steps to make until we can finally really keep a digital collectible like a tangible Pokémon card and not solely the code.
References:
CryptoKitties. (2018). Some of the rarest CryptoKitties will stop being released on November 30th. Retrieved from: https://medium.com/cryptokitties/some-of-the-rarest-cryptokitties-will-stop-being-released-on-november-30th-ec218f3fc5c4
CryptoKitties. (n.d.) Dragon. Retrieved from: https://www.cryptokitties.co/kitty/896775.
Nguyen, C. (2018). Cat got your wallet? CryptoKitties virtual feline fetches $170K in crypto cash. Retrieved from: https://www.digitaltrends.com/computing/dragon-cryptokitties-most-expensive-virtual-cat/
Posth, S. (2019). Decentralization and Scarcity — Blockchain and the Cultural Industries. Retrieved from: https://medium.com/@posth/decentralization-and-scarcity-blockchain-and-the-cultural-industries-f27068e82863
