People have spent over $1M buying virtual cats on the Ethereum blockchain

Launched a few days ago, CryptoKitties is essentially like an digital version of Pokemon cards but based on the Ethereum blockchain. And like most viral sensations that catch on in the tech world, it’s blowing up fast.

Built by Vancouver and San Francisco-based design studio AxiomZen, the game is the latest fad in the world of cryptocurrency and probably soon tech in general.

People are spending a crazy amount of real money on the game. So far about $1.3M has been transacted, with multiple kittens selling for ~50 ETH (around $23,000) and the “genesis” kitten being sold for a record ~246 ETH (around $113,000). This third party site tracks the largest purchases made to date on the game. And like any good viral sensation prices are rising and fluctuating fast. Right now it will cost you about .03 ETH, or $12 to buy the least expensive kitten in the game.

So now we have people using Ether, an asset with arguably little tangible utility – to purchase an asset with unarguably zero tangible utility. Welcome to the internet in 2017.

In all seriousness, it’s a little bit reminiscent of the beanie baby trend where people were paying insane amounts of money for stuffed animals. But if the popularity continues to increase these people may be able to make a return by reselling or breeding their rare kittens, or they’ll be stuck holding the virtual cryptographic keys to a virtual rare kitten when the market crashes in a few day, like eventually happened with beanie babies.

There are a few cool things about the game though, and putting aside the valuation absurdity it’s actually a cool way for beginners to interact with the Ethereum blockchain.

First off, it’s important to understand that since it’s played on the Ethereum blockchain there’s no central entity managing the game. This means users literally own their kittens. Unlike playing Neopets where everything was stored on a central database and your pet was deleted when the company shut down, CryptoKitties is decentralized and will live forever on the Ethereum blockchain.

The game is run via a set of 5 Ethereum smart contracts written by AxiomZen, and users interact with it via their own Ethereum address. Right now the easiest way to do that is by using the Chrome extension MetaMask which gives you the ability to send and receive Ethereum directly in your browser. You then would navigate to the CryptoKitties site which is essentially an interface to interact with their smart contracts so you can buy sell and breed kittens…

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