People Spent $1M on Totally Useless Ethereum "CryptoKitties"

Launched just a few days ago, people have spent over $1 million on totally useless Ethereum-based "CryptoKitties".

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.

CryptoKitty Q&A

Q. How do I get a CryptoKitty?

A. Go to the “Marketplace” and look at the CryptoKitties for sale, or breed two CryptoKitties together.

Q. How much does it cost to buy a CryptoKitty?

A. There’s no standard price for CryptoKitties. Users set their own starting price when they sell their Kitty, and the price goes down until the auction ends or the Kitty is purchased by another user.

Q. Are CryptoKitties like Bitcoin?

A. CryptoKitties are NOT a cryptocurrency. They’re more like a cryptocollectible. The real-world analogy for a cryptocurrency is dollars or pounds; a cryptocollectible’s real world analogy is closer to assets like baseball cards or fine art.

Q. Does it cost money to play CryptoKitties?

A. Unless you are an early access user (they get a free CryptoKitty), yes.

Fraud Potential

I do not know what an "early access" user is since the game is only a few days old. But I sure see a fraud potential: I will sell you my Cryptokitty for $20,000 if you buy mine for $20,000. The bagholder game stops as soon as some sucker not in the "early access" pool buys one.

Virtual Beanie Babies

Let's assume for some reason I am wrong about the fraud potential. In the absence of fraud, buyers still receive nothing more than a useless virtual beanie baby.

At best, some greater-fool believer spent $113,000 for a virtual beanie baby.

Fraud or not, it's absurd.

Mike "Mish" Shedlock

CryptoKitties, OTOH, are a nice way to take money from morons.

CryptoKitties are outside the control of the Fed, mandate-breaking Draghi and other n'er do wells. Better than contracts on gold (that may or may not exist) in conditions of uncertainty, it would not surprise me. Shame on you all for doubting this new panacea!

Why I am reminded of the "Beenie Baby" craze....but this one has a tag protector!

Vancouver startup likely means some young Asian at the helm. The company is a shell firm designed to funnel cash past capital controls out of China, using virtual transactions as an excuse. Companies like that are all over the place and $1mil isn't the amount of money sane people wasted on cat avatars - that is the amount of money someone moved out of China via a shell firm. That's all it is.

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@metronome is right, this is all about money laundering.

@Metronome - sounds plausible. I wonder where law enforcement is. Isn't money laundering still illegal?

One of, if not the, most endearing traits of cryptography, is it enables people to route around whatever nonsense some scumbag and his idiot army has figured it benefits them to claim is “illegal.”

By the standard of any reasonably legitimate universal law, capital controls are what is illegal. Not routing around the trash attempting to enforce them.

Stuki, thank you! In an age where common sense has become increasingly uncommon, it's always nice to get a breath of fresh air.

SweetKenny, it has been the greater abuses by foreign govts & CB's that has delayed the death of the dollar, not Bitcoin. If anything Bitcoin will expedite the death of the dollar, as money that would normally seek the RELATIVE safety of the dollar is choosing crypto's. The next bubble is govt bonds. Bubbles are in assets, not currencies. Bubbles will occur in tokens, but not in the digital currencies that purchase them. How are digital currencies imaginary paper wealth when they are purchased with fiat, and are not hypothicated, rehypothicated, or lent into exisitance? The collapse of fiat is foreshadowing the rise of Bitcoin. You are correct that CB's and PPT have nothing to do with Bitcoin, which is why the anti-establishment embrace it, and so should you.

There have been many fraudulent dot.com's, but it did not mean the internet was not valid. The blockchain is equivalent to the internet. The apps (tokens) that identify value will survive and thrive. There are many stupid apps that utilize the internet that I see little value in, but make millions. Value is in the eye of the beholder.

The public plowing into various forms of crypto does not prove crypto is better than government managed fiat. All it proves is people are desperate for something more honest than bank credit, and a group using the pseudonym “Satoshi Nakamoto” figured out how to tap into that desperation. Desperate people do not usually make good investment decisions.

With any luck, central banks and governments will realize the crypto bubble is a hint they need be better stewards of their fiat systems. I also hope that law enforcement makes a reasonable effort to protect the public from what are likely to be crypto scams. If that does not happen, then I doubt even honest and fungible crypto is going to cure what ails us.

I take back my earlier sarcasm about CryptoKitties being Bitcoin except with regard the SEC and FTC. With it being based on Ether’s non-fungible token standard #721, it really is more like virtual “breedable beany babies” as the developers describe it. It is as though one of those lunatic Japanese game shows has gone viral. Ether transactions from CryptoKitties exploded so much overnight that the “birthing fee” just increased by 7.5x. Craziness.

CryptoKitties Game Takes Ethereum By Storm: Immortal, Bisexual, Breedable Cats To Collect
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