Wednesday’s Word: CryptoKitties

By W. Dowdy White, Spring 2018 IAC Student Intern

Stop what you are doing and read this right meow. If you haven’t been living under a rock for the past two years, the odds are that you have heard of popular blockchain technologies, that underlie cyrptocurrencies, like Bitcoin, Ethereum, or Litecoin.

If you have been living under a rock, there are new digital currencies that are “described as peer-to-peer virtual currenc[ies] that [are] used like money – [they] can be exchanged for traditional currencies, such as the U.S. dollar, or used to purchase goods or services . . . .” Unlike the U.S. dollar, these currencies are neither backed by any government, nor are they bound by a central governing authority.

Have you ever been on Facebook or another social media site when you receive a notification from one of your friends or followers asking you to play a certain game that involves throwing digital birds at buildings or maintaining a digital farm? Of course you have. Well, there is a new similar gaming fad presently overwhelming cryptocurrency users that is known as CryptoKitties. Yes, kitties – digital felines to be exact.

CryptoKitty example from http://www.cryptokitties.co/

Currently, users of the Ethereum currency known as ether can purchase digitally animated cats that live and breed on an ether user’s blockchain. CryptoKitties is a company that describes its game product as “one of the world’s first games to be built on blockchain technology . . . [that includes] cryptocollectibles . . . .” Instead of your typical currencies, this game allows you to “buy, sell, or trade your CryptoKitty like it was a traditional collectible  . . . .” Moreover, you can feed your CryptoKitty as well as breed it with other CryptoKitties to produce new offspring, which the company promises will be as unique as you are.

Why the heck are these so popular? According to the New York Times, over 180,000 people have signed up for CryptoKitties. Additionally, a variety of people have spent about $20 million in ether, and more than 10 million kitties have sold for over $100,000 a piece. It seems that many CryptoKitty owners feel that the game offers a sense of childlike wonder and simplification to the complicated and sophisticated world of cryptocurrencies, and people seem to be responding well to their new digitally furry friends.

Why do you need to know about this?

Despite the views of a few pessimistic economists who remain skeptical, it appears that blockchain technologies and cryptocurriencies are here to stay for the time being. In the complicated world of investments, the Securities and Exchange Commission (SEC) tells citizens that understanding your investments is crucial. In fact, the SEC warns consumers to critically analyze their potential investments in order to understand the risks associated with each purchase.

If you are an Ethereum user and you plan on purchasing a CryptoKitty, just know you are not alone. As long as you have enough financial capital, you can parent one of the millions of CryptoKitties crawling around.