Cryptokitties is an early demonstration of the ability of cryptocurrency, in this case, Ethereum, to allow two persons, completely unknown to one another, to trade valuable possessions without the fear of being ripped off. Using cryptocurrency ensures that their trade is bona fide and that they actually receive what is promised to them. Imagine meeting a complete stranger, and accepting $500 as payment for something of value which you then hand over to him, comfortable that the entire transaction is safe and sound? Pretty good, huh? People are buying and selling Cryptokitties worth hundreds of dollars doing just that. It’s terrific. Your opinion of Cryptokitties is not relevant here. Granted, not everyone loves Cryptokitties or thinks they are worthwhile.
The Cryptokitties website allows participants to buy, sell, collect, trade, and breed Cryptokitties. They are adorable and sure to be a huge sensation. Even now the site has taken 4% of the Ethereum network and caused huge delays as interest is fierce and commerce brisk. To economists and Crypto enthusiasts alike Cryptokitties shows us the power and promise of blockchain technology to transform the wild, wild west aspects of the world wide web into stable trade platforms in the future.
Perhaps, calling someone averse to new technology a Luddite is too harsh a term. Luddites were trying to stop the advance of technology by destroying labor-saving knitting machines in 19th century England. Today, we’ve come to use the word to mean a laggard, someone slow to adopt new technology. There are several friends I consider true Luddites. These are the folks that confess an aversion to technology, only it sounds more like a condemnation. “I can’t even set the clock on my VCR.”
These are the folks that would ask me which PC they should buy, ten years after everyone else already had a computer. Then, when Apple announced they were coming out with new models in the spring, decide to wait. When I showed off my new Kindle, these same folk would say something like “Nah, I want to feel the texture of the paper in my hands.” That meant to me electronic books hadn’t come to Main Street yet. These conversations have helped me gauge where we might be on the new technology adoption curve as I have been wondering about with Bitcoin. When Bobby says “I’m in” I know the technology has hit its cruising altitude.
So it frightens me when one of these same folk (I’m not mentioning any names) calls to find out how to buy Bitcoin. It seems that there is a new vape product he wants to buy but the dealer only accepts Bitcoin. Wow. It hasn’t been thirty days since the Thanksgiving dinner discussion when we had argued over the Bitcoin bubble. Had he purchased Bitcoin then, he’d never have to think about how much pot cost, ever again.
Now, what to think? Are we finished? Is the run over already? Has Bitcoin reached its fighting weight? Is this what the future looks like? Or, is the adoption curve of this new technology so steep that we are going to see explosive growth ahead that will make this past month’s action seem like the calm before the storm?
I’m beginning to think that that is what we are facing. Just in the last few days, I heard about Cryptokitties.io, the online kittens you buy with Ethereum, which are so popular the sales have slowed the Ethereum network to a crawl. There’s the eSports network switching to Litecoin for its sports gambling. There’s the CBOE and CME (Chicago Mercantile Exchange) which have been heralded for the past couple of months. Their futures markets will bring Wall Street to Bitcoin.
Each of these is guaranteed to contribute a great deal of new, increased traffic to the world of cryptocurrency. Add to those the coming Ripple ala SWIFT network where banks will sign up to use Ripple to expedite International Wire transfers, Cob coins which will introduce to us fee-free trading of cryptocurrencies, and Electroneum which will replace energy-wasteful mining with mining on smartphones. The list is seemingly endless. There are already thousands of new crypto-coins being programmed and introduced. Some won’t make it. Many will. This is going to be huge.
Hearing a rumor that the Ethereum blockchain was getting overly congested by Cryptokitties.co I decided to check it out. Cryptokitties! These guys are adorable. I understand the attraction. Cyber kitties for sale, ownership, and breeding, exclusively paid for by Ethereum, the second most popular cryptocurrency after Bitcoin. Think virtual Beanie Babies. If someone says “Yeah, Bitcoin, but what are you going to do with it?” just point them in the direction of Cryptokitties. I’m sure the demographic, ten-year-old girls are going to be playing with these for a long time to come.
The idea is brilliant; the execution leaves something to be desired. Perhaps the developers rushed to publish too soon. We’ll see. There isn’t much functionality there. I couldn’t find a Kitty that wasn’t already sold for the longest time. I don’t know if that was because it was hugely popular or running too slowly. I couldn’t see my balances, a feature they really avoided on purpose perhaps, and the Ethereum blockchain gobbledegook that appears now and then is only for true geeks. It really has no place in a well-designed playground.
Cryptokitties aren’t cheap, either. The minimum entry fee is $50 worth of Ethereum in the marketplace. But they use the old carny trick — sell coupons that customers use for rides instead of handling cash. The form of currency here is strictly Ethereum. Cryptokitties range in price from FREE to several hundred Ethereum each (which currently sell for $451.00/ea.). Cryptokitty prices are .03 Ethereum ($14) on average. Cryptokitties have DNA, genetic traits, parents, and children. They are absolutely adorable. I can see how an entire culture can be spun around these little fella’s. This site is going to be hugely popular if it isn’t already.
And that, my friends, is how Bitcoin and other cryptocurrencies will gain a toehold in our economy. Cryptokitties, online gaming, gambling, to retail sales of all sorts. As we transition from fiat currency to virtual currency, these examples will lead the way.
Using ethereum as currency means that the money is tied to a contract which may be flexible instead of fixed. Instead of paying X dollars for Y goods, X1 ether is being paid for Y Goods if such and such condition is present, X2 ether if another condition arises, and so forth. The ether is conditional money. As more and more computer programs in our environment start behaving in computerized ways, we will need this sort of currency more and more. For example, our EZPASS will charge different amounts at different times of day, different traffic conditions and for different numbers of people in the car or which toll-booth you happen to be driving through. Welcome to the future.