The Pending Battle Over Cuddly Crypto-Pets - OZY | A Modern Media Company

The Pending Battle Over Cuddly Crypto-Pets

The Pending Battle Over Cuddly Crypto-Pets

By Skot Thayer


Because there are millions of dollars — and the future of two industries — at stake. 

By Skot Thayer

In December 2017, an unusual traffic jam brought the Ethereum network that powers Ether — one of the largest cryptocurrencies after bitcoin — to a standstill. Daylong delays hit requests that would normally take minutes. But it wasn’t the work of a devious hacker. The network’s pipeline was clogged by digital pets, blockchain-powered cartoon cats called CryptoKitties — and meows like theirs are increasingly echoing across the cryptocurrency world.

Blockchain technology, which is already disrupting technology, transactions and economies, is now throwing up a wave of gamified applications focused on virtual pets that are finding owners and breeders across geographies.

In January, Chinese search giant Baidu launched Leci Gou, a blockchain game that allows users to collect cartoon puppies. Days later, another blockchain application, CryptoDogs, launched in China, powered by the Achain network — another blockchain platform. Etheremon, a blockchain game that offers a chance to catch, breed and send digital monsters into battle, has launched a beta version. And in February, CryptoKitties launched in China and on mobile phones.

With blockchain, gaming suddenly becomes open, transparent, portable and extensible.

Arthur Camara, developer, Axiom Zen

This explosion of gamified blockchain applications is causing some experts to worry whether the platforms carrying them can handle the increased traffic. And deeper concerns about digital currencies, dubbed by some critics as little better than Ponzi schemes, are making major economies, from South Korea to India, step up regulations against the use of cryptocurrencies. But the very emergence of these blockchain-fueled pets at a time of apparent uncertainty for the cryptocurrency universe is a reminder that technology is like a genie in a bottle. While some of these games will die, newer, more advanced avatars will likely replace them, because the technology powering them isn’t going anywhere.


“We think that blockchain games unlock new categories and possibilities,” says Arthur Camara, a developer with Axiom Zen, the Canadian startup behind CryptoKitties. “With blockchain, gaming suddenly becomes open, transparent, portable and extensible.”

The attraction of these gamified applications isn’t hard to understand. With CryptoKitties, for instance, each cat has its own unique digital DNA. The cats can be bought, sold, traded and bred to generate entirely new cartoon kitties with a combination of their parents’ features and traits. Things like fluffy tails, spots and even dragon wings can be inherited and passed down the blockchain.


Is this the future of gaming?

Source CryptoKitties

In the gaming world, this also means that, unlike in the past, data — your characters, equipment or pets — are owned fully by the player. Think of it as a form of micro-transactions that the players are as invested in as the developer. Players can share their data across games that use the same platform — all Etherium-based games for CryptoKitties fans, for instance — in a digital equivalent to how Nintendo’s Amiibo allowed players to import characters across a variety of Nintendo-first party games.

There’s big money to be made. Axiom Zen’s total sales exceeded $12 million at the beginning of December, with individual cats being traded for up to $110,000 worth of Ether. Unsurprisingly, that success has spawned competition, which is growing increasingly intense. Leci Gou and CryptoDogs have stolen a lead over CryptoKitties in the Chinese and Korean markets. And in February, another Ethereum-powered game, Etherbots — where robots battle each other — overtook CryptoKitties in terms of transaction volume on the platform.

The rapid spread and gain in popularity of these blockchain games has also sparked questions. As with other pillars of the cryptoworld, users flocked to the CryptoKitties platform looking to make a quick profit, but the bubble burst at the start of 2018 — with the rest of the cryptocurrency world. The December delays on Ethereum have served as a warning that platforms need to drastically upgrade their capacity to handle larger traffic volumes, especially as they move to additional markets and platforms — like CryptoKitties’ move to the mobile phone. And Etheremon faced massive public backlash after it inadvertently used artwork without proper permission. The developers swiftly worked out a deal with the artist and claimed the error was the result of unfamiliarity with copyright laws.

The main challenge these games face, though, is the limited attention span of the cryptocommunity itself. According to Emin Gün Sirer, a computer science professor at Cornell University and co-director of the university’s IC3 initiative to advance the “science and applications of blockchains,” the cryptofield “consists mostly of tech-savvy early adopters, who are quick to jump on new platforms, and just as quick to abandon them for other, newer ones.” On the other hand, says Sirer, “whereas a traditional game might shut down if the creator goes out of business, blockchain games will live on forever.” There are technical limitations, though. “Interacting with blockchain is not simple or straightforward yet, and games succeed to the extent that they can make this experience appear smooth to the audience,” says Sirer.

Still, CryptoKitties has remained among the top decentralized applications — ones that allow users to also in part act as developers — on the Ethereum network. Just this month, CryptoKitties raised $12 million in funding from investors at Andreessen Horowitz and Union Square Ventures.

And there’s growing evidence that these blockchain-based games are the first window into the technology for tens of thousands of users, says Daniela Díaz Reyna, another Axiom Zen developer. Robbie Ferguson, co-founder of Fuel Bros, the team behind Etherbots, says games are crucial to the widespread adoption of blockchain tech and principles. 

Expect the battles between blockchain platforms for newer markets to intensify further. The litter of digital pets born out of the marriage of blockchain technology and gaming is here to stay.

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