Is the cryptokitty craze proof of blockchain’s bright future?
Apple and Microsoft microcomputers were seen as toys when launched while Amazon and Ebay were hobbyist sites. Could digital cats turn out the same?
Blockchain analyst Richard Chen, writing for medium.com, puts forward an intriguing defense for Crptyokitties. In recent months, writes Chen, these cartoon cats that “breed” on the blockchain and can be traded using the crypto token Ethereum, sometimes for tens of thousand of dollars, have “often been cited as an example of stupid money being thrown into crypto.”
Chen points to a March funding round for Crptyokitties that raised $12 million and also at the digital kitty mania that exploded in December, that threatened to jam the entire Ethereum network.
But, argues Chen, things that are dismissed as “toys” often produce good startup ideas.
Toys can be cool, loved and valuable, but crucially are not seen as important. Chen quotes from an essay entitled “How to Get Startup Ideas” by Paul Graham. “Microcomputers seemed like toys when Apple and Microsoft started working on them.”
Chen goes onto say that Amazon started as a hobbyist online bookstore that carried rare books not found in traditional brick and mortar stores, while Ebay started as a marketplace for collectibles such as Pez dispensers.
The Crptyokitties retain value, continues Chen, because of rarity. “Scarcity is the same reason why art is valuable.”
Which all means, concludes Chen, that “CryptoKitties can be thought of as a proof-of-concept “toy” for the future “tokenization” of serious assets.
“As a toy, people are much more willing to tolerate current problems with … scalability and cost of on-chain computations … And in doing so, we can have productive discussions around these problems and build solutions that lay the foundation for “serious real-world applications.”
This is all very well argued, interesting and probably highly significant. But is a digital cat really worth $60,000?