Cryptokitties: The Blockchain's Latest Fad, As Valuable as Overhyped Beanie Babies

On the internet, you're free to spend your money on whatever catches your fancy. Whether it's overpriced wellness items from Goop or a novelty Star Wars mug from Amazon, no one can stop you. However, a recent digital phenomenon—virtual cats on the blockchain—has even the most extravagant online shoppers raising their eyebrows.

Cryptokitties, a game built on blockchain technology that debuted in 2017, has secured $12 million in funding from investors.

So how does it work? Essentially, players trade their ether—the digital currency of the Ethereum network—for cartoonish images of frowning felines.

In more depth: users can acquire distinct Kitties, each boasting unique 'Cattributes' (such as fur patterns, eye shapes, and highlights), rare 'Mewtations,' and a full family tree. The goal is to purchase and 'breed' these digital cats, then sell the offspring for ether. And thanks to blockchain's public ledger, every transaction—or 'trans-cat-tion'—is securely recorded.

Players can also 'like' each other's kitties and write their own quirky bios. For instance, one cross-eyed gray cat with yellow stripes has the bio: 'Oy. I’m Kitty #564551. My cousin twice removed is Genghis Khan. My secret indulgence is whiskies. This will be an amewsing friendship.'

Currently, Cryptokitty prices vary from about $1.15 to a staggering $58.4 million—an absurd sum for a homely digital pet.

Before you despair for humanity, consider this: the valuation of the cryptocurrency market is just as arbitrary as the price of any Cryptokitty. In objective terms, cryptocurrency holds no intrinsic value—and it's far less visually appealing than a JPEG of an unappealing cat.

Bitcoin's worth exists only because we collectively agree it does. It has no practical use—you can't construct a home from it or fashion it into adornments. Its value fluctuates based on scarcity and demand. Similarly, Cryptokitties are each unique and limited in supply, with prices assigned arbitrarily. The same principle applies to Beanie Babies and sports trading cards.

There's no harm in introducing blockchain to cat enthusiasts, provided they understand the risks involved.

For now, players can only sell and breed their kitties, but CEO Roham Gharegozlou has plans to broaden the Cryptokitty ecosystem.

“This is just the first glimpse of what a blockchain-powered game economy might become,” Gharegozlou told Business Insider.

If you're aware of the dangers, feel free to jump on the Cryptokitty bandwagon while it's trending. But unless you're exceptionally skilled at the game, don't expect these virtual pets to fund your retirement.

Disclosure: A number of Futurism staff members, including the editors of this article, personally hold investments in various cryptocurrency markets. These personal financial interests do not influence our editorial coverage.

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