Chapter 6. CryptoKitties: Blockchain-Based Collectibles

Every new technology gets a game that helps bring it careening into the mainstream. Social networks had FarmVille. Mobile phones had Angry Birds. And, its investors hope, blockchain has CryptoKitties.1

—Nellie Bowles, The New York Times

“Oh, no.”

Mack Flavelle, chief creative officer of Dapper Labs and cofounder of CryptoKitties, was walking up the basement stairs at his parents’ house while glancing at his phone, when he got hit with a one-two punch.

First, he saw hundreds of messages from prospective kitten buyers asking him why the CryptoKitties network was moving so slowly: it was taking up to two hours for their transactions to process. Then his eyes were drawn to an email with the heading, “We just sold a kitten for $30,000.”

When Mack reached the top of the stairs, his father saw the look of shock and surprise on his son’s face. Stunned, the young entrepreneur turned to his father and said, “Everything is broken.”

For most blockchain projects, the problem is getting enough participants to grow your blockchain. In less than a day, Mack had run into the opposite problem: there were so many users that CryptoKitties was slowing down the entire Ethereum network. Worse, the exorbitant prices that people were paying for these virtual kittens was spiraling out of control: within 12 hours, one would sell for $100,000.

The blockchain community was livid that this silly game, with its colorful cartoon cats, was taking over ...

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