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People Spent $1M on Totally Useless Ethereum "CryptoKitties"

Launched a few days ago, CryptoKitties is essentially like an digital version of Pokemon cards but based on the Ethereum blockchain. And like most viral sensations that catch on in the tech world, it’s blowing up fast.Built by Vancouver and San Francisco-based design studio AxiomZen, the game is the latest fad in the world of cryptocurrency and probably soon tech in general.People are spending a crazy amount of real money on the game. So far about $1.3M has been transacted, with multiple kittens selling for ~50 ETH (around $23,000) and the “genesis” kitten being sold for a record ~246 ETH (around $113,000). This third party site tracks the largest purchases made to date on the game. And like any good viral sensation prices are rising and fluctuating fast. Right now it will cost you about .03 ETH, or $12 to buy the least expensive kitten in the game.So now we have people using Ether, an asset with arguably little tangible utility – to purchase an asset with unarguably zero tangible utility. Welcome to the internet in 2017.

CryptoKitty Q&A

Q. How do I get a CryptoKitty?

A. Go to the “Marketplace” and look at the CryptoKitties for sale, or breed two CryptoKitties together.

Q. How much does it cost to buy a CryptoKitty?

A. There’s no standard price for CryptoKitties. Users set their own starting price when they sell their Kitty, and the price goes down until the auction ends or the Kitty is purchased by another user.

Q. Are CryptoKitties like Bitcoin?

A. CryptoKitties are NOT a cryptocurrency. They’re more like a cryptocollectible. The real-world analogy for a cryptocurrency is dollars or pounds; a cryptocollectible’s real world analogy is closer to assets like baseball cards or fine art.

Q. Does it cost money to play CryptoKitties?

A. Unless you are an early access user (they get a free CryptoKitty), yes.

Fraud Potential

I do not know what an "early access" user is since the game is only a few days old. But I sure see a fraud potential: I will sell you my Cryptokitty for $20,000 if you buy mine for $20,000. The bagholder game stops as soon as some sucker not in the "early access" pool buys one.

Virtual Beanie Babies

Let's assume for some reason I am wrong about the fraud potential. In the absence of fraud, buyers still receive nothing more than a useless virtual beanie baby.

At best, some greater-fool believer spent $113,000 for a virtual beanie baby.

Fraud or not, it's absurd.

By Mike "Mish" Shedlock

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