It's common knowledge that the internet loves cats, and CryptoKitties showed just how much.
CryptoKitties are digital cats sold as non-fungible tokens (NFTs) and also one of the first attempts at a blockchain game. Days after the launch, one CryptoKitty sold for more than $100,000 in Ethereum (ETH -0.26%), and the game had already recorded more than $1 million in sales.
Making it even more unbelievable is that this is a game only in the loosest sense. There's no goal and hardly any gameplay. All you do is collect and breed digital cats. In this guide, we'll cover how CryptoKitties became a hit and if these NFTs are still worth buying.
What makes CryptoKitties unique?
CryptoKitties are digital collectibles used to play the game of the same name. Each CryptoKitty has its own unique appearance and genetic Cattributes that determine its rarity.
Players can buy, sell, and breed CryptoKitties. When you breed two CryptoKitties, you get a new one with Cattributes based on the genes of its parents. There can also be mutations, where a newborn will have a trait that it didn't inherit from either of its parents.
As a game, CryptoKitties doesn't have any unique features we haven't seen elsewhere. There are other blockchain games that let players collect and breed digital creatures, with Axie Infinity (AXS -0.78%) being one of the most popular.
The success of CryptoKitties is mainly due to two factors. Most importantly, it was an early attempt at blockchain gaming, so it was something new at the time it launched. And they're digital cats with cool designs. Enough said.
Where CryptoKitties came from
Axiom Zen, a Canadian innovation studio that helps build start-ups, created CryptoKitties in September 2017. CryptoKitties was released to the public on Nov. 28, 2017, and it was the first game built on the Ethereum blockchain.
The game was practically an immediate success. Within a week, it had more than 60,000 users and had processed more than $5 million in transactions. At one point, CryptoKitties was responsible for roughly 25% of the traffic on Ethereum.
Axiom Zen spun off CryptoKitties into its own company, Dapper Labs, in March 2018. Since then, Dapper Labs has been in charge of managing the game.
While CryptoKitties started on Ethereum, the developers later decided to build a custom blockchain for it, in part because of the network's congestion. They created the Flow blockchain in 2019 and transitioned CryptoKitties to it in 2020.
How CryptoKitties works
CryptoKitties are breedable virtual cats that are bought and sold as NFTs. There are four types available: Normal, Fancy, Special Edition, and Exclusive. Every CryptoKitty has 12 Cattributes, including its pattern, eye shape, environment, and other characteristics. While Cattributes determine the appearance of Normal Kitties, this isn't always true with other types.
Any two Kitties can be bred, with one acting as the matron and the other as the sire. CryptoKitties are gender-fluid, so they're all able to fill either role. You can breed two of your own Kitties or breed one of your own with a public sire.
After breeding, you get a new Kitty. The parents need to go through a cooldown period before they can breed again. The cooldown period can take anywhere from one minute to one week, depending on a Kitty's generation.
CryptoKitties are stored in NFT wallets. Other than breeding your Kitties, you can also put them up for sale on the game's marketplace or offer them as public sires to be used for breeding.
Partnerships
Although CryptoKitties has partnered with other blockchain games, including Gods Unchained and MegaCryptoPolis, its developer has been making the biggest moves. Dapper Labs has partnered with the NBA, NFL, and UFC to launch NFT marketplaces for each sport.
The most successful by far has been NBA Top Shot, which has recorded more than 20 million transactions and more than $1 billion in sales.
Unique risks
The risks of CryptoKitties depend on why a person is buying them in the first place. If you decide to buy them for fun, then you're not really risking anything. It's like buying a Tamagotchi or a Beanie Baby.
It becomes a risk, and a big one at that, if you decide to buy CryptoKitties as an investment. Any type of collectible, digital or physical, will fluctuate in value, depending on its popularity at the moment. That's practically impossible to predict, so you may not be able to sell your CryptoKitties for more than you paid.
CryptoKitties became very popular shortly after the game's release. After peaking on Dec. 10, 2017, interest in CryptoKitties fell dramatically. In September 2021, they had a brief resurgence, including sales of more than $7 million in a single day, likely motivated by a popular NFT collector taking an interest in them.
Is CryptoKitties a good investment?
CryptoKitties aren't a good investment, but, to be fair, they're not intended to be one. The game's website makes that clear. It advises new players to have realistic expectations and clarifies that "this is a game centered around collecting digital cats, not an investment portfolio or a get-rich-quick opportunity."
The only reason to buy CryptoKitties is if the game interests you. Although you can make money from it if you’re lucky, it's not worth pursuing as a money-making venture. If you want to invest in cryptocurrency and blockchain projects, there are much more suitable options. The two largest cryptocurrencies, Bitcoin (BTC -2.22%) and Ethereum, are both good places to start. You can also try cryptocurrency stocks if you want something that's easy to invest in using a standard brokerage account.
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How to buy CryptoKitties
To buy CryptoKitties, you'll need a crypto wallet with Ethereum, the cryptocurrency used on its marketplace. You can find Ethereum on almost all the best crypto exchanges. After you purchase it, transfer it to your crypto wallet (if you don't have one, Metamask is a popular choice).
Go to the CryptoKitties website and click "Start." You'll be prompted to provide your email address and enter a nickname to create an account, which is required to purchase CryptoKitties. Once you've created your account, browse the site's catalog and pick out the Kitties you want to buy.
CryptoKitties was a case of the right concept at the right time. It's a fun idea that came along during the early phases of blockchain gaming, and it's still available today for people who want their own digital cats.
