Top investors gambled $16 million on the blockchain equivalent of Beanie Babies. Now, sales are plummeting

  • In March, investors including Andreessen Horowitz and Union Square Ventures gave a total of $US12 million ($AU16.12 million) to CryptoKitties, a blockchain game for digital collectibles.
  • According to data from blockchain analytics sites, the number of CryptoKitties transactions are a fraction of what they were in December.
  • CryptoKitties cofounder Bryce Bladon says the livelihood of CryptoKitties can’t simply be measured by the number of transactions that happen in a month, and that people’s behaviours have changed as the price of processing a transaction has increased.

When investors gave $US12 million ($AU16.12 million) to a startup called CryptoKitties in March, many raised their eyebrows at the news.

CryptoKitties, which describes its product as one of the world’s first blockchain games, uses blockchain technology to collect and “breed” digital cats. Users can buy colourful, googly-eyed cats, some of which cost thousands of real-world dollars, to trade and “breed” more digital cat offspring.

It’s a bit like blockchain-based Beanie Babies.

Like Beanie Babies, CryptoKitties are considered collectibles. Their novelty lies in the fact that owners can prove that they possess sole ownership of the Crypto Kitty they have purchased. In December, it was reported that one particular Crypto Kitty sold for around $US155,000.

People had already spent millions buying and trading CryptoKitties by the time top-tier investors including Andreessen Horowitz and Union Square Ventures decided to give the company $US12 million. Before the deal went through, one investor in the company told Business Insider that the product embodied one of the most important and applicable use-cases of the blockchain: The ability to safely store digital collectibles online.

But it looks like CryptoKitties itself could be in danger of becoming a short-lived novely. Read more

Zoe Bernard – Business Insider Australia – 17 June 2018