The Real Deal With Crypto Kitties
If you have been lurking in the world of crypto you must have stumbled upon the new sensation that listens to the name CryptoKitties. If you are too lazy to click on the link just think of digital drawings of cats with slight variations where users can breed, gift or sell them.
Sounds absurd yet these little fuckers have clogged up the ethereum network over the past few days. They have also stirred lots of questions leaving people wondering as for why? Why are people so obsessed with digital drawing of cats? Why one sold for $60.000 while many others float around similar pricing?
There are two very likely explanations for the phenomenon. First reason is Art. You know how people gather up in fancy places to buy paintings for millions? Same reason applies to crypto-kitties. Art has been used throughout the ages as a status jewel. The more exclusivity one gains on a piece of art the higher the respect from the wider social circle. Most of the douchebags buying will try and resonate how a replica wouldn't capture the same essence in an attempt to — yet again — show how much "deeper" their perception towards expression of emotion is. They are rich after all and you are not. They "know", you don't and this is another way to explain why.
The second and most obvious reason is money laundering. Let's say you have some millions on the side but you don't want to do anything with them because of taxes. You hire an "art expert" from an elite artistic jerk circle and you get an arbitrary high valuation for a piece of art. You pay the sum and voila. Your money has been transformed into a tax free entity that can be sold thereafter or used inside a building or business in order to increase valuation. When the business containing that piece of art is sold the painting will ride the price. Pretty smart right?
Now imagine you have millions in crypto and you don't know how to cash them due to tax complications. You create a product like CryptoKitties, form an LLC company and then use your funds to purchase insanely overvalued kittens that you just drew. The revenue will be actualised as FIAT on the other end and the taxes will be minimal.
You will be wondering why not everyone is not doing this gig. Well, they do. 99% of all ICO's are money laundering operations if not downright scams. People buy most of their coins with the crypto profits and then use the proceeds to cash out as FIAT that remains as valuation for salaries and such. Whatever remains circulating as tokens is used to cover up the operation and avoid any legal persecution. As long as there is minimal development the gig is still up.
Crypto Kitties are the reflection of everything that has been going on around us since the dawn of time. The medium has changed but the operation is much the same. Like a friend said once in the comments: Apes gonna ape.
Government and organized crime, although superficially "opponents", do not want to eliminate each other. Like rival sports teams in a league that want dumb working taxpayers to pay for the stadiums through taxes, they both want the games to go on year after year. Government (makers of the regulations), and Organized Crime (breakers of the regulation) both want taxpayers to fund their above market value proceeds and lifestyles.
And at a deeper level it is a Punch and Judy show put on by the hidden elite. Grow up people. Rule yourself from within.
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I agree with most of your assumptions, but I do think you overthink this too much. Perhaps people just think it is fun to try a new use case for cryptos. Gamification on blockchain is the future after all. Cryptopimp and crypto puppies on Steem next:) Anyway, what I learned is that Ethereum sucks (some even believe it is a trojan), and that is very bullish for Steem, EOS and BTS, that can handle far more transactions.
Yes, may be it just finny kittens. Looks like whole ETH network was built for only one funny dApp.
Your post resonates with my thinking as well. Cryptokitties is a heck of a neat blockchain experiment/product that utilizes many aspects of the human nature. Many want to own something rare, and humans love to speculate (greed), hence this is why this new game is quite popular. We should have similar dApps on the Steemit blockchain with the coming of SMTs. I would not be surprised if we have Crypto Pokemon, or a Crypto Real Estate Tycoon(real estate management game), or something more useful like a dApp for marketers to be able to rent screen space for their ads on Steemians' blog pages, and the owner of the blog page would get some revenue in Steem or SBD PPC style.
Just some thoughts. Let me know what you think.
its getting interesting day by day.
No matter how silly it may seem, this is a breakthrough for ETH no doubt about it. The ability to have a decentralized app like this bodes well for the future of ETH (scaling issues and the transaction times are a bit nauseating however)
Now everybody knows what is Smart Contracts for.
Wow a very good explanation of the cryptokitties issue, thanks -upped.
@kyriacos let me send you to my latest post for a new crypto/ project ...their presale will be over in 5 days with 1M total supply -this will be a new game changer , so another opportunity to invest and post about...am in already and very happy. Wish you a blessed weekend.
I can sculpt real life representation of your favorite krypto kitty for 100 Steem. this way you will have tangible object in your hand. Who is interested, visit my profile to see sample of my artwork.
I see CryptoKitties as a combination between Tamagotchi and crypto. As time goes on, competition for CryptoKitties will be created and there will be another industry for crypto. Haha.
Or it will just die off in a couple of weeks. Does anybody still remember or play Pokemon GO? ☺ Usually these things are just fads.
In the US:
It very well can be. But I think the possibility of profiting from those cats is attractive enough to keep people around. Pokemon Go was just a novelty because of the connection people had with the brand. I'm pretty sure people have a stronger connection with possible money gains than Pokemon. Only time will tell, I guess.
I think you are right about something. But, it's worth paying tribute to these guys, they used a very clever move, creating these kittens, a dirty move maybe, but it works.
I'm not sure that such investments can be compared with investing money in art, because the price of certain works of art does not fall, it either remains constant or grows with time. If the author was recognized and formed some kind of value on his creation, it will not go down anymore.
With crypto-currency products, such a strategy does not work for sure. So this should be pretty short-lived enterprise to reduce risk.