Etheremon is the latest crypto-craze, but be careful before you dive in

It was only a matter of time before someone tried to copy the success of CryptoKitties, a virtual collectibles game that was so popular it hogged the Ethereum network nearly entirely for itself in early December. The new game is called Etheremon, and it allows you to purchase, with ether (Ethereum’s …

It was only a matter of time before someone tried to copy the success of CryptoKitties, a virtual collectibles game that was so popular it hogged the Ethereum network nearly entirely for itself in early December.

The new game is called Etheremon, and it allows you to purchase, with ether (Ethereum’s currency), virtual monsters which earn you interest depending on their popularity.

The game in its current state is incredibly basic: You buy pictures of monsters and in the future you may be able to trade or even do battles with them. To play, all you need to do is visit the site with an activated Metamask browser extension that’s funded with some ether.

Right now, pretty much the only thing you can do with your Etheremon is keep them, which earns you a small amount ether every time someone else buys that same type of Etheremon, which aren’t cheap — prices range from 0.37 ETH ($298) to 1.2 ETH ($966).

Okay, I stayed up all night buying #Etheremon—basically #Pokemon powered by #Ethereum. I am officially done accumulating… for now. | https://t.co/sHvdyErRZR@myetheremon#cryptokittiespic.twitter.com/grC9OpVVW0

— Brent Mihalov (@brentmihalov) December 20, 2017

And therein lies the problem: In its current state, this is little more than a Ponzi scheme, in which early adopters earn money from people joining in down the line. Once newcomers stop coming, the entire thing collapses.

This doesn’t seem to bother players who are jumping head over heels to get in on the action early. One of the game’s smart contracts currently accounts for 2.82 percent of transactions on the Ethereum network and has caused transaction fees to skyrocket.

The game was also quickly called out on Reddit for not being truly decentralized; according to one commenter, the owners of the game can withdraw all of players’ funds at any time.

One of the game’s developers replied in the thread, claiming they are acting transparently and that the “whole world” would know if they try to steal players’ funds. While that may be so, the possibility that this may happen is quite unsettling.

Also, the game’s monsters currently look like eggs as the initial imagery was apparently used without permission.

A notice on the game’s website states that the game’s developers “are in talks with artists regarding used artworks. All images are subjected to change.”.

These guys don’t have my permission, don’t spend any money on this, and share this so people are aware

https://t.co/iMY2CH9W7U

— Smiley-Fakemon ☺ (@SmileyFakemon) December 20, 2017

Disclosure: The author of this text owns, or has recently owned, a number of cryptocurrencies, including BTC and ETH. He also owns one Etheremon.

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Vitalik Buterin: Network Speed under Test Conditions is Misleading

Vitalik Buterin: Network Speed under Test Conditions is Misleading. Vitalik Buterin criticized the habit of blockchain projects to boast with great transaction speeds under test conditions. author by Christine Masters , 19 December. Subscribe. articleStartImage. Transactions are piling up on the Ethereum …

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Transactions are piling up on the Ethereum network, and some projects are boasting much higher transaction speeds. But according to Ethereum’s creator, those speed tests under ideal conditions are misleading.

Even if a node can process hundreds or thousands of tx/sec in a closed simulation, that does not imply that it can support a public blockchain that can process that much.

My Parity node can run >500 tx/sec on my laptop, but Ethereum main chain is only processing 11.5 tx/sec. pic.twitter.com/H0UCD0FRTR

— Vitalik Buterin (@VitalikButerin) December 19, 2017

Projects that boast great transaction speeds include IOTA, EOS and other attempts at a real-time, decentralized network for a much higher number of transactions.

The Ethereum blockchain works through around 13 transactions per second, whether financial or related to some form of smart contract or distributed computing. The presence of even a few distributed apps such as decentralized exchanges or the game CryptoKitties seriously hamper the network, by creating transaction backlogs.

The Effect of Network Load:

CryptoKitties Burn Up 15% of Ethereum’s Gas

Buterin went on to perform an analysis on gas price for transactions, coming up with a rather complicated story where it is not trivial to optimize fees and the type of transactions. And sometimes, a block may be produced handling many low-fee transactions, while other blocks would remain empty with high-fee transactions.

At the moment, the CryptoKitties fad seems to have subsided, with less than 10% of the gas burned for transactions. EtherDelta remains the single biggest gas guzzler.

Slower transactions happen for various reasons independent of the central features of the project. While in theory the IOTA tangle promises to work through as much as 100,000 transactions per second, in reality connections are much slower to establish, and the current internet infrastructure slows down the network, while users take long to discover their IOTA balance.

At the moment, the Ethereum network has between 10 and 13,000 pending transactions, while Bitcoin is stuck with more than 150,000 unverified transactions for days, mostly related to trading.

Still, the Ethereum network seems to grow well, recently reaching a record level of daily transactions:

Hi @VitalikButerin@gavofyork@VladZamfir@nicksdjohnson and Ethereum team at large:

Although I give you hell for the social side and policies, the last few days were a big test for the network and it is proving to be a very sound design. Congrats! 👍👍🏻👍🏼 https://t.co/zoBLBv8JJj

— Donald McIntyre (@TokenHash) December 12, 2017

A tool to track the progress of Ethereum was created by Etherchain, and lauded by Buterin for the thorough information. Ethereum is gaining more price support as its growth took it above $700 where it has stabilized for now.

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Meet CryptoKitties, the $100000 digital beanie babies epitomizing the cryptocurrency mania

Players have spent the equivalent of $6.7 million and counting buying CryptoKitties, which can sell for as much as $114,481.59, according to third-party research from developer Niel de la Rouviere. The ethereum-based kitten trading and breeding game clogged the digital currency’s network this week, …

“Think breedable Beanie Babies.”

So states the FAQ for CryptoKitties, a new game for collecting, breeding and selling digital cats that is so popular, it is clogging up the network of digital currency ethereum.

Players have spent the equivalent of $6.7 million and counting buying CryptoKitties, which can sell for as much as $114,481.59, according to third-party research from developer Niel de la Rouviere. The median price of a kitten is $25.04.

Just three days ago, the site had logged about $1.3 million in sales.

“The popularity of virtual cats fits the euphoria we see elsewhere in the crypto-currency space,” Peter Atwater, who studies market sentiment and heads Financial Insyghts, said in an email. “It feels very reminiscent of the Candy Crush craze that helped propel the King Entertainment IPO back at the peak of the ‘Unicorn’ era in mid 2014.”

Source: Niel de la Rouviere

Created by Vancouver-based Axiom Zen, CryptoKitties launched to 200 users on Thanksgiving and was opened to the public last Tuesday. More than 41,000 unique kittens have been sold already, according to de la Rouviere’s data.

But CryptoKitties’ popularity indicates blockchain technology still has a long way to go to reach its hype.

CryptoKitties accounted for about 13.5 percent of power on the ethereum network Wednesday morning, said Benjamin Roberts, co-founder and CEO of Citizen Hex, an ethereum-focused start-up backed by three Canadian venture funds.

“With Cryptokitties every Ethereum user has suddenly taken on the computational overhead of running a mainstream application,” Roberts said in an email. “This overhead affects not only Cryptokitty transactions, but every other transaction on the Ethereum network.”

Blockchain project SophiaTX postponed its token sale by 48 hours this week to Thursday, due to network clogging by CryptoKitties.

CryptoKitties also had to raise its “birthing fee” at least twice due to network congestion. The company tweeted Monday it was raising the fee from 0.002 ETH (about 90 cents) to 0.015 ($6.69).

Tweet

In response to criticisms that ethereum clearly lacks the scale to handle such demand, ethereum co-founder Joseph Lubin emphasized the quality of the global developer team working on the network’s open-source software.

“With the largest developer community of any blockchain platform by far, the Ethereum blockchain is in an excellent position, especially at this early stage, to be able to deliver on its potential,” Lubin said.

CryptoKitties players buy and sell unique digital kittens using ethereum. With two kittens, players can then breed their own digital kittens and sell them on the marketplace. The starting price is set by the user, and the price goes down until the end of the auction or the kitten is sold. The CryptoKitties team plans to release a new CryptoKitty every 15 minutes until Nov. 2018, whose starting price is set by the average of the last five CryptoKitties that were sold, plus 50 percent.

A 256-bit genome for each kitten means there are 4 billion possible variations, according to the company. The primary distinguishing feature is “cooldown” time, or the time it takes a kitty to recover after breeding. These vary from “fast” at 1 minute to “Catatonic” at 1 week and “will increase each time the Kitty breeds.”

The pricey $114,481.59 CryptoKitty, named Genesis, has a fast, 1-minute cooldown.

Source: CryptoKitties

“From a high level, abstract point of view, this stuff is almost digital artwork, if you will. It doesn’t have any inherent value other than what you think it’s worth,” said Joey Krug, co-chief investment officer at Pantera Capital, one of the earliest investors in bitcoin.

“It does lend weight to the idea that the market is exuberant,’ he said. But “just because a market is exuberant [it] doesn’t mean that market is fraudulent.”

The rapid surge of interest in CryptoKitties mirrors the exuberant growth of cryptoassets overall, which some have compared to the mania around tulip bulbs in the 1600s and the Beanie Babies fad in the 1990s. Enthusiasts of digital currencies and their blockchain technology point out that after the tech stock bubble burst in 2000, companies such as Facebook and Google emerged as giants.

Bitcoin has leaped more than 1,200 percent this year to a record above $12,800, according to CoinDesk. Ethereum has climbed 5,500 percent to $446, and the entire market value of cryptocurrencies has exploded from around $17 billion at the start of this year to nearly $376 billion Wednesday, according to CoinMarketCap.

Ethereum’s version of blockchain technology allows developers to create applications on top of the network, which does not need a centralized, third party to operate. Proponents say the system could transform the world as much as the internet did.

“The tulip mania comparison needs to die,” said Brian Patrick Eha, author of How Money Got Free: Bitcoin and the Fight for the Future of Finance. “Whether or not there is a bubble today in the price of bitcoin and other digital assets, you can’t compare a short-lived fervor for exotic flowers with the rise of an entirely new asset class built on game-changing technology.”

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Blockchain-based kitten trading game takes cryptocurrency world by storm

While that may sound somewhat technical, the game itself, launched Nov. 28, has surged in popularity. Some estimates suggest that the game’s transactions now account for 4 percent of all transactions on the Ethereum blockchain, with that number continuing to grow. Figures from Kittysales indicate that …

In an unexpected twist, cats may be the next big thing in cryptocurrency, thanks to a new game that uses Ethereum.

Called Cryptokitties, the game allows players buy, sell and breed unique cartoon kittens. According to Bitcoinist, the object of the game is to acquire cartoon kittens, each with a specific set of attributes, and then try to generate kittens with rare attributes by “breeding” them with other cats in their stable. Players looking to breed desirable kittens can acquire or sell kittens on a marketplace for the game that’s exclusively transacted on the Ethereum blockchain.

The Ethereum blockchain differs from the one used by bitcoin in that it supports contracts, so the kittens are booked as digital assets recorded and transacted on the Ethereum blockchain, including the transfer of the digital kitten between users.

While that may sound somewhat technical, the game itself, launched Nov. 28, has surged in popularity. Some estimates suggest that the game’s transactions now account for 4 percent of all transactions on the Ethereum blockchain, with that number continuing to grow. Figures from Kittysales indicate that total sales of the digital kittens now total 20,615 as of 8:30 pm EST today, involving the transfer of 3,384.56 ETH worth a total of just over $1.6 million.

If the idea of breeding and selling cats on a cryptocurrency platform sounds a bit like an elaborate joke, in part it is meant to be. Elsa Wilk, CryptoKitties’ marketing director, said that “our approach to brand and marketing is, in part, a tongue-in-cheek critique of the ICO market today,” referring to the boom in initial coin offerings by sometimes dubious companies. But Wilk added that it’s also meant to provide education to the broader public via a fun, interactive game, and so far it appears to be starting to achieve that purpose.

Given the explosive growth of ICOs, complete with various scams and tulipmania-style investment along the way, a game that utilizes tradable kittens is certainly no worse, and perhaps arguably better, than many of the ICOs that have attracted investors to date.

Image: Cryptokitties

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