Cryptocurrency and blockchain technology have been increasing in popularity for some time, starting with Bitcoin and venturing into a wide range of digital collectibles worth ridiculous sums of money.
In September 2017, the Ethereum network launched the ERC-20 token standard, a standard that would change the game. Its non-fungible tokens (NFTs), unique tokens you can’t interchange like Bitcoin and Ethereum, could be introducing scarcity to the equation.
Shortly after the launch, what is now known as Dapper Labs introduced the blockchain game CryptoKitties. It quickly became a craze. But what exactly is CryptoKitties, do the NFTs have value, and how do you get involved?
What Are CryptoKitties?
CryptoKitties is a blockchain game featuring digital cats as NFTs, or crypto collectibles. In the decentralized application, or dApp, an application built on a decentralized platform that’s not governed by a single party, players buy, sell, trade, and breed a decentralized collectible the likes of Beanie Babies.
Each cat in the game is unique, as is naturally expected of NFTs today. The collectible’s uniqueness is stored in a “smart contract,” a self-executing agreement between the buyer and seller included directly in the lines of code, offering both scarcity and security. These contracts live on the Flow blockchain.
The game uses Ethereum (ETH) cryptocurrency. That adds an exciting twist to ownership of the collectibles. As the value of Ethereum rises, the value of tokens that use the Ethereum economy tend to rise as well, outlining one of the ways to make money with CryptoKitties.
The concept works much like the value of fiat currency (such as the U.S. dollar) when used to purchase traditional investments. When the dollar is more valuable, investments you bought with dollars also increase in value.
How Does CryptoKitties Work?
It all started with the platform’s genetic algorithm, a computer algorithm designed to ensure that each kitten in the game is born with a unique genome stored on its smart contract. The kittens all have their own “cattributes,” a wide range of features, including things like fur style, color, ear shape, apparel, and even background.
These features combine to point to the rarity of the cat itself, with each virtual cat falling into one of the following scarcity categories:
- Normal. This is the most common form of cat in the game.
- Fancy. Fancy cats are a rarer type of cat, characterized by special artwork and a fancy cats badge.
- Special Edition. Special edition cats are in second place as the rarest cats in the game. They also feature special artwork and are released in limited quantities.
- Exclusive. Finally, exclusive cats are the highest-scarcity cats in the game. In many cases, exclusive cats will be the only cats of their kind.
As with any other commodity, digital or otherwise, the value of these cats is based on the law of supply and demand. So the scarcity level of the cat and demand for CryptoKitties play a significant role in the price of the token.
Once you own a cat, you can breed them to create new, unique NFTs. You do so with a male cat (Sire) and a female cat (Dame), creating a combination of the two.
How to Play CryptoKitties
To play the game, you’ll need to start by purchasing your first virtual cat, a multistep process that works very much like using a gift card with your Apple or Google Play account.
1. Sign Up for a Cryptocurrency Wallet
To purchase your first cat in the game, you need to have some Ethereum. You can’t put Ethereum in a real-world wallet or on a debit card. Instead, you need a cryptocurrency wallet, which is a device, program, or service that securely stores information about your cryptocurrency transactions.
There are various options out there, but the big difference between them is whether they’re custodial or noncustodial. Custodial wallets have passwords a company stores and manages, while the wallet-holder manages noncustodial wallets.
Custodial wallets make it easy to access your crypto assets if you lose your password because there’s a third-party custodian in charge of the platforms these wallets live on. But custodial wallets are also centralized. There’s no central authority on noncustodial wallets. Users determine their wallet management style and are the only parties with their passwords.
Decide which direction you’d like to go, and choose from one of the many options. For more information, read our article on the best cryptocurrency wallets.
2. Fund Your Wallet
Next, you need to buy Ethereum and add it to your wallet. Some CryptoKitties are very inexpensive at 0.001 ETH, or about $2.60, while others are very expensive, costing about 1,000 ETH, or more than $2.7 million.
Also, every time you make a transaction, you pay gas fees that can range from a few bucks to hundreds, depending on the demand on the blockchain at the time of purchase. In crypto, “gas” is the unit of measurement for the amount of computational power it takes to process the transaction and smart contract. You’re essentially paying the miner for the use of their processor.
Considering that, it’s best to start with around $250 worth of Ethereum to ensure you can cover the cost of lower-cost cats and the gas fees associated with owning them.
3. Sign Up for CryptoKitties
You can find the CryptoKitties marketplace at CryptoKitties.co. Simply sign up for the site and connect your wallet. It’s also a good idea to check the secondhand market for better deals before pulling the trigger, especially for price-sensitive collectors. Some popular secondhand markets include OpenSea, Crypto.com, and Rarible, but OpenSea is best for CryptoKitties.
4. Buy Your First Cat
The game is all about owning, breeding, and earning from the sale or trade of digital cats. To do so, you need to own a cat. Take some time to search through the dedicated marketplace and OpenSea to find a cat you’re interested in owning.
Once you’ve found it, simply click “Buy” to get started. If the cat you’re interested in isn’t listed for sale, you can bid on it to entice the owner to take your offer.
5. Trade, Sell, & Breed
Once you own your first cat, you can trade, sell, and breed. Make wise decisions when doing so, and you stand to earn a hefty chunk of profits.
How to Make Money on CryptoKitties
CryptoKitties are digital assets that can have substantial value. There are a few options for unlocking this value to pad your pockets.
Sell & Trade Cats
One option for making money with the game is to use the assets within the game as a collection. If you can get your hands on the right cats, holding them for a short period and selling them has the potential to generate profits.
For example, look for rare cats, like Exclusive and Special Edition or Founder Cats (one of the original 100 cats the game started with), or cats with “mewtations,” which is the first cat in the collection with a new cattribute like a specific fur color or background color.
It’s also possible to trade cats with other members. In some cases, you can trade your cat for one that has a higher potential to grow in value. For example, someone might need your cat for breeding purposes. Making these trades and holding onto your investment and selling it in the future are other options for making money.
The breeding feature of the game is also a compelling way to make money. If you own a Dame, you can search the marketplace for Sire cats and either buy one or pay a small fee to another user to use their Sire as a breeder.
Once they breed, the new kitty is yours to keep, trade, or sell for a profit. It costs a flat 0.04 ETH fee plus gas to breed your crypto kitties, even if you own both the Sire and the Dame.
Keep in mind that both the Sire and Dame require a cooldown period after the breeding period, during which no more breeding can take place. That period is longer for Dames than it is for Sires. There are also limitations on how much time you have to breed special-edition traits, like purrstige traits, into your kitties.
What kind of cat you get after breeding (and therefore how much it’s worth) depends on the cat type and traits of the Dame and Sire.
- Normal Cats. You can breed normal cats to get either other normal cats or, with the right combination of genetic traits, Fancy Cats.
- Fancy Cats. You only get the limited-edition Fancy Cats when two cats with very specific traits breed, and there’s a limit to how many times you can breed them, which varies based on the Fancy Cat type.
- Special Edition Cats. While you can breed Special Edition Cats to get regular cats, there’s no hope of breeding a Special Edition kitty. You can only buy them.
- Exclusive Cats. You can breed Exclusive Cats to get regular or Fancy Cats but not Special Edition or Exclusive offspring.
You may also get lucky and end up with highly valuable cats, such as:
- Misprint Kitties. Misprint kitties are CryptoKitties that were minted with mistakes in their designs. In some cases, the cat doesn’t look anything like its traits suggest. Once they catch the misprint, future traits will be printed properly, but you could make serious money if you end up with a misprint.
- Mewtations. Mewtations are CryptoKitties that are the first of their kind with a specific new trait. Only the first cat printed with a trait is given a mewtation gem, making them rarer and highly prized among collectors.
If you’re not interested in owning a new kitten and you own a male cat, you’re in luck. You can make money by allowing others to pay a transaction fee to breed their Dames with your Sire, generating passive income in the process.
It’s natural to have questions, and with CryptoKitties being one of the most popular NFT-centric games on the blockchain. These are the answers to some of the most common questions.
What Is the Most Expensive CryptoKitty?
The most expensive cat, sold in 2021, was Founder Cat #40. The cat sold for the Ethereum equivalent of a little over $1.06 million. The cat is orange in color and sits on a green background with similar-colored eyes.
What Happened to CryptoKitties?
In the beginning, this game was one of the hottest on the blockchain, and believe it or not, it still has somewhat of a user base. In 2018, CryptoKitties spun off into Dapper Labs, and since then, several blockchain games have popped up, increasing competition.
At the same time, a separation in the game between rich players and players with average income began to cut into trading profits, resulting in less demand. According to a 2021 research paper published in Frontiers in Physics, the rapid decline from stardom was largely the result of this divide and a reduction in trading profits for the average player.
Are CryptoKitties Free?
No, the price for a cat in the game ranges from a few bucks to more than $1 million.
At the end of the day, the big question is whether or not you should buy CryptoKitties. If you’re looking at it from an investor’s point of view, the answer is probably not.
Sure, there’s a chance the game will rise to stardom in the metaverse yet again. But there’s a larger chance interest in the game will continue fading as increasing competition with more intriguing functionality hits the blockchain.
While the heyday of the CryptoKitty may be in the past, it was fun to watch the rise and eventual fall of the game, and it’s impossible to discount the integral role it played in the development of the metaverse of today.