CryptoKitties the cat’s pyjamas

The soaring value and popularity of virtual cartoon cats shows the potential of blockchain tech, writes

reason why you couldn’t start a site called CryptoHouses to buy and sell houses. Such a site would effectively cut out real estate agents as middlemen, since buyers and sellers can do direct transactions on the blockchain.

We’re very far from that scenario, of course. But CryptoKitties does prove the process works. Well, kind of.

There is one rather important problem with CryptoKitties, and it does pinpoint the major concern with blockchain technology at this time. Unfortunately, CryptoKitties is clogging up the Ethereum blockchain.

By some accounts, CryptoKitties is responsible for 17 per cent of all Ethereum network traffic currently. This is slowing down the network and driving up transaction costs.

While this shows how popular CryptoKitties has become in such a short time, it also highlights the Achilles’ heel of blockchain: an inability to scale. The Ethereum blockchain is capable of about 15 transactions per second, which compares very poorly to other networks. Visa, for example, is capable of thousands of transactions per second.

Looking at the bright side for blockchain developers, the popularity of CryptoKitties makes it a great test case for Ethereum’s network. That will lead to further innovations, to address the scalability issues. Blockchain is, after all, still early in its evolution.

Whether or not the CryptoKitties craze continues into the new year is anybody’s guess. But it’s already proven to be a fun way to showcase what blockchain technology is capable of, aside from fuelling Bitcoin speculation.

Richard MacManus (@ricmac) founded tech blog ReadWriteWeb in 2003 and has since become an internationally recognised commentator on what’s next in technology and what it means for society.