Published on Dec 5, 2017
CryptoKitties – Need I say more? Built on the Ethereum platform, these silly little “crypto kitties” have actually gone for high prices (https://kittysales.herokuapp.com/), but more importantly they have been testing the limits of the Ethereum network. Many people claim this illustrates the weakness of existing decentralized cryptocurrency scalability (particularly Bitcoin & Ethereum) – but I would argue this has been well known. Instead, I say this application illustrates that scaling is actually a relevant discussion. As stupid as it may seem, this is a great reason for the Ethereum network to slow rather than just another blockbuster ICO that goes nowhere. This is easy to market and if it grows large enough, will make it to many news stations because it’s a simple and fun story to report on. It will result in THOUSANDS of copycat applications, some of which might actually result in success. There is already an article on Medium discussing how to make your own app (https://medium.com/loom-network/how-t…).
One of the reasons that it is argued cryptocurrencies are in a bubble is because adoption lags price. With Bitcoin (which I will discuss in future), you could support all transactions for commerce with less than 10% of the existing market cap. Most of the growth in Bitcoin’s has come from changes in future expectations, remittances, and the ‘digital gold’ argument rather than its use as a transaction medium. It is refreshing to see an application (no matter how silly) that seems to be promoting actual adoption, even if it ends up being a fad.
On a side note, I think Ethereum is attractive right now relative to Bitcoin. The whole cryptocurrency market is getting expensive, in my opinion, due to Bitcoin’s incredible run lately. This means the dollar value of all cryptocurrencies might correct soon (not a prediction, just becoming a higher possibility). However, Ethereum is reaching a critical support around 4 million Satoshi which it has bounced off a few times, so should be interesting if it heads lower or if it sustains. I will be taking my chances personally.