CryptoKitties and the New Ludic Economy: How Blockchain Introduces Value, Ownership, and Scarcity in Digital Gaming

Abstract

This article analyzes specific characteristics of value created through digital scarcity and blockchain-proven ownership in cryptogames. Our object of study is CryptoKitties, the first instance of a blockchain-based game that has garnered media recognition and financial interest. The objective of this article is to demonstrate the limits of scarcity in value construction for owners of CryptoKitties tokens, manifested as breedable virtual cats. Our work extends the trends set out by earlier cryptocurrency studies from the perspective of cultural studies. For the purpose of this article, we rely on open blockchain analytics such as DappRadar and Etherscan, as well as player-created analytics, backed by a one-year-long participant observation period in the said game for research material. Combining theoretical cryptocurrency and Bitcoin studies, open data analysis, and virtual ethnography enables a grounded discussion on blockchain-based game design and play.

Mapping the NFT revolution: market trends, trade networks, and visual features

“…Research on NFTs is still limited, and focuses mostly on technical aspects, such as copyright regulations 3 ; components, protocols, standards, and desired properties 13 ; new blockchain-based protocols to trace physical goods 14 ; and the implications that NFTs have on the art world 15 , 16 , in particular as they allow to share secondary sale royalties with the artist. Empirical studies aiming at characterizing properties of the market have focused on a limited number of NFT collections, such as, CryptoKitties 17 , 18 , Cryptopunks, and Axie 19 , or on a single NFT market, such as, Decentraland 19 , 20 or SuperRare 21 , 22 . These analyses revealed that the digital abundance of NFTs in digital games has led to a substantial decrease of their value 17 , and that, even if NFT prices are driven by the prices of cryptocurrencies 19 , the NFT market could be prone to speculation 18 , 20 .…”

“…Empirical studies aiming at characterizing properties of the market have focused on a limited number of NFT collections, such as, CryptoKitties 17 , 18 , Cryptopunks, and Axie 19 , or on a single NFT market, such as, Decentraland 19 , 20 or SuperRare 21 , 22 . These analyses revealed that the digital abundance of NFTs in digital games has led to a substantial decrease of their value 17 , and that, even if NFT prices are driven by the prices of cryptocurrencies 19 , the NFT market could be prone to speculation 18 , 20 . Further, it was shown that NFTs valued by experts are more successful 21 , and that, based on 16,000 NFTs sold on the SuperRare market, the structure of the the NFT co-ownership network is highly centralized, and small-world-like 22 , 23 .…”

Trading Application Based on Blockchain Technology

“…Initially the trading applications were developed with idea of exchanging digital assets or services. One of the greatest influence on the development of trading applications based on Blockchain technologies was the collectible game known as CryptoKitties [4,5]. The CryptoKitties is game of collectible and breedable assets represented as virtual cats, developed on the Ethereum platform.…”

Bringing Blockchain Technology in Innovating Industries: A Systematic Review

“…A crypto collectible is a digital piece of non-fungible data that is specific to cryptography. Therefore, the overall tokens in circulation are the same when it comes to a regular cryptocurrency [67]. While CryptoKitties itself is not a digital currency, yet it does offer the same security.…”