June 30th, 2018

Crypto Collectibles

Just games or do they mean business?

As a teenager you most likely used to collect cards, stamps, stickers or really anything that might be collected. In the adult world the stakes are always higher: one of the fast developing tendencies in fintech is to own “digital masterpieces” or crypto collectibles.

What are Crypto Collectibles (CC) about?

The nature of crypto collectibles is rather easy to explain. They are mostly based on ERC-721 protocol that comes from ERC20 standard for smart contracts. Despite their similarities, both these protocols have different aims. ERC20 is perfect for token distribution and ICOs, while ERC-721 makes each token on the Ethereum platform unique and unrepeatable, gives it its own cryptographic signature.

Note: There is a common opinion that all the collectibles are Ethereum-based, but this rule has some exceptions. The NEO platform is also used to create such tokens: for example, Hash Puppies project is the “doggie” version of CryptoKitties (classically, based on Ethereum platform) on NEO.

What is the principal difference between CC and classic games?

Crypto collectives can be bought within the limits of the blockchain-based game and since the moment of purchase CryptoKitty/CryptoPunk/CryptoCelebrity belongs solely to the buyer, not the company-developer or operator, like it is with any virtual items bought in standard social/mobile/computer games (just remember Sims).

Moreover, these tokens can be withdrawn from the game and then sold or presented on specific marketplaces (like Rare Bits, Open Sea, etc.). Choosing between marketplaces, “sellers” should pay attention to extra fees. For example, Rare Bits doesn’t take any extra fees, while the operations on Open Sea platform pay up 1%, according to TechCrunch.

What is the difference between CC and cryptocurrencies?

Crypto collectives are a special kind of token, they aren’t used  “for transactions” as BTC, ETH or any other digital currency. Coins based on the game platform and being a property of one of its users are, to some extent, centralized. The same cannot be said about classical cryptocurrencies (nevertheless, the position of Ripple is contradictory), which follow an idea of decentralization proposed by Satoshi Nakamoto.

Inasmuch as every unique artwork eventually finds the buyer, crypto collective market is always in demand and, as a result, becomes more stable than cryptocurrencies and with more familiar functions. Nonetheless, the fact that crypto collectives are dependant on the web-page that adds them value and “refers” customers is a major disadvantage.

Besides, the possibility of crypto collectibles being sold beyond the “mother platform” can be interpreted as the movement of centralized assets into decentralized systems, presented by marketplaces.

Kinds of existing Crypto Collectibles?

Just like there are a good deal of objects to collect in the real world, there are plenty in the digital cryptoworld.

A blockchain-based nursery. For those who were mad about growing and taking care of animals as a kid, there are CryptoKitties, HashPuppies, fish from the Fishbank game, CryptoAlpacas and many others entity types. The latter was classified by Bitfalls as a suspicious one, because it doesn’t rely on MetaMask and works on its personal wallet.

(source: CryptoKitties)

Many projects come from China and use CryptoKitties as a prototype, modifying the idea of this game platform in accordance to the MetaMask country ban. For example, Asian market-oriented development studio Animoca studios made the mobile version of CryptoKitties for Chinese fans and later, Chinese tech-giant Baidu created a Leci Gou game based on the premise of CryptoDoggie.

A platform for networking and cooperation. CryptoFighters platform – a platform for passionate gamers, allowing to form teams and fight against other groups with your personal fighter.

(source: CryptoFighters)

A platform for true fans. CryptoCelebrities will capture the hearts of those admiring well known media personalities. Right now the platform uses “we will be back” phrase to return to its users with new celebrities.

What benefits do Crypto Collectibles holders get?

Nothing convinces better than real stories and numbers. The following examples are related to the CryptoKitties platform:

  • CryptoKitty created by the Cryptokitties’ Art Director Guilherme Twardowski got auctioned for $140000 at the Codex Art Auction on 14th May, as reported by Coincentral ;
  • $12 Million raised by CryptoKitties in the round led by Andreessen Horowitz  and Union Square Ventures in March 2018, according to TechCrunch;
  • An astonishing story of the entrepreneur’s earnings (“This man has made more money trading cryptokitties than investing in his IRA”) shared by The Verge.

It is obvious, crypto collectibles are not just about having fun, but also about making money (“big money” would be even more appropriate). Technically speaking, it is a new way to use blockchain and implement cryptocurrencies for the digital lives.