A flood of demand in buying and selling digital cats brought the  cryptocurrency Ethereum to a crawl last week after unexpected demand clogged up the network. The cats being sold, called CryptoKitties, ended up making up 25 percent of Ethereum’s demand and earned the host site 4.5 million page views about a week after the digital cats launched.

CryptoKtties can be bought, sold and bred using ether, a form of cryptocurrency, and the system is based on unalterable digital transaction systems known as blockchain. While the game itself was meant to be a cheap form of entertainment and educate people about blockchain, the technology behind cryptocurrencies such as Bitcoin and Ethereum, the internet had a mind of its own.

Since CryptoKitties’ launch, some kitties have sold for $100,000 and CryptoKitties users have exchanged at least $1 million on the site.


Blockchain’s purpose is to facilitate simple, direct transactions between individuals without middlemen like companies getting in the middle, but rapid popularity spikes of products like CryptoKitties is testing the limits of blockchain products and the scalability of specific cryptocurrencies.

On the other hand, fun games based on blockchain open a possibility to introduce a wider audience to the system.

Fox News spoke with Elsa Wilk, Head of Marketing for Axiom Zen, the parent company of CryptoKitties, and Benny Giang, Cryptokitties community manager, to find out more about the rush for Cryptokitties and what this means for the future of cryptocurrencies.

Fox News: So, why kitties?

Benny Giang: Cats are the mother of the internet. Since the dawn of the internet, you have piano cat … there’s memes, there’s gifs everywhere, there’s hours of footage on YouTube of cats. I think cats was a very logical step for us because cats cover the internet, and they are right now taking over the blockchain. And who doesn’t love cats?

Fox News: Why did you choose Ethereum as your sole currency?

Giang: Number one, it’s one of the first working blockchains that is very focused on building an ecosystem where there are actual products on there. We selected Ethereum because we could actually build CryptoKitties because they use smart contracts as a part of the blockchain, in comparison to all the other ones you see, Bitcoin, Litecoin, most of those are just a storage of value and most of the time it’s a transfer of monetary value. So for us, we really wanted to build a product, and using smart contracts was the best way to do it.

Fox News: Since cryptocurrencies don’t have any one leader like a bank, is there anyone to stop one product from slowing down a currency or bringing it to a halt?

Giang: The blockchain cannot come to a halt. It’s an incentive structure, so the miners will just keep on increasing the gas price. We were putting the default gas price at 25 Gwei [similar to filling up a car with gas], and we just had to bump that up to 40 in order to add an incentive for the miners to add (the transactions) on.

Fox News: So what happens is that if it keeps getting more and more crowded, the miners will just keep on bumping up the gas price and it will just make it more inaccessible to every-day people, which is kind of defeating the purpose of CryptoKitties.

Giang: Our really big mission here is to have blockchain and Ethereum and to make it accessible to everyone in the world. Right now, in terms of scaling, if you look at the numbers, I think Visa can process thousands of transactions per second, and Bitcoin is six or seven transactions per second and Ethereum is at 15. So what will happen is the cost will rise so much that only the 1 percenters could breed kitties or sell their kitties and that will just keep on happening if there’s a lot more people coming on.

Fox News: Should there be a gatekeeper to keep cryptocurrencies equitable to a large audience or would that defeat the purpose of these open currencies?

Giang: I absolutely think that that should not happen. That would defeat the whole entire reason for blockchain. The Ethereum Foundation and other community members who are involved, they really need to think of a better solution. Right now, we are in talks with people in the community there who are experts in scaling, but from what we’ve been told, we need a solution as of yesterday because the entire world is coming to get some kitties.”

Fox News: How does this type of virality different from other games we’ve seen go viral, such as Pokemon Go?

Wilk: We think that it’s a good thing the game is decentralized and all the benefits that come from running something on a blockchain. But we obviously don’t store your information or make that available or leak it to the public or have any of the negative connotations of things that we’ve seen through things like file leaks where your information is sold on the dark web.

Fox News: What do you think of the potential for fun, almost trivial products, as a way to teach people about cryptocurrencies?

Wilk: I think that’s why we created this. We wanted to make the blockchain more accessible to the man on the street, and we wanted to do it in a fun way. We’ve had so many people reach out to us and say, “Hey, I taught my kids about the blockchain through using Cryptokitties” or people saying their kids want CryptoKitties for Christmas. If you look at anything else in the crypto space right now, any of the wallets, they’re not easy to use. They’re not intuitive.

Fox News: What are you doing to make sure CryptoKitties is scalable to the point where you won’t have this slowdown forever?

Wilk: There are steps being taken right now by the engineering team to facilitate the kind of exponential growth in the tool that we need to scale this long term. Even though the growth was really fast, I think our engineering team has done an amazing job at keeping things running and scaling the product at the rapid rate we needed. There’s also something being done on the actual Ethereum blockchain right now, and the talks that we’re having with people that are very closely tied to the project will not only allow us to scale the IU but also our ability to put cats on the blockchain.

Fox News: Demand for CryptoKitties slowed down Ethereum so much last week that one company had to delay their planned Initial Coin Offering. What does this say about the way these cryptocurrency economics work?

Wilk: Cryptocurrency economics, it’s still in its infancy really. If you look at the user adoption worldwide, we’re talking about less than 1 percent of the world here. There are a ton of things that still need to be figured out. … Unfortunately, the nature of the beast is such that we’re molding in real time. … The state of the larger cryptocurrency sphere is that there are some growing pains and there are some things that are being figured out.