The popularity of CryptoKitties is felt sharply on the blockchain, as new users are clogging up the network. The new game has the power of memes, with an added benefit of suddenly popularizing the Ethereum blockchain.
Even Charlie Lee, creator of Litecoin, reacted positively:
I think things like cryptokitties, rare pepes, and spells of genesis cards are really cool use case of the blockchain. B/c these can't be counterfeited and there's demand for them, they have value. This is something not previously possible. Though blockchain scaling is a concern. https://t.co/CHe34HKkzg
However, the Ethereum gas station is telling a different story. On peak days, the decentralized exchange EtherDelta burned around 13% of the gas. At the same time, the gas burned by CryptoKitties has increased by two percentage points in just one day, to more than 15%.
This has caused the game creators to increase fees for the game. Each move in the game- pairing up or birthing kittens- requires gas, and a higher gas price ensures that the transactions are completed. The transaction percentage rose from around 2% at the beginning of December to the current levels.
🔥🔥🔥 DUE TO CONGESTION ON THE NETWORK WE ARE INCREASING THE BIRTHING FEE FROM 0.002 ETH --> 0.015 ETH. WE HOPE THIS WILL ALLOW MORE KITTENS TO BE BORN ON TIME AS THERE HAVE BEEN SIGNIFICANT DELAYS 🔥🔥🔥
But just as digital cats are selling for more than $100,000, or around 300 ETH, there are doubts that the collectibles are unique or unalterable. A Medium blogger noticed that some of the smart contract features are vulnerable to a freeze, while a part of the CryptoKitties game is centralized.
The creators of the game, Axiom Zen, are forbidden from participating, to avoid abusing the algorithm- but the fact remains that some of the features that may command prices of 300 ETH are not really unique and cryptographically assured, but are in fact centralized.
The prices for new kitties, bred every 15 minutes, has stabilized around 9 ETH. The price is an average of the last five auctions.
And while there have been other cases when the ETH network has seen higher volumes, the presence of CryptoKitties may be hampering ICO activity. The Spectiv ICO has seen trouble running its coin distribution smart contract:
Update: The Ethereum Network is highly congested right meow, so it's taking longer than expected to deploy the Spectiv token sale contract.
Rest assured, we will notify everyone once it goes live! We would like to humbly thank CryptoKitties for this exciting experience. 🐈 #ETHpic.twitter.com/H1Pd5BPdEx
It remains to be seen how many ICOs are affected. In the past, even a single ICO could delay ETH transactions for hours. But this time, with a baseline gas guzzler taking up 15% of transactions, ICOs may become even more difficult to process.