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Forget the kitties - cryptocelebrities are the latest blockchain money spinner

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Forget the kitties - cryptocelebrities are the latest blockchain money spinnerForget the kitties - cryptocelebrities are the latest blockchain money spinner
July 12
1:33 PM 2018

Take a look in the financial press and you'll see that while there's the usual doom and gloom surrounding the economy, there are also more opportunities than ever to invest in unconventional ways. The phrase "alternative investments" is one that has become commonplace, and has come to be recognised as anything that tracks a little differently to the broader economy.

Having some alternative investments in your portfolio makes plenty of sense - it is a classic example of what our parents told us about not keeping all our eggs in one basket, and it has encouraged people in general to become far more savvy about investments. It has also led to some truly bizarre investment options.

What sort of alternative investments?

Before we get into the surreal world of cryptocelebrities, it's worth thinking about some of the options that are growing in popularity but are less "out there." Investments like gold and silver are becoming more popular among everyday investors due to their resilience in times of trouble and the ability to trade them simply online. The smartphone age has also brought the world of currency trading to the masses. Online tutorials give guidance on how to trade Forex successfully for beginners, and smartphone apps make it easy to set up an account and even get advice from a virtual stockbroker.

Also, when you buy something collectible that is going to increase in value, that's a classic example of an alternative investment. We've seen investors choose to plough their money into classic cars, fine art and even bottles of vintage wine. Of course, that's fine if you know what you are doing and have the right facilities. Otherwise, the car goes rusty and won't start, the art gets damaged and some fool drinks or drops the wine.

Isn't there an easier way in this online world? Surely there's something you can invest in that can't get broken or stolen and doesn't need to be kept wrapped in cotton wool. The world of cryptocurrency has exactly what you need - just invest in a virtual Kanye West or Angelina Jolie.

Welcome to the world of cryptocelebrities

The idea is a variation on the theme of cryptokitties, cute virtual kittens that you can buy, sell and even breed. All transactions are conducted in Ethereum and a new cryptokitty is "born" every 15 minutes. The game had all the necessary ingredients - it's fun, it has the cute factor and the built-in limitations mean that there is scarcity, which drives up value. It was a resounding success, and one that almost brought the Ethereum network to a standstill last December.

But who wants a virtual kitty when you can have a virtual Ellie Goulding? It's a bizarre question, but one to which the makers of cryptocelebrities are rapidly finding an answer.

The game is reminiscent of those football trading cards that the boys in the playground were so obsessed by in years gone by. When you buy a contract on a cryptocelebrity, it looks very much like one of those cards. But the point is, just like the celebrity, it is unique. There is only one Ellie Goulding, one Kanye West, one Donald Trump.

Unlike the cryptokitties, when you buy a cryptocelebrity, there is no guarantee it is yours for long. Every cryptocelebrity is available to buy if you're willing to pay the price. And it will only increase in value.

Once you've purchased, let's say, Jason Statham, for 0.8 ETH, he will show up with you as the owner. His card will also show his new price of, let's say, 0.98 ETH. Anyone can buy him from you, and you will get most of the profits. If you're desperate to hang on to him, and who can blame you, you can buy him back and the price will now be around 1.2 ETH. And so it goes on.

The cryptocelebrity contract shows a unique image of the celebrity, the current contract owner, the price at which the contract was bought and the new price at which the contract is now available. It also shows how many times the contract has been traded. Currently, the most-traded and highest-value contract is that of Vitalik Buterin, the creator of Ethereum. He's been traded over 30 times and his contract value stands at over 20 ETH (£10,000).

A genuine investment?

It's easy to see that cryptocelebrities offer an opportunity to make some quick money, but this also has the look of a pyramid scheme that will have a limited lifespan. By all means get in there, have a little fun and make a few trades, but for a sustainable investment, it would be wise to look elsewhere.

The cryptocelebrities phenomenon does, however, provide an interesting glimpse at some of the bizarre ways the new world of blockchain can be used. It will be an interesting space to watch, to see just what they come up with next.

© 2018 VCPOST, All rights reserved. Do not reproduce without permission.
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