Thursday, January 25, 2018

People Are Paying Thousands of Dollars for Crypto Celebrities on the Blockchain


Anything can be placed on the blockchain with a little ingenuity – even Hollywood celebrities. Cryptocelebrities is this week's Cryptokitties, a smart contract-based trading game which profits from digital scarcity. Only one copy of each celebrity is released, compelling traders to spend thousands of dollars to snap up 'celebs' like Satoshi Nakamoto and Emma Watson.

Celebrities on the Blockchain Because 2018
On paper, a game like Cryptocelebrities sounds as dumb as last month's big crypto game, Cryptokitties. Like its feline forebear, Cryptocelebrities rewards early adopters who get to snap up the best digital real estate and then sell it on for a profit. Blockchain-based collectors' games such as these create a level of FOMO that can cause assets to change hands for thousands of dollars. At 4pm EST on Tuesday 23rd January, the Cryptocelebrities site was knocked offline temporarily, believed to be due to high demand.

While the Cryptocelebrities project looks like a shameless cash-in, both on the current craze for blockchain games and on the celebs themselves, it does have some interesting features. One of these is for verified celebrities to control the royalties from the trading of their image and earn a share of the profits. It's hard to imagine the likes of Clint Eastwood or Donald Trump using ether to verify their blockchain counterparts, but it's a bold concept. Vitalik Buterin and Satoshi Nakamoto (depicted here as simply a question mark) also feature.

Don't Get Too Attached
People Are Paying Thousands of Dollars for Crypto Celebrities on the BlockchainAnyone contemplating snapping up Hollywood's – or Crypto's – A-listers would do well not to get too attached. Anyone who wants to buy a celeb off its current owner can do so, and there's nothing its owner can do to halt the sale. As the Cryptocelebrities website explains: "When someone else matches the current price, they'll automatically snatch your Smart Contract. You'll lose the card but you will receive up to double the amount you originally invested in ETH."

If you buy a contract for 0.2 ETH, another player can snatch it away from you. Once that happens, you'll automatically receive 0.4 ETH! Most contracts double in price with each transaction until they reach 1 ETH. Price increase: 2x from 0 ETH to 0.05 ETH, 1.2x from 0.05 ETH to 0.5 ETH and 1.15x from 0.5 ETH up.

Like other blockchain games, the smart contracts that control ownership may be decentralized but the images of the celebs reside on a centralized database. Should Robert Pattinson or Woody Allen's agent step in and exert pressure on Cryptocelebrities to remove their image, traders could be left holding an empty card. Right now, Woody Allen is worth 1.05 ETH, but would anyone be willing to pay a higher free if his image wasn't associated with the smart contract?

At present, Vitalik Buterin is the most traded celeb, with a price tag that stands at 20 ETH, followed by Satoshi Nakamoto and Angelina Jolie on 13 ETH apiece. While it's hard to imagine the pair ever sharing a red carpet, in Cryptocelebrities they stand shoulder to shoulder. Such is the popularity of the site that newly added celebs can change hands a dozen times within the first hour, as traders jostle to complete their Metamask transaction ahead of the competition. In the interests of journalism, tried – and failed – to snap up Ellie Goulding and Van Morrison.

Someone paid half an ETH for this.
At the time of publication, user mfs7772 is the Cryptocelebs whale, with 24 high-priced contracts in their custodianship including Nicole Kidman, Vitalik Buterin, and Ke$ha. It's easy to write these primitive games off as ephemeral and frivolous – which they undoubtedly are – but they make for a fascinating study of human psychology, whilst demonstrating the concept of digital scarcity and the greater fool theory in action.

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