How Is CryptoKitties Contributing to a Digital Future? (w/ Roham Gharegozlou)


ROHAM GHAREGOZLOU: Dapper Labs
is the world’s first blockchain entertainment company. We’re the creators
of CryptoKitties. This is the world’s
largest blockchain game. And of Cheese Wizards and
other applications like Dapper, which make the blockchain
easier to use for everybody. We created Dapper Labs at
the end of February 2018 and raised our seed round
of financing immediately afterwards from Andreessen
Horowitz and Union Square Ventures. A few months later,
given the progress we were seeing
under the hood, we raised a follow-on
round of financing from Venrock and Google Ventures
to accelerate our progress. We also have a number of
smaller investors on board that are absolutely fantastic. We have two of the world’s
largest talent agencies, CAA and Endeavor, as well
as Digital Currency Group, one of the leading investors
in the crypto space. The best way to think about
the potential of blockchain, is to compare it to the impact
that the internet has had. The internet democratized
the ability for people to create, distribute
and consume information. Blockchain’s going to do
the same thing for value. If you think about it
at its most basic level, in the early days
of the internet, anybody was able to go create
a website, send an email, reach millions or
billions of people. Blockchain will create
that same ability for folks to go create a
token, whether that’s a cryptocurrency or
a non-fungible token like CryptoKitties, and have
communities, corporations or even groups of people around
the world that have never met each other, be
able to exchange value without an intermediary,
without any middleman. The benefits of
blockchain for gaming are really absolutely
fascinating. Already, people are
spending billions of dollars on digital
assets without actually having any ownership of them. In 2017, it was over
$78 billion dollars that was spent on digital
items or downloadable content. Now blockchain adds
three key benefits to games that really
change the game in terms of how people will interact
with future experiences. First, it lets players be able
to own the assets that they pay for and take them into
third party experiences. So for the first
time, folks that are buying, whether they’re
buying Fortnight’s skins, whether they’re buying in-game
achievements or assets that actually advance their
progress in the game, they can choose to sell them
on third party marketplaces if they’re no longer
interested in that experience, they can choose to buy and
trade them with other players in order to reach new
parts of the game. And really, they’re back
in the driver’s seat, rather than being
kind of a vassal to the gaming
companies’ choices. Second, and partially because
of this true ownership, games that rely on
blockchain technology are able to create this
sort of joint venture between themselves and
their players in a way that was never possible before. If you think about it, games
are all social networks. They’re just a way for us to
come together and interact with each other in
a different medium. And the ability
to tokenize parts of the value in that
new medium and share it among different parties, has
unlocked a crazy possibility for the future. Which means that
that possibility is a possibility where gamers
that are part of the game experience can financially
benefit from the work that they do in the economy. They can financially benefit
from making the game better, whether that’s through
bringing new players in. Whether that’s through adding
user-generated content. Whether that’s through
providing services to others that are playing in the game. And third, maybe again,
kind of most important, this possibility of games to
be kind of moddable by default. If you think about some of
the most successful games, they started as mods. As in third parties that
took original engines or original games and spun
them around a different way. Now what if we plan
for that for default? And what if the
tokenization could be an economy for all of
these third party developers that are contributing
back to the game and financially
benefiting from it? And folks are going
to be able to interact with different paradigms
without being as held down by their expectations of
things in the real world. For example, if
you’re going to apply for a mortgage on
the blockchain, you’re going to
question yourself a lot. You’re going to talk to
your financial advisor. You’re going to really
think about that decision. And the government’s sort
of, and the regulatory side of things will have to
change a lot before it even allows that as a possibility. But within games,
people are already locking up their crypto
keys and taking out loans with cats as collateral. People are already using their
achievements in a virtual world to be able to take, to be
able to get real benefits in the physical world. And we think that’s
absolutely magical. So CryptoKitties is the most
successful blockchain game really because of
the community that has been created around it. In a sense, we could
never create the game as it currently exists,
without blockchain. Without blockchain, nobody
would believe the commitment that we’ve made, that
hey, we will not make more than 50,000 Generation 0 cats. That is a, because
of the blockchain, that is a commitment
even we cannot change. And so that gives
these assets value in a way that it really was
impossible for a small company like ours to do previously. Similarly, this concept of
sort of a peer-to-peer economy, if you think about
a Fortnite, if you think about any modern game
day you download on your phone, you can buy things. You can never really sell them. You can go online and try to
sort of through third party marketplaces, hock your
account and things like that. But the possibilities
for fraud are high. The possibilities
for actually getting banned by the game
maker are high, because you’re contravening
their terms of service. Because of blockchain,
when you buy a CryptoKitty, it’s 100% yours, and
we couldn’t stop you from taking it into a
third party experience, even if we wanted to. And that final
concept is the reason that the KittyVerse even exists. Before CryptoKitties
was even a platform that people knew that
they could trust, they started building
on top of it. And the reason is, they
knew we couldn’t stop them. The folks that made
Kitty Hats, one of which actually works here
right now, knew that we couldn’t stop him
from creating this concept and giving it to our customers. And in a way, as a developer
sitting by himself, this was the best
way for him to be able to reach a new community
and be part of something bigger without actually having
to reinvent the wheel himself. So we created CryptoKitties
to make it simple and let people understand
blockchain in a different way. For example, to illustrate this
concept of digital scarcity, this concept of limited
edition digital objects, we created 50,000
Generation 0 cats. And everybody could tell
from the day one of the game, that there can never be
any more than 50,000, because the rules of the
software won’t allow it. And so these Generation 0 cats
throughout the bear market of 2018, actually kept
their value better than Bitcoin did
for this reason. Another example of
how CryptoKitties helps people understand
blockchain better, is if 85% of transactions
within the CryptoKitties network are between players, rather
than between players and us. And this is much more
of a Napster-like game than a Spotify-like game. And it lets people
understand the concept of a peer-to-peer
economy, rather than a centralized economy. The third, and I think
my favorite way, where CryptoKitties starting to show
the potential of blockchain in a way that can be
easily understood, is this idea of extensibility. So because the blockchain
software programs run out there in the open, anybody can
you build on top of them without taking this thing
that we call platform risk. Without taking the risk that
the creators of the software can cut them off. For example, within weeks
of launching CryptoKitties, we had folks building
third party applications like KittyCalc. Now we have things
like KittyRaces. We have KittyHats. We have Kota Wars, which is the
ability for people to actually fight their cats together. And all of these
developers are actually creating an ecosystem, an
economy on top of CryptoKitties in a way that shows the owners
of CryptoKitties, these users, the power of blockchain. The power of open
source services that can live out there,
be accessible by anybody, and eventually be recombined
by developers in new ways, creating more choice
for the consumer. Yeah, the KittyVerse
is essentially this global community of
developers that are building applications for CryptoKitties. Most of them are
hobbyists, they’re hackers, they’re independent
Ethereum developers. But we also have the
academic institutions. We also have people
who are trying to use CryptoKitties to teach
the value of blockchain. But also the path to building
on top of the blockchain. And recently, we’ve also had
professional gaming companies that are reaching out,
wanting to both license the CryptoKitties IP, as well as
develop on top of the platform. And the reason
people are doing this is that the community is a
cohesive community of folks that are willing
to spend in order to invest in their
experiences in their cats. And in a sense,
because blockchain is a fabric of value,
because these cats as tokens already hold value,
it’s relatively straightforward for
third party developers to be able to have their own
business models on top of ours. For example, KittyRaces
charge per race. KiittyHats allowed artists
to design clothing, whether they’re hats or glasses
or a variety of accessories for cats, and sell
them to kitty owners and make a piece of the profit. So in this sense, you kind of,
because blockchain is such a by nature, a
token-driven economy, it makes it a lot easier
for folks who are already part of the network to spend
on complimentary experiences, without affecting, I should
mention, our experience. Nobody can corrupt
your CryptoKitty. No third party developer
can build something that takes something away from you. They can only add to the
experience that we created. The folks that are
playing CryptoKitties are really the
early adopters that were willing to go
through all the steps and look past all of
the under construction signs on the Ethereum
blockchain to actually get to the core experience and
be a part of the community. Most of our players
actually don’t identify as cryptocurrency fans. They identify as
gamers or folks that are interested in the
collectibility aspect of things. And this is across the board. Whether it’s parents that
are playing CryptoKitties with their kids to teach them
the value of true ownership and the different,
the possibilities for a different kind
of digital future. And these are mostly Silicon
Valley parents, who themselves work in large tech companies. Or it’s just hobbyists who
really enjoy the puzzle aspect of finding these cats. And they enjoy the fact
that they can actually monetize and sell the
collectible pieces that they don’t want. Unlike every other
game, where you sort of have to take the things
you don’t want, as well as the things that
you’re working for. It’s a very interesting
concept to them, because they’re playing the
game and they’re enjoying, but they can also get
the financial return or recoup part of their costs
by interacting with this larger economy. As a company, we’re
really focused on two categories of things. I mean, first is
obviously creating experiences that teach people
the benefits of blockchain. And CryptoKitties,
we’ve got a lot of big plans for
CryptoKitties ahead. You might have also seen
Cheese Wizards, which is our next game experience. Now Cheese Wizards is
essentially everything that people thought
CryptoKitties was, in the sense that it’s a
speculative experience, it’s a high risk
experience really designed for the current
crypto community. And it lets people
interact socially in a way that really wasn’t
possible before blockchain. And in a different way, I
should add, than CryptoKitties. So CryptoKitties
and Cheese Wizards are two of the experiences that
we’re working on currently. But the rest of
our team is really trying to solve some of
the fundamental blockers to adoption of
blockchain as a whole. And we’re trying to do that
in a way that’s as open source and serving the
community as possible. One of the products that
we released in this vein recently is called Dapper. And Dapper is sort of the first
step towards making blockchain safe and usable for everybody. Because today, most
blockchains’ applications really expect the user to take
charge of everything related to their own security. They give the private
keys away to the user and they say, well
hey, if you lose this, you’re completely out of luck. We honestly got a lot of
flack from some of our players for not guiding them better
throughout that process. And that’s why we
created Dapper. Dapper as a smart contract
wallet, which means instead of us giving your
private key to you and putting it on your device
or a place that it can get lost, we put it in
a smart contract. And there’s a
variety of rules that determine how you can interact
with your assets, And in a way, that keeps you safe,
but doesn’t give us any control over the things that
you’ve bought and or paid for.

8 thoughts on “How Is CryptoKitties Contributing to a Digital Future? (w/ Roham Gharegozlou)”

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  2. Awesome technology. So far the best 2 use cases that keep popping up and getting me excited is games like CryptoKitties and gambling platforms like FunFair. If you could combine those 2 world benefiting ideas and create a groundbreaking new use case, that would be a real game changer. You could call it SuperFunKittiKoin.

  3. glad to see you're putting the technology to good use now that all of the world's most pressing problems have been solved.

  4. I seriously hope you can capture the imagination and come up with a decent guest. It's incredible. We don't need to see factory made garbage every day. I'd wait for you to find a good guest. That's how it works. You don't need to dominate the whole of it all the time.
    The best come together in a Nexus of Meritocracy. Please, for Heaven's sakes! No more "business" ideas that produce absolutely nothing. All you have to do is let garbage fail. It's one of those nice things built right into honest Capitalism. Capitalism requires a higher ethical standard.
    It's simple American exceptionalism. The reason America can be exceptional, is because the Wisdom of the West was Great, and still is. Apply it, and finally we can all enjoy some success.

  5. So basically I can leverage my Tetris and Ms. Pac-Man high scores on a blockchain for my gender identity reassignment surgery, then pay it all back in Jenkem.

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