If you have been lurking in the world of crypto you must have stumbled upon the new sensation that listens to the name CryptoKitties. If you are too lazy to click on the link just think of digital drawings of cats with slight variations where users can breed, gift or sell them.
Sounds absurd yet these little fuckers have clogged up the ethereum network over the past few days. They have also stirred lots of questions leaving people wondering as for why? Why are people so obsessed with digital drawing of cats? Why one sold for $60.000 while many others float around similar pricing?
There are two very likely explanations for the phenomenon. First reason is Art. You know how people gather up in fancy places to buy paintings for millions? Same reason applies to crypto-kitties. Art has been used throughout the ages as a status jewel. The more exclusivity one gains on a piece of art the higher the respect from the wider social circle. Most of the douchebags buying will try and resonate how a replica wouldn't capture the same essence in an attempt to — yet again — show how much "deeper" their perception towards expression of emotion is. They are rich after all and you are not. They "know", you don't and this is another way to explain why.
The second and most obvious reason is money laundering. Let's say you have some millions on the side but you don't want to do anything with them because of taxes. You hire an "art expert" from an elite artistic jerk circle and you get an arbitrary high valuation for a piece of art. You pay the sum and voila. Your money has been transformed into a tax free entity that can be sold thereafter or used inside a building or business in order to increase valuation. When the business containing that piece of art is sold the painting will ride the price. Pretty smart right?
Now imagine you have millions in crypto and you don't know how to cash them due to tax complications. You create a product like CryptoKitties, form an LLC company and then use your funds to purchase insanely overvalued kittens that you just drew. The revenue will be actualised as FIAT on the other end and the taxes will be minimal.
You will be wondering why not everyone is not doing this gig. Well, they do. 99% of all ICO's are money laundering operations if not downright scams. People buy most of their coins with the crypto profits and then use the proceeds to cash out as FIAT that remains as valuation for salaries and such. Whatever remains circulating as tokens is used to cover up the operation and avoid any legal persecution. As long as there is minimal development the gig is still up.
Crypto Kitties are the reflection of everything that has been going on around us since the dawn of time. The medium has changed but the operation is much the same. Like a friend said once in the comments: Apes gonna ape.
