Non-fungible tokens, aka digital collectibles, are one of the most exciting applications of blockchain that we have seen thus far.
Eventually, digital collectibles and the games they enable will become the first big consumer use case for blockchain.
These digitized cats became so popular in Q1 2018 that they single-handedly slowed the Ethereum blockchain to a crawl because of their high transaction volume. They also raised a $12 million series A from the likes of Andreeson Horowitz, Union Square Ventures, Naval Ravikant, Fred Ehrsam and more.
But what do these seemingly glorified Beanie Babies have to do with the future of blockchain?
CryptoKitties were the first use case for blockchains (beyond digital money) that created value for users and enabled an entire ecoystem to be built.
CryptoKitties work because humans have a unique interest in scarce items. In fact, collectible goods served as precursors to money.
Because of our desire to collect rare goods, trillions of dollars are stored in physical collectibles.
A CryptoKitty is just a collectible, but digitized.
These digitized collectibles on the blockchain have come to be known as non-fungible token (NFT).