CryptoKitties Co-Founder Benny Giang: Spend a Week Understanding Why Crypto Matters to You

  • Cyril Gilson
    🤷 Opinions

    How much psychology is involved in the crypto industry? Do ICOs have a future? What’s the next thing?


CryptoKitties Co-Founder Benny Giang: Spend a Week Understanding Why Crypto Matters to You

CryptoKitties’ co-founder Benny Giang philosophizes on the kitty’s latest adventures, Vitalik Buterin, cats and wallets, cryptopsychology and incentivizing Blockchain adoption, and revolutionizing ICOs.

Cryptophychology

Cyril Gilson: How much psychology is involved in the crypto industry? I think there is a lot of talk about finance, trading, these kind of things but people underestimate the role of psychology.

Benny Giang: Well really what got me into it was, when I first started to dive deep into Blockchain, it wasn’t necessarily the technical aspects that drew me in, what drew me in was the philosophical approach on why does this matter, why does this technology matter. Then the psychology of it, the whole game theory, incentivizing behavior and trying to solve the classic problems in computer science that have been so difficult to solve, like the Byzantine Fault Tolerance or the general problems.

These things in combination are so interesting to see. I would encourage to listen to a couple of Vitalik’s talks. Vitalik along with a couple other people are really really smart. He is super deep into economics and he is also deep in philosophy and then he talks about the technical aspects.

One of the things I encourage for new people who have no clue what crypto is, is for you to spend the first or second week to try to understand why it matters to you. Why do you care about it? With anything you do in life if you don’t understand why you care about it, then why are you doing it? Besides money. Why is this technology going to change everything?

That took me about two weeks to really just keep asking myself that question and reading more until I found that answer and I was like okay this is the reason why!  

I encourage you to read Naval Ravikant, the founder of Angellist, he has a lot of tweet storms about crypto. Andreas Antonopoulos, he is amazing. He did a talk, and the whole talk wasn’t about Bitcoin it was about why does this matter. It’s about decision making, collective decision making, where a corporation is a group of people making decisions, or back when kings and monarchies when one or two people or family.

Understanding why is so important and then you can dive in the technical aspect. Then you could go to these conferences and network with people. If you don’t then you are coming in for the wrong reasons I think.

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Kitty goes to the market

Cyril Gilson: How are things going with CryptoKitties lately?

Benny Giang: Well we recently just raised 12.6 mln venture funding. We had investors from Silicon Valley and Union Square from New York City. Chris and Fred have been super helpful in really guiding us, we have a bunch of angels as well.

Right now we are focused a lot on growing CryptoKitties to new markets. We are going to be launching the Android version very soon in China. We have been exploring Japan and Korea. We have been talking to lawyers and figuring out the crypto and the gaming laws that exist in those two areas.

But really for CryptoKitties we want to expand this concept of KittyVerse. KittyVerse is third party developers who are building on top of CryptoKitties. So imagine that you buy a CryptoKitty from CryptoKitties ICO, right from the marketplace, and then you can use the same kitty you bought to raise it. You can play a racing game, you can play a battling game, you can put a hat on your cat. And so these experiences are built by third party developers who are part of our community.  We call this the KittyVerse because they play the game as well, they are incentivized to create content and experiences for the kitties. So that’s Kittyverse!

At the core of CryptoKitties is making it easy for people to come in and buy a kitty. Right now if you come into the marketplace there is over 750,000 kitties, so it’s a little bit difficult for you to select the kitty you want or you don’t know which kitty you want to buy.

Imagine Amazon where instead of curating things they suggest you to buy, they had millions of items just displayed in a list and they are like ‘hey go buy it.’ That’s gonna be a huge problem! We are actively solving it on the CryptoKitties side.

On the other side we formed a team to really look at the full UX experience. So that includes everything up until you are interested in CryptoKitties and then you need to buy crypto, you need to buy Ether, and then you need to download metamask to play the game, and then you go to the marketplace. So the team is looking at every single step and seeing what can we do to make it better, make it smoother. What kind of tools can we create to bridge this gap, so the its seamless?

The ideal experience is you have a credit card and you can buy a kitty. But right now you capped your card and you need to buy crypto, then you need to buy a cat. The US is a huge unwrap for us, and we are working on both of these things.

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Not a joke

CG: I was just thinking that you might consider some other project besides CryptoKitties? Because for many people it’s still a joke, for some at least.

BG: Well the funny thing is that CryptoKitties has always been an experiment. We are part of a larger parent company called Axiom Zen based in Vancouver, Canada. Axiom Zen is a five year old company, venture studio, it’s a startup that builds startups. So previous to CryptoKitties, we were building B2B Saas companies. We worked with fortune 500 companies to build ventures and products together, then we took the revenue from these fortune 500 partnerships and then we built our own startups. We spun out two startup companies, and they are both profitable.

Around last summer we started poking around: let’s explore Blockchain, let’s explore what we can do with smart contracts. So we built CryptoKitties and we decided we are not going to do an ICO, because everything last year was the price of Bitcoin, ICOs and the hacks and scams that were happening. That’s really here in Coindesk and Cointelegraph. We were like it just can’t be like this forever, there needs to be more real products that are building their shipping code and building real products. So we didn’t do an ICO, we launched a product, a Blockchain game.

For us it’s always been about education and mainstream adoption. If we can get your mom and dad to think about and get excited about Blockchain and crypto means our mission has gone right. Frankly a lot of people have struggled to explain Bitcoin, Ether, especially smart contracts to your mom and dad or whoever, they just don’t understand or are uninterested.

We had so many emails sent to us like the boyfriend is in crypto, my girlfriend never understands what I do, I tell her about Bitcoin, but she doesn’t care. Then we get an email like I told her about CryptoKitties and she is all like I wanna buy one, and she went through the floor of buying a kitty, and she was like wow now I own this kitty, and she got interested!

For us that’s perfect, that’s what we want. We want a billion people, a billion consumers to be on the Blockchain. We are not targeting a few 100 people who would download a crypto wallet app or a 1,000 people who want to use a fintech investment app. Not everybody in the world are investors, there are more gamers than investors out here.

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Beyond ICOs

CG: Last year was a year of hype but now comes some sobriety, ICOs are becoming more like VC investing, those people from VC are getting more like ICOs in a way. So do ICOs have a future?

BG:So ICOs to be clear are an amazing funding mechanism that allowed people from areas in the world that don’t have access to VC funding to get to raise money to build their own businesses. I have heard many stories of people in Singapore, Indonesia or some place in China, they are just not in Silicon Valley where they could walk to the office of a VC firm and ask for money.  So ICOs are a revolutionizing funding for business and companies.

That being said there were so little parameters around ICOs that there were a few bad players that took advantage of ICOs and just ran away and took the money and bought expensive cars. It’s the mentality that kind of was set by some of the early crypto people, where they spent a lot of their money on Lamborghinis. There was at New York Blockchain week, Consensus 2018, they had a boat party and the Aston Martin Giveaway. We look at it as a team and we are like sure those things are really cool but for us if you think that perspective ‘I want to be at a boat party, I want to win a Lambo’ it’s just really toxic kind of behavior.

CG: It doesn’t help with adoption...

BG: Exactly it doesn’t help with adoption. Then you ask yourself a great funding ICO mechanism to help business around the world to acquire capital, to build business, now people are just taking the money and running. We see people facing the consequences, like those guys in Miami who ran away with $12 mln and then the FCC came after them and now they are in jail. Those are some examples of like you taking advantage of many many many people who invested in your project and ran away with it. You certainly can’t get away with it.

So from my opinion regulation is good for ICOs. There needs to be more proactive regulation that allow for ICOs to happen, but happen in a way where it’s more safe for the normal person who wants to buy into an ICO.

The second thing is, Vitalik Buterin had this concept of a decentralized autonomous ICO, where the community that bought the tokens of your ICO, that they get to control the percentage that is basically given to the team. They are like this month we wanna give five percent of this money to the field of development and the community controls it. Now that’s just one example of kind of taking the ICOs and raising money but then having responsibility in place where people can’t run just run away very easily.

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The next thing

CG: The next thing is another way of tokenization...what do you think?

BG: There are people still building protocols who want to raise money. There are people who are building dapps on protocols who want to have tokens. For us it’s the CryptoKitties they are non-fungible tokens, they are ERC7-21. People are thinking CryptoKitties is a digital asset, it’s a gaming item, but its a digital asset so a lot of people are exploring this space.

Now there is also this hybrid. I have seen these people basically using a hybrid approach of I have a Van Gogh painting and I want to tokenize it, so then multiple people can buy parts of the Van Gogh like a token, and then we lock up the Van Gogh somewhere where nobody or one person or multiple people have access. This kind of hybrid approach of a physical item being tokenized is something that is challenging. You can say the same for real estate or registering your land.

These are physical things that have existing systems in place that people now want to tokenize, but it’s going to take some time to do that. We picked a digital world where you can create a digital item and then you can tokenize it. Everything is digital because in the future there is going to be a combination of physical and digital, as the Internet and the Blockchain get bigger, they allow for digital assets to exist.

Soon enough it will be like Ready Player One or West World where people can live in two worlds and own things in two worlds. It can be just as real as the physical world.

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Kitty and the wallet

CG: So you are interested in arts?

BG: Right now we are focused in three areas. It’s the crypto area, the gaming area and the arts area. We are going to be in an art exhibit in Germany, I forgot the city, it’s a very big exhibit for contemporary art. In September we will be back in Berlin at the Schlinker Pavilion, and we will be doing an exhibit with a very famous contemporary artist. That is to say that this is not only a crypto project, it’s a gaming project and its an art project. That is just building the dialog just think of this as a digital asset, it’s not just one thing.

CG: Is the coming arts project going to be digital art as well?

BG: It’s still early to tell, I think it will be a combination of physical and hardware. Two weeks ago we were in NY and we had an art auction for the Ethereal Summit. We had a Christie’s auctioneer there and we sold a kitty for $140,000. That all went to charity to help artists to fund art projects. It’s not the first time we had Kitties raise lots of money to help charities.

In the beginning, Nick Johnson from the Ethereum Foundation sold one of his Buck hats for $90,000 and he bought a bunch of cows for farms in Africa. A 10-year old girl Bella raised $15,000 and gave it all to Seattle Children’s Hospital in the US. So people are using these Kitties to really solve big problems and help other people and teach other people. It’s more than just the image, it has something deeper to that.

For us the whole art angle, digital asset is very interesting and you can have a hardware wallet. Right now you think of the hardware wallet it looks like a usb stick, now they work but they don’t look that cool. But imagine a Tamagochi, which is a hardware wallet, and you can put your kitty in it. Imagine all the people playing our game, but the normal consumers- maybe your children, will want to carry it around. Its my kitty I own it and it’s in a Tamagochi device. They would want to carry the ledger around then right?

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User experience

CG: How secure is it?

BG: We haven’t built it yet. It’s just an idea. If someone robs you they steal it. If someone robs your ledger they also steal it too, right? When you bring it to the physical world whether its a software or a hardware wallet you always run that risk. Losing your phone, you lose everything right? People have lost millions of dollars.

That actually brings us to the point that user experience for a crypto is really difficult as I mentioned. This one area specifically about decentralized wallets and key management, people can’t even remember their own passwords. People use the same password all the time, so if you tell someone you shouldn’t use the same password, you shake your head ‘yeah that’s true’ but then you still use the same password. Then you go tell a normal person, hey remember your safeword and your private key, and make sure you don’t forget it or you lose all your money. That’s just too much to ask from a normal person.

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