How Two Guys Made $100k Trading Digital Cats on Ethereum, Merit of Digital Collectibles

In December 2017, two individuals made more money trading digital cats on the blockchain than most crypto traders have made in all of 2018 trading cryptocurrencies like Bitcoin and Ethereum.

Ivan Bogatyy, former Google AI and deep learning researcher, and his friend Oleg Ostroumov, who has been running one of the biggest crypto hedge funds in Russia, made $107,000 off from CryptoKitties, a digital collectibles platform based on the blockchain, during its peak when the massive demand was enough to clog up the Ethereum network.

Upon the release of CryptoKitties and its viral debut, most of the digital kittens on its Ethereum-based platform were already valued at around 25 to 50 ether - about $25,000.

Acknowledging the rapidly increasing demand towards digital collectibles and CryptoKitties in specific, the two investors purchased as many old kittens on the platform as possible, those that are not replaceable and will forever have sustainable value.

In the end, Ivan donated his share of the profits to the Summer Informatics School of MCCME, a coding bootcamp, demonstrating that the journey of the two investors was done to demonstrate the value of digital collectibles and an innovative way to find value in newly emerging products that permanently exist on the blockchain.

For a start, CryptoKitties showed the possibility of exchanging digital goods on the blockchain seamlessly, in a peer-to-peer manner.

Vitalik Buterin, the co-creator of Vitalik Buterin, praised digital collectibles for their efforts in showcasing the possibility of increasing the adoption of the blockchain beyond the realm of finance.

Upon the recent sale of a $1 million rose on the Ethereum blockchain, prominent hedge fund investor Ari Paul stated that non-fungible digital collectibles will get big very fast.2/ people will ask why these have value, the same way people question the value of all collectibles ranging from beanie babies, to Babe Ruth baseball cards, to rare coins and stamps, to undrinkably old wine.

Investors could dismiss the value of digital collectibles based on the decentralized and virtual nature of those assets.

Similar to old artwork and antiques, digital collectibles exist permanently on the blockchain without the possibility of elimination and alteration, unlike traditional collectibles.