Nifty Moves: Blockchain news from SXSW

Three Cryptokitties

Is it hype, or is there something in it? The innovation spawned by cryptocurrency and its underlying distributed ledger technology is matched only by the scepticism that surrounds wild claims of future potential, and by the scams which arose in the Wild West of the 2017 bull run and ICO fundraising. The sector is beginning to settle, it seems. A gradual release of enterprise systems utilising the technology, for example IBM’s Food Trust, has conferred some much-needed legitimacy. This year’s South by Southwest (SXSW) featured for the first time an extended blockchain and cryptocurrency track. Although many of the panels took place in the final three days of the festival, outside the bulk of interactive programming, events throughout the week shed light on the latest developments. It’s impossible to cover every aspect of these in a single blog. In this first of several, I want to highlight nifty moves around non-fungible tokens and digital cats.

Blockchain 101

For those new to the party, what is blockchain? Jargon is chucked around with abandon. It’s ‘transparent’, ‘disintermediated’, ‘consensus-driven’, ‘immutable’. What that really means is: everyone can see the entries on the ledger, everyone has a copy, everyone agrees the data is correct (thanks to a neat randomised approval of the transactions by the network participants), and no-one can change what’s recorded in it. It is not a silver bullet which will solve all the world’s problems. Rather, it is a magic spreadsheet in the sky with military-grade tamper-proofing (thanks to Ian Cornwell of Kraken IM, and Joseph Lubin of Consensys, for their contributions to this succinct description).

Cats on the blockchain

What kind of transactions can you record? Movement of cryptocurrency was the starting point, ensuring that transfers from one wallet to another on the ledger were incontrovertible and unique. The rules for a transaction are laid out in the ledger’s code and are known as smart contracts (although they are neither smart, nor actually contracts). Movement of non-monetary digital assets, represented as programmable tokens, is also naturally suited to this process.
Some of the more exciting developments in these are coming from the gaming sector. CryptoKitties allows users to buy, sell and breed cartoon cats. The artwork for a particular cat is licensed to the owner of the digital cat token – this is Dapper Labs’ clever Nifty License. My three kitties are pictured above. Their characteristics are defined by the smart-contract-generated genetic code, recorded on a unique, indivisible token known as an NFT – a ‘Non-Fungible Token’. All the cats are different, you can’t slice them up (that would be cruel), and you own them outright, unlike items in traditional games which stay firmly on the servers of the gaming company.


Ownership is one thing – a nice-to-have feature which can take buying and selling activity outside the game platform – but what else can you do with the tokens? Creators Dapper Labs have taken a step into the unknown through their recent partnership with a very different game, Gods Unchained. Each Cryptokitty token generated a limited-edition card pack in Gods Unchained, and fancy Gods Unchained cats appeared in Cryptokitties. You can read more about this in Fuel Games’ article here. The interoperability of tokens in a collaborative ecosystem may seem like a niche application right now, but it is important because it is something that could not be done before this technology emerged. We don’t know where blockchain will take us, in the same way that in the days of dialup modems we could not conceive of social media, but I’m willing to bet that these little cats will be leading the way.

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