The digital world wants to be a closer version of reality. It wants us to experience a man-made world; where we get to play gods. So similar to the real world, everything in it is finite. Precious metals like gold and silver to natural resources like water and land, they have the innate quality of being limited, except humans… we keep on coming.
The quality of being scarce adds value to it and with its depletion, the value increases. Whereas, in the digital world, things are infinite. They are strings of a number of codes or numbers that can be copied a number of times. This is why things aren’t of value. It is like living in a world, where everyone is like you. Every trait you have found in everyone, then there wouldn’t be anything special about you.
To make sure things increase in value as they run out, digital scarcity is the thing that works its magic. To understand this, we first need to know what digital abundance is. It’s a viewpoint that the internet knows how easy it is to copy someone’s data. The creation of the internet is what led to problems like piracy and proliferation of data. Someone else’s intellectual property like songs or movies can be stolen so effortlessly.
The ability to control the amount of certain good and how it is exchanged paves way for two major things. Firstly, the value is added when the thing is running out. Secondly, the ownership of every product is identifiable as it is stored on a blockchain.
Blockchain remains an integral part if digital scarcity was to happen. It allows for this artificial scarcity to be staged and deludes the user into thinking that it is running out when simply, it is designed to look that way.
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We saw this concept in the blockchain based collectible cat game called CryptoKitties. The cute cats and the underlying technology is what made it so famous among its users. Built on the Ethereum network – upon its launch which happened somewhere at the end of 2017 – it slowed the platform down and used close to 25 percent of the network’s resources at its peak.
Since you breed cats with a different combination of traits, some being rarer than the other. Each cat is unique in its own way, which introduces the concept of scarcity. The unique features are what makes it a competing ground. People have to breed a combination of rare traits so they sell it off for value later.
The simple analogy for this is to think about the time when Pokémon cards were a thing. People would trade cards in exchange for rare cards. I still remember I gave up almost half of my collection to get Charizard from my sibling.
Well, CryptoKitties does the same. People have sold off their kitties for as high as $100,000!