Etheremon is the latest crypto-craze, but be careful before you dive in

UPDATE: Feb. 8, 2018, 10:32 a.m. CET The developers of the game have contacted me to explain how the game has changed since its wobbly beginnings. The ponzi-like gameplay is gone; many new features have been added, including a marketplace, a monster training gym and a battle arena. More details about the gameplay, which is vastly different from what it was when the game launched, can be found here.

It was only a matter of time before someone tried to copy the success of CryptoKitties, a virtual collectibles game that was so popular it hogged the Ethereum network nearly entirely for itself in early December.

The new game is called Etheremon, and it allows you to purchase, with ether (Ethereum's currency), virtual monsters which earn you interest depending on their popularity.

The game in its current state is incredibly basic: You buy pictures of monsters and in the future you may be able to trade or even do battles with them. To play, all you need to do is visit the site with an activated Metamask browser extension that's funded with some ether.

Right now, pretty much the only thing you can do with your Etheremon is keep them, which earns you a small amount ether every time someone else buys that same type of Etheremon, which aren't cheap — prices range from 0.37 ETH ($298) to 1.2 ETH ($966).

This Tweet is currently unavailable. It might be loading or has been removed.

And therein lies the problem: In its current state, this is little more than a Ponzi scheme, in which early adopters earn money from people joining in down the line. Once newcomers stop coming, the entire thing collapses.

This doesn't seem to bother players who are jumping head over heels to get in on the action early. One of the game's smart contracts currently accounts for 2.82 percent of transactions on the Ethereum network and has caused transaction fees to skyrocket.

The game was also quickly called out on Reddit for not being truly decentralized; according to one commenter, the owners of the game can withdraw all of players' funds at any time.

One of the game's developers replied in the thread, claiming they are acting transparently and that the "whole world" would know if they try to steal players' funds. While that may be so, the possibility that this may happen is quite unsettling.

Also, the game's monsters currently look like eggs as the initial imagery was apparently used without permission.

A notice on the game's website states that the game's developers "are in talks with artists regarding used artworks. All images are subjected to change.".

This Tweet is currently unavailable. It might be loading or has been removed.

Disclosure: The author of this text owns, or has recently owned, a number of cryptocurrencies, including BTC and ETH. He also owns one Etheremon.