The Beginner’s Guide to CryptoPunks
Sotheby’s sold a CryptoPunk for $11.8 million. Read on to learn how you can buy & sell your own CryptoPunks for a profit!
NFTs are growing in popularity. If there’s one platform that can be accredited with this growth, it’s CryptoPunks. The idea and the platform were so revolutionary that they inspired the ERC-721 standard.
For those who are new to NFTs (non-fungible tokens), it may be difficult to understand the value of CryptoPunks. The concept itself may be confusing to those outside the community.
A CryptoPunk is basically a 24×24 pixel image featuring a particular character. There are males and females, apes, zombies, and even alien characters.
This CryptoPunk - of an alien with blue-green skin, and wearing a medical mask - sold for 11.7 million dollars!
How can something that looks like a cartoon profile pic be worth millions?
Let’s find some answers to what exactly CryptoPunks are, why they are valuable, how to get one and what you can do with it!
- What are CryptoPunks
- What are NFTs?
- How do NFTs Work?
- How to Buy a Cryptopunk
- What are Wrapped CryptoPunks?
- What is Dev Punk?
- Can more CryptoPunks be Created?
- How is a CryptoPunk Valued?
Let’s dive right into what CryptoPunks is all about and how you can own a Punk!
What are CryptoPunks?
CryptoPunk were the very first NFTs (non-fungible tokens) to be created.
CryptoPunks were created on the Ethereum network. It started out as a fun project with small pictures of punky-looking personalities. While the creators designed some characters, the rest of the images were generated algorithmically from a set of templates.
CryptoPunks was launched in 2017. Only 10,000 CryptoPunks were created and they were given away for free! All it cost were the pennies you paid in terms of the Ethereum gas fees for the transaction. Just 4 years down the lane, the cheapest CryptoPunk is about $30,000. As mentioned earlier, the highest ever sold is at 11.7 million dollars!
So how did these tiny digital images become ‘artwork’ worth millions?
Did you know that this project led to the popular CryptoArt movement?
Since it's an NFT, no two CryptoPunk images are the same. They're all unique and highly valuable in the NFT marketplace. One of the reasons why they're valuable is the fact that every CryptoPunk has its own characteristics and traits. You can find out about that and the current value of a CryptoPunk of your choice on the official website. The proof of ownership for each unique character is stored on the Ethereum blockchain.
John Watkinson and Matt Hall from Larva Labs are the creators of CryptoPunks. Their inspiration, it seems, came from the Neuromancer and the bioengineered humanoids from the movie Blade Runner, as well as, the London punk scenes and the cyberpunk movement from the 1980s. The novel Neuromancer is one of the best-known works in the cyberpunk genre.
It is worth noting here that the 10,000 CryptoPunks are the only ones that'll ever exist. The developers won't be making more of those. To top it off, they have no control over the circulation of these punks.
So what are NFTs really?
What are NFTs?
A non-fungible token (NFT) is a type of token that, in itself, is unique and lacks interchangeability. To understand that better, let's take an example.
Imagine you need to trade your ETH tokens for other ETH tokens. While it sounds weird, it is very much possible. Since you're exchanging pretty much the same thing, we can say that ETH tokens are fungible.
Now imagine that you're trading a rare Yu-Gi-Oh! card that is one of its kind. You can't find another like that. So when you trade this card with some other card, it isn't the same thing that is being exchanged. Hence, your Yu-Gi-Oh! card is non-fungible.
Some tokens in the world of blockchain work in a similar way. They're unique, every single one of them. And that makes them quite a collector's item.
People from across the world collect NFTs and are often willing to spend big bucks on them.
I know you’re wondering how NFTs work, so let’s talk about it!
How do NFTs work?
NFTs are special and have certain properties you wouldn't normally see in the crypto industry. For a start, each token is Ethereum-based and is given a unique identifier when it is minted. Moreover, each token has one owner and you can easily verify this information.
And that's it. That's what makes NFTs special. It's just the uniqueness of their existence that draws everyone in.
In case you're thinking of buying one, you can find them on Ethereum-based NFT marketplaces.
So what does it mean to own an NFT? Well, you have verifiable ownership of the token. And you can rest assured that your tokens are safe because they can't be manipulated in any way.
If in the future, you decide to sell the NFT, you can do so using the marketplace you bought it from or any other Ethereum-based NFT marketplace. Doing so might earn the original creator some resale royalties.
But what if you're a creator, instead of a buyer of NFTs? Well, just like the buyer can prove the ownership of the NFT, you can prove that you created it.
Moreover, you can decide exactly how scarce the token would be. That is important because when you're online, content flows freely. Too freely, in fact. So it can easily be copied and replicated. It can be shared and distributed without any consequences to the ones doing it.
This is a nightmarish reality for those who are creating any form of art online. They always run the risk of not being paid for their art. When people can get something for free, they wouldn't attach value to it.
NFTs help tackle this issue by letting the creator decide the uniqueness of the token. It also provides royalties to the creators when the tokens are sold (even after the first sale).
While I say that the creator decides the uniqueness of the token, I should also let you know that it only works so much. If I see an image online that is an NFT, I can always right-click + save, or print screen it. So in that way, piracy is a threat that is still quite alive.
But the point is, if you like the artwork enough to try to save it to your system, why not pay for it? This way, you get to respect and support the artist.
To learn more about NFTs, read our detailed article on the topic: The Beginner’s Guide to Non-Fungible Tokens.
How to Get a Punk on CryptoPunks?
This is perhaps the easiest thing to do. To start with, you need to head over to the CryptoPunks website.
Out here, scroll down just a little bit to find the CryptoPunks that are up for sale. Find the text that says “click here to see all [number]”. This should take you to the listing page for all the Punks up for sale.
Alternatively, you can scroll all the way to the bottom of the website to access the search bar. Type in a keyword related to the kind of CryptoPunk you need and you'll be led to the search results.
If you find a CryptoPunk that you like, you can check it out and place a bid on it.
To place the bid, you must first connect your MetaMask Wallet. If you're new to this and don't know how to set up your wallet, fret not, we have covered it in detail in our article - The Beginner’s Guide to Setting Up and Using Metamask Wallet.
Once your wallet is connected, you're free to place a bid. For placing the bid, you need to pay the GAS fee. So, in case you're planning to bid 0 ETH on it and intend to get away with it, I've got news for you.
If your bid is accepted, congratulations, the CryptoPunk yours. If not, you can try your luck with some other one.
FAQs on CryptoPunks
What are Wrapped CryptoPunks?
When you turn your CryptoPunk into an ERC721 token, what you get is a wrapped CryptoPunk. This makes them tradable on Ethereum marketplaces such as Rarible and OpenSea. Each wrapped CryptoPunk is backed 1:1 by an original Cryptopunk by Larvalabs.
What Is Dev Punk?
When CryptoPunks was launched by the company, their blockchain developers claimed the first 1000 punks. The remaining 9000 CryptoPunks were claimed by the general public.
The CryptoPunks held by the developers are known as Dev Punks. The CryptoPunks numbered <1000 are all Dev punks.
Can its Creators make More CryptoPunks?
According to the CryptoPunk creators: “The initial set was created and locked in place when the code that controls ownership was deployed to the Ethereum blockchain. Once we released it onto the blockchain it became permanently embedded there and can no longer be modified by anyone.” We no longer have any control over the creation or ownership of punks.
So the answer is ‘No’.
How is a CryptoPunk Valued?
The value is basically what someone else is willing to pay for it. Just like art - the original painting of Mona Lisa or the Last Supper - the price depends on the demand for it. Digital images or duplicates of these paintings are plenty. But the original is unique and there is only one of it.
A CryptoPunk is an image with a digital signature that proves the ownership. You can take screenshots of the CryptoPunk and paste the image anywhere you want. But the owners of CryptoPunks can view them as tokens in their wallets. These unique collectible characters have their proof of ownership stored on the Ethereum blockchain.
Before you go…
CryptoPunks are one-of-a-kind tokens that can be bought and sold using digital wallets. Each token has unique specifications and no two tokens are alike. They are actually computer-generated 24x24 pixel images.
Thanks to their uniqueness (and proof of ownership), CryptoPunks have become popular digital collectibles worth millions.
CryptoPunks has paved the way for great innovation to come in the field of NFTs. As for what path it would lead us to, that’s something only time will tell.