There are a lot of crazy names out there in the cryptocurrency space, but none may be quite as fun as CryptoPunks. This NFT collection on the Ethereum blockchain is one of the many inspirations that have taken the digital assets world by storm, not to mention the financial industry as a whole.
To better understand just what this collection really is, and the magic behind it, we will break down its moving parts into digestible and easier-to-understand components, providing you with the ultimate knowledge of these unique investment opportunities.
Table of Contents
The Ethereum Blockchain
To first understand what something is, it is ideal to understand where it lives. In the case of CryptoPunks, the location is the Ethereum blockchain. If you are unfamiliar with this network, we’ll help you get your sea legs understanding precisely its functions and goals.
Ethereum, in its simplest of terms, is a decentralized and open-source blockchain. Firstly, being decentralized means that there is no one, single power or authority overseeing the interworking of the system. Instead, the network exists in a peer-to-peer environment.
Blocks of information are added by users, verifying and documenting NFTs in a “chain.” This blockchain technology (see, blocks in a chain, very creative naming) is used as a rather public, distributed ledger of sorts.
Users all have access to this information, allowing them to see who owns what, verify its ownership and existence, and understand the processes happening in the space. This immutable information is not only stored in this highly secure fashion but also allows for transparency in the NFT market.
The Ethereum Wallet
Another concept you will want to have an understanding of before diving headfirst into the Ethereum network is that of the Ethereum wallet. While the organization itself does not have its “own” (remember it is a decentralized space with no central, overseeing authority), there are plenty of wallets that have been created to support its technology.
Having an Ethereum wallet is the way in which users can interact with (i.e. buy, sell, trade) and store NFTs working in the Ethereum space. You will need to have such a wallet in order to use Ethereum.
A Digital Wallet
Just to back up one step further, to be clear, a digital wallet for those new to the industry overall, is a rather handy tool you will need to own before truly becoming involved in the NFT marketplace. A digital wallet is a space in which you store your NFTs, for one.
Additionally, the wallet is a place where you hold your private keys, or in short the codes necessary to access your digital assets. Many think of this concept as a bank account, but you know, sans a bank.
While a digital wallet has no central authority (again working on blockchain technology), it does have the security and backing of its peer-to-peer network. This technology is responsible for holding your digital assets, as well as passcode information.
While it is called a wallet, the device (which can be a hardware, removable one, a piece of software on a desk- or laptop or mobile device, or a simple piece of paper), the object is more of a keychain at times, holding the keys you will require to enter your accounts.
What Is an NFT?
Another important term used in both Ethereum and the world of CryptoPunks is the NFT, or non-fungible token. This is a term used to describe the token (or representing “object”) which digitally holds the value of your item.
The NFT Market
The NFT can represent any digital file, such as .mp3s and .mp4s, to .jpg and .gif files, but can also be real-world tangible items, such as a car or real estate. Because of this versatility, the NFT marketplace is a vast world, full of interesting capabilities allowing users to buy, sell, and trade a plethora of interests all in one space.
For every unique item, an NFT can represent, there are nearly as many collections. Any individual or organization can have an NFT collection. Many artists use the term to discuss, as you would in a physical art world, their vast assortment of pieces.
In the case of CryptoPunks, this is a collection of 10,000 unique pieces. But what do they mean, and what are they used for in the online space? Let’s dive more into the specifics of the artform, now that you have a baseline understanding of its moving parts.
CryptoPunks is a non-fungible token (NFT) collection that exists on the Ethereum blockchain. As we noted, Ethereum is open-sourced, meaning many developers can use the blockchain for many purposes.
The CryptoPunks project was launched in June of 2017 by the Larva Labs studio. Larva Labs itself consisted of just one, the two-person team of Canadian software developers named Matt Hall and John Watkinson. This duo created the 10,000 pieces that make up the CryptoPunks collection.
What Is a CryptoPunk?
As an NFT by definition, no two CryptoPunks are alike. Remember, as non-fungible tokens, these items are unique and have no equal token or asset. There is no exact copy anywhere in the world.
According to its own creators, a Cryptopunk is a 24×24 pixel art image, generated algorithmically.
“Most are punky-looking guys and girls, but there are a few rarer types mixed in: Apes, Zombies, and even the odd Alien,” reads the Larva Lab site. “Every punk has their own profile page that shows their attributes as well as their ownership/for-sale status.”
There Can Be Only One
Additionally, each item can only be owned by one, true owner at any one given time. This owner cannot be altered or changed by an entity or overseeing authority, as it is an immutable block in the blockchain technology housed as Ethereum.
CryptoPunks exists only on Ethereum, meaning users must use that platform to buy, sell, or trade these NFTs. But, what are these “items” exactly?
A Face or a Belief System?
In short, a CryptoPunk is a pixelated face. It is a “headshot” only of a digital person-like image. Borrowing its name from both a play on words and the sci-fi world, where a “cyberpunk” is a sort of belief system or one that follows the concept.
TechTarget defines a cyberpunk as “a sensibility or belief that a few outsiders, armed with their own individuality and technological capability, can fend off the tendencies of traditional institutions to use technology to control society.” Say that three times fast.
Instead, Larva Labs opted to coin the phrase CryptoPunks, and a legend was born.
When it comes to this unique collection of 10,000 faces, it can often be a face boiled down to the ability to have a unique avatar, Twitter image, profile pic, or gamer tag. In a practical sense, these images are used for just that: a face you own and can display as you see fit.
Of the 10,000 images, the complexions change from more traditional, human skin tones, to every color of the rainbow, like neon blue and forest green. The face and hair colors change, the hairstyle, the face shape. Some of them resemble monkeys, while others look like aliens from another planet.
With so many to choose from, there is a wild variety of everything, from mohawks and 3-D glasses, to headbands, beards, and pipes. With no two images ever repeating, nor any two owners of the same piece, there is a huge variety to choose from in the collection.
How To Obtain a CryptoPunk
Ironically, at the start, CryptoPunks were originally released completely free. The platform released all 10,000 of its images and they were scooped up in rapid fashion.
Once claimed, that owner had the right to do as they saw fit with the ownership of said “punk.” And from there, the space went crazy.
Just like the insane change in the value of Ether, the native currency on the Ethereum blockchain, the worth of a punk soon followed. Ether has been known to go from basement bottom pricing of October 2015, where one ETH was worth just over $0.42, to its skyrocketing highs, (November 2021 at $4,891.70), and so too has the value of a single punk fluctuated.
From the give-away price of absolutely nothing to the current highest valued NFT clocking in at a whopping $7.58 million, the two mental giants behind CryptoPunks have, in the simplest of terms, created something from nothing.
If you seek to buy CryptoPunks NFT today, you are looking at the very lowest cost registering just over $220,000 (US dollars). It is not a low-cost venture, to be sure. And of the original 10,000, as of publication, only 1,285 punks are even up for sale. This number does fluctuate daily, but many have decided to take their punks and go home, or in other words, hold onto their high-valued digitized face for the long haul.
The Larva Labs website will give you an overview of those currently available at any given time for sale, as well as where current bids fall: https://www.larvalabs.com/cryptopunks/forsale. However, to make a purchase, your best bet is to head over to exchanges, such as OpenSea.io for purchases.
Current Status Updates
Also available on the labs’ site is the current status of all 10,000 pieces, with a color-coded system for ease of understanding. Punks with a blue background are not for sale and have no current bids. Punks with a red background are available for sale by their owner directly. Finally, punks with a purple background have an active bid on them.
Additionally, CryptoPunks operates a Discord channel, to keep users in the loop, not to mention an open ability to communicate user to user. This also includes a bot, which announces all bids, sales, and offers in real-time.
The bids for punks are done in terms of ETH, so you will need that aforementioned digital wallet, fully funded of course with Ether, to make your purchase. There are many wallets compatible with the Ethereum tech, with names like MetaMask, Ledger, Trezor, Binance, Kraken, CoinBase, ZenGo, and Gemini just to name a few top performers.
One for the History Books
The legend of the CryptoPunks is a story that will likely be told for years to come. It inspired not only a concept of digital art being made valuable but showed that you can get people to invest in just about anything if they believe in it.
This same inspiration spurred the NFT market into more mainstream awareness, with something once given away for free, flourishing into a $1.99 billion astonishing marketplace. While no one knows its future, the history of the CryptoPunks is surely not going anywhere anytime soon.