What Are CryptoPunks?

What Are CryptoPunks?

The CryptoPunks are the 24×24-pixel, 8-bit-style unique avatar that is a non-fungible token (NFT) image. They are considered a piece of art and a new form of asset tokenization that is highly valuable on the NFT marketplace, sometimes selling for millions of dollars.

There are 10,000 of these images, which are pixelated punky-looking images that depict both male and female characters, as well as those that mimic zombies, apes, and aliens. Each punk is one of a kind and is sold both by individual owners and at prestigious auction houses, such as Christie’s and Sotheby’s, sometimes for very high prices.

The record sale to date occurred in February 2022, when Deepak Thapliyal, CEO of cloud blockchain infrastructure startup Chain, paid nearly $24 million (at the time), or 8,000 ether (ETH), for Punk #5822. In September 2022, CryptoPunks NFT #2924 sold for nearly $4.5 million worth of ETH. With all sales totaled, the Ethereum NFT collection has generated over $2.4 billion worth of trades. Ownership of a CryptoPunk is limited to a single person on the Ethereum network. The developers initially gave away the “punks,” as they are called before they became well-known and valuable.

History of CryptoPunks

Two developers at the New York City mobile software company Larva Labs, which makes apps for iOS and Android devices, released CryptoPunks in 2017. The blockchain developers gave away 9,000 for free at first, while the blockchain kept 1,000. At the time, the only requirement for ownership was to have an Ethereum blockchain. The developers began the project as an experiment with the idea of entertaining people, but quickly it turned into something much bigger and more valuable.

CryptoPunks’ creator, Larva Labs, makes money by selling the NFTs they own. However, Larva Labs declines to disclose how many CryptoPunk NFTs it possesses.

The developers modeled the punks’ offbeat look after the mid-1970s London punk scene, the 1984 science-fiction novel Neuromancer, by William Gibson, the 1982 science fiction movie Blade Runner, directed by Ridley Scott, and the cyberpunk movement inspired by the French electronic music duo Daft Punk.

What Do the Punks Look Like and What Their Determines Value?

The punks are pixelated images of both male and female characters that are created to look like characters from the punk works that inspired them. There are also punks that look like a zombie, an ape, or an alien. There are five types altogether.

The value of a CryptoPunk depends mostly on how uncommon its attributes are. For example, because there are only nine alien punks, they tend to be worth more in the marketplace, than, say, male punks, of which there are 6,039.

Which Celebrities Own CryptoPunks?

Celebrity ownership of CryptoPunks can increase the tokens’ value. Among the well-known people who own CryptoPunks are:

• Jay-Z, an American rapper, songwriter, and producer, bought his first punk in April 2021 for more than $120,000 worth of ETH.
• Rapper and entrepreneur Snoop Dogg owns nine CryptoPunks, including two zombie punks worth $2 million each.
• Tennis champion Serena Williams owns #2950, a gift from her husband, Alexis Ohanian, the co-founder of Reddit.

How Do You Buy a CryptoPunk?

It’s easy to buy a CryptoPunk, if you can afford their prices. Here are the steps:

• Step 1. You first convert your cash into ETH and send it to your digital wallet, so that you have the means to buy one.
• Step 2. You then transfer your ether to your blockchain wallet. One example of a blockchain wallet is MetaMask, which CryptoPunk supports.
• Step 3. Now that you have ETH, buy a CryptoPunk from Coinbase or an owner.
• Step 4. Find a punk you like and put in a bid for it. You can find ones that are for sale on Twitter. Among the Twitter handles to check are: @thecryptopunks, @thecryptopunksntfs, and @cryptoslamios.

Controversy Over Real CryptoPunks

In February 2022, Larva Labs had to walk back a mistake it made. Due to a glitch in the original smart contract for CryptoPunks, Larva Labs had to ditch the first edition and reissue the NFTs in a second edition. The second edition had the punks that became valuable and famous. However, some of the first-edition punks remain in the market and have increased in value. Larva Labs has been sending mixed messages about the first-edition punks, claiming they are not the real CryptoPunks, while also selling them off.

The Bottom Line

A CryptoPunk is a piece of art and a new form of asset tokenization that can sell in the NFT marketplace for millions of dollars. Many celebrities and influencers own one or more of these 24×24-pixel, 8-bit-style unique avatars. There are 10,000 of these images, which are pixelated, punky-looking characters that depict male and female characters, as well those that mimic zombies, apes, and aliens.