What Are CryptoPunks?

By Mohammad Musharraf

The digital art space has accepted and used non-fungible tokens (aka NFTs) unlike any other. It is probably the one reason why your grandmother too must have heard about NFTs.

JPEGs selling for millions of dollars didn’t only make the top post on your Twitter and Instagram feeds. They also made major headlines across newspapers.

But where did this digital art NFT revolution start?

CryptoPunks. The rest was history.

What Are CryptoPunks?

‘The CryptoPunks’ is a collection of 10,000 unique digital art characters represented in 24×24 colored pixel images. The collection, on the Ethereum blockchain, comprises of 6,039 male Punks and 3,840 female NFT Punks. Then remaining Punks are zombies (88), apes (24), and aliens (9).

While The CryptoPunks is not the first-ever NFT collection, it is credited with fuelling the NFT revolution and making it significantly mainstream. 

Some popular celebrities such as tennis star Serena Williams, billionaire Mark Cuban, rapper JayZ, and the dawg SnoopDogg own and publicly flaunt their CryptoPunks.

Where did it all start though? Glad you asked!

Who Created Crypto Punks?

The CryptoPunks NFT collection was an experiment by Matt Hall and John Watkinson — developers at the mobile app development company Larva Labs. 

Matt and John’s inspiration for pixelated Punk characters came from four separate places:  the London Punk culture from the 1970s, the sci-fi cyberpunk movement, the sci-fi movie Blade Runner, and the fiction novel Neuromancer.

However, contrary to what one may assume, the 10,000 CryptoPunk digital art pieces were not individually designed. Instead, the developers created a pixelated character generator that algorithmically mixed and matched several different character traits to generate the collection.

The algorithm was designed such that no two CryptoPunk characters were given the exact same set of traits. That means, while there are similarities between multiple CryptoPunk NFTs, there are no two NFTs that look exactly like each other. 

When Did the CryptoPunks NFT Collection Launch?

The CryptoPunk collection went live on June 22, 2017, on the Ethereum network, and 9,000 of the 10,000 NFTs were claimable for free. The only criterion to claim a CryptoPunk was to have an Ethereum wallet to pay the gas for the transactions and hold the NFT.

In 2022, Yuga Labs, popular for its NFT collections Bored Ape Yacht Club, acquired the IP rights of Larva Labs’ two major NFT collections — CryptoPunks and Meebits.

How Many CryptoPunks Are There?

CryptoPunks is a collection of 10,000 pixelated characters, each unique due to the traits they have. Some of the most common traits of Punks include an earring, a cigarette, a mole, or black lipstick.  

In total, there are 87 unique traits and each of these traits has different levels of rarity. For instance, only 44 Punks have a Beanie cap on their head but 961 Punks come with a Cigarette. That means the Beanie trait is far rarer than the Cigarette trait.

So, while the entire collection is valuable and each Punk NFT is unique (except for the 8 Genesis CryptoPunks that are identical), the rarity of a specific punk may differ largely depending on the traits they possess.

 A Punk with multiple highly rare traits will be far more rare and valuable than a Punk with relatively common traits such as a Cigarette. 

The best way to check the rarity of CryptoPunks is to use a rarity finder tool such as Rarity Sniper. It offers a rarity score to each NFT based on the combined rarity of the traits they possess.

Why Are Cryptopunks So Valuable?

To understand why CryptoPunks are valuable, we need to understand that different kinds of NFTs are valuable due to different reasons.

For instance, a gaming NFT may have value for its use case within a game. Or, a limited edition music NFT by a popular artist may have value due to the popularity of the artist. 

CryptoPunks is an art collection and there is no “use case” to it. That means the answer to why CryptoPunks are so valuable is more or less the same as why any real-world art collection or a standalone art piece is valuable — age, scarcity, popularity, community and status.

1. Age

Age isn’t just a number. Age is value.

If you look at art pieces such as Mona Lisa, The Starry Night, or The Last Supper, their value has only increased with time. Today, having only these three paintings would likely make you a billionaire.

The same goes for CryptoPunks. While of course the collection wasn’t created in the 15th century, CryptoPunks is one of the oldest NFT collections. 

It is an antique. And its demand, along with its value, will likely keep rising as more people get into Web3. That brings us to the second point.

2. Scarcity

The fewer the merrier, say the art collectors.

CryptoPunks is a collection of 10,000 NFTs. And there will never be more of them no matter how popular it gets.

That means, irrespective of how many people with whatever amount of money join Web3, only a maximum of 10,000 people will be able to own a CryptoPunk.

So, even if demand is high, the supply is fixed. In that case, values soar.

3. Popularity

Popularity equates to demand. And demand, as we said above, equates to value.

If an art NFT collection is not popular for one or the other reason, it will likely not have a high valuation. However, in the case of CryptoPunks, popularity was never a concern.

It had the first-mover advantage and thus is a highly popular NFT collection, resulting in a very high valuation.

4. Community and Status

CryptoPunks have become a status symbol in the Web3 space. 

Imagine having enough money to buy a CryptoPunk. If you do, you get to hang around in the same community as some of the richest and most popular people in the world. Why would someone not want that?

So, the sense of belonging among some of the most elite people in the world is definitely a reason why CryptoPunks are so valuable.

How To Buy an NFT

There are two primary ways you can get your hands on an NFT such as a CryptoPunk: either through initial drops or on secondary markets.

The initial drop is when a new NFT project or collection launches and you can directly mint an NFT from the project’s platform on the given date and time. That is sadly long gone for CryptoPunks.

However, you can purchase your desired NFT even after the drop from a secondary NFT marketplace such as OpenSea, Rarible, or SuperRare.

In short, secondary NFT marketplaces are platforms to buy and sell NFTs after an NFT is live. NFT owners can go on these platforms and list their NFTs for sale. Interested parties can then bid on these collections or purchase directly, depending on the criteria set by the seller.

These marketplaces are peer-to-peer, meaning the transfer of NFTs and funds takes place directly between the seller and the buyer. There is however a service fee ranging between 1% to 2.5% attached to every transaction.

How To Secure NFTs

Non-fungible tokens are highly valuable assets, especially if you own something from a seminal collection like the CryptoPunks. Their value could be anywhere from a few hundred dollars to hundreds of thousands of dollars. With such value at stake, there’s a need for high security.

While the movement has grown, NFT thefts have become commonplace. So, how can you secure your NFTs?

Well, the best solution is to store NFTs in a hardware wallet such as Ledger Nano S Plus, Ledger Nano X, or better yet, Ledger Stax.

Ledger NFT wallet keeps your private keys and seed phrases offline at all times, cutting your NFTs off from all virtual threats. So, as long as you keep your seed phrase safe, no one other than you can access your assets.

This brings the best form of absolute ownership of NFTs to you combined with the highest level of security.

Knowledge is power