Cryptopunks are essentially one of the biggest things that has happened in the world of NFT’s or Non-Fungible Tokens. They have literally set a new standard for NFT’s and Digital Art.
Let’s take a look at the top five most expensive Cryptopunks sold.
- CryptoPunk #3100 – $7.58 Million ~ 4.2K ETH
- CryptoPunk #7804 – $7.5 Million ~ 4.2K ETH
- CryptoPunk #6965 – $1.54 Million ~ 800 ETH
- Crypto Punk #4156 – $1.25 Million ~ 650 ETH
- Crypto Punk #2140 – $1.18 Million ~ 750 ETH
As you can see, just the top 5 most expensive Cryptopunks have been sold for over $1 Million Dollars with Crypto Punk #3100 selling for a whooping $7.58 Million Dollars.
This question is why are these characters, most of which are pixelated versions of 24X24 Punk Characters selling for such a stratospheric amounts. Because to be honest, anyone of us can create these characters in Microsoft Paint itself. Probably, in higher resolutions!.
For that, lets first understand What CryptoPunks really are and What are NFT’s?.
What Are Crypto Punks Exactly?
Crypto Punks are essentially a collection of 24×24, 8 bit style pixel art based on the punk characters with a punk theme. They were launched by Matt Hall and John Watkinson who were founders of New York based software company called Larva Labs.
Crypto Punks initially began as an experiment where Larva Labs created a software that was able to generate thousands of variations of a punk character. Each of which would have a unique personality and a combination of distinctive, randomly generated features.
The actual inspiration for Crypto Punks came from the London Punk Scene. For Hall and Watkinson, they wanted to portray the raucous, anti-establishment spirit of the blockchain community and the Punk movement of London in the 1970’s would perfectly match with this.
From here, exactly 10,000 Punk characters were released, each having a unique look and style. While the characters were also categorized into different categories, so called Attributes as each Punk character had different Attributes.
There were 6039 Male Punks and 3840 Female Punks. 696 of the Female Punks wore lipsticks and 303 had mutton chops. 286 Punks wore 3D glasses and 128 had a rosy cheek. 94 with pigtails and 78 with buck teeth and 44 wore a beanie.
Out of the 10,000 punk characters, 8 Punks had no features at all and they are known or referred to as the Genesis Punks. There were also only 9 Alien Punks and 24 Ape punks out of the batch of 10,000 punks.
The Origin of Crypto Punks and Non-Fungible Tokens
To understand how and why Crypto Punks even existed in the first place, we need to talk a little about NFT’s and what they actually are.
Crypto Punks actually got started as an experiment back in 2017, when John Watkinson and Matt Hall were playing around with a pixelated character generator that they had built.
By June, 10,000 characters were generated, each having their own unique style, features and personality.
They initially launched and shared Crypto Punks to a group of small community of blockchain enthusiasts who at that time only had to pay a few bucks of gas fees in order to own these punks. At that time, only a few of those punks were claimed by the users, 20 – 30 to be exact.
Then a week later, Mashable wrote a article about Crypto Punks being this unique Crypto Art Project on their website.
Within hours, the entire collection of 10,000 punks were sold off and claimed by users.
A user named mr703 claimed 703 punks at the launch and his collection is now worth over tens of millions of dollars.
NON-FUNGIBLE TOKENS or NFT’s
The question still arises, What are NFT’s exactly?.
A Non-Fungible Token or aka, NFT is essentially a digital asset in the form of an original artwork, music, video, digital collectibles, trading cards or anything digital. They are no different from a regular crypto token and infact they are encoded with the same underlying blockchain structures as many other crypto tokens.
The difference is that NFT tokens are Non-Fungible, and hence the word “Non-Fungible-Tokens”.
This means, most of the Crypto Tokens and coins that are traded in the Crypto Markets are Fungible meaning they can be mutually exchanged with each other. But for NFT’s they cannot be exchanged with each other and they cannot be duplicated, replicated thus, this makes NFT’s very unique to each other and valuable.
To explain the concept of “Fungibility”, lets look at Bitcoin. If you and your friend has 1 Bitcoin each and if you give one Bitcoin to your friend and he gives his Bitcoin to you, – “Do you think, you will posses a different Bitcoin?”.
No, right, your friend will have the same Bitcoin as yours and there is literally no change in value or anything. This is because Bitcoin is Fungible and so is all the Fiat Money or currency of the world.
But when it comes to NFT’s, they are Non-Fungible and due to this, no two NFT’s can be identical to each other, nor they can be exchanged with each other.
This property of NFT’s allows digital assets to be unique, rare and it helps them posses value. Any digital asset can be turned into an NFT, and this is done through a process called Minting.
Once a digital asset which could be anything from a painting, artworks, music, photos or even Twitter Tweets, the moment, they are minted as an NFT, they gain the properties of a Non-Fungible Token.
Which means, yes, you can list your artwork or digital asset and sell them on NFT marketplaces like Rarible, Opensea and Nifty Gateway.
Today, due to NFT’s, Art and Digital Art is now protected and it cannot be mass produced, stolen or replicated. As even if a person tries to do that or does that, he will never will able to truly own the art.
This is because the data of the NFT and the Digital Asset is stored on the Blockchain Network. One can easily track who owns the art or digital asset and verify the ownership of the NFT.
Infact, even if the creator of the NFT sells his artwork, the buyer just becomes the 2nd owner of the NFT. This means NFT’s have the ability to track all the owners of the NFT and it’s future and past owner. While, one can also find out who the Original creator of the NFT is.
Why are Crypto Punks so Expensive? | The “Rare Syndrome”
When we talk about why Crypto Punks are selling for such a high price, it all comes down to the nature of NFT’s.
The Non-Fungible Nature or Ability of NFT’s that’s instilled upon those Crypto Punks character. You see what happens is NFT’s are unique and rare and there can only be one kind of a single NFT that can ever exist. This means, there cannot be another NFT of the same type.
Due to this, Crypto Punks suffers from the same kind of phenomenon, which makes each and every Punk character unique and rare. To really understand this, we have to move to Pokemon cards.
If you take a look at the image above, these are some of the rarest Pokemon cards that have ever existed and they sell for atleast over $37,000 dollars USD. While Pikachu cards can go for over $100,000. Why is this?
This is because of the “Rare Syndrome” as once these cards are released, new versions of these cards cannot be released. Today, just a handful of these Pokemon cards can be found on the internet and yes, they are pretty expensive.
NFT’s have this kind of magical rare ability inbuilt within them by birth. The moment, a digital asset or art is converted into an NFT, it gets this rare ability.
Now you may have noticed that sometimes, misprinted Pokemon cards which are essentially Pokemon cards that got released with a mis print or faulty print, they sell for a ton of money. The exact feature is also there with NFT’s.
CryptoPunks characters smoothly sync with this as each Crypto Punk character has it’s own unique style, attributes and features making them extremely unique and rare.
The only question is what type of Punk character do you own?
If you own those Alien Punks, there are only 9 of them! in the market and today you can sell them for over $10 Million dollars. Or Ape Punks, only 24 of them are there and they can also be sold for over a $1 Million dollars.
It’s all comes down to rarity and uniqueness and this is the reason why Crypto Punks are so expensive.
As 10,000 of them are there and owning just one of them can bring you $50,000 to $100,000 worth of pure profit within just a few years.