What Are CryptoPunks?
CryptoPunks are crypto art pieces that are based on Ethereum's blockchain, and represent NFT's as their representative. It is estimated that there are 10,000 punks with unique features, all of them small and 8-bit in style. They were one of the first famous NFT projects, and their success encouraged many crypto artists to create their own digital collectibles, as well as the development of the ERC-721 standard for digital collectibles. In 2021, the project became more popular after some cryptopunks were sold for millions of dollars, making them among the most expensive NFTs in the world.
Introduction
At first glance, the small, pixelated faces arranged in tiny squares do not seem particularly exciting. Some of them are smoking pipes. Some have hats. Others are even aliens. When it comes to NFTs, appearances can be misleading.
Having just one of these funny-looking punks would probably enable you to obtain anything from a small apartment to a vast mansion. Currently in demand, these 8-bit-style CryptoPunks are limited to just 10,000 pieces. As they are little punks, they aren't going to fight, stake, or do any other actions other than be the little punks that they are. Additionally, CryptoPunks is one of the very first NFT projects to have ever been created.
Who created CryptoPunks?
As the brainchild of New York-based Larva Labs, CryptoPunks is the endeavour of the duo of Matt Hall and John Watkinson. In 2017, the Crypto Art project began as an experiment to look at the potential value of NFTs and art, ultimately leading to what we know today as crypto art.
They are a type of cryptocurrency, but not the same as Bitcoin or BNB, for example. All of the 10,000 punks are unique non-fungible tokens on the Ethereum blockchain. A total of 3840 women and 6039 men are included in this group. Additionally, there are a few apes, aliens, and zombies that are part of the mix. Each of the 10,000 unique attributes is a mix of different attributes mixed together.
In the beginning, the punks were distributed and available for free of charge. For getting one, you simply had to pay the Ethereum transaction fee associated with the transaction.
The popularity of these artworks, along with NFTs in general, has skyrocketed ever since then. Christie's auction house is actually auctioning off collections that are estimated to run into millions of dollars.
In March 2021, this pale-looking alien punk with a headband currently holds the record for the highest-selling CryptoPunk at 4200 ETH, roughly $7.58 million in cryptocurrency at the time of sale. On the other end of the scale, we have the CryptoPunk #7804, which was sold for the same amount of ETH (roughly $7.57 million in the time of sale). The reason for the difference is due to rising ETH prices.
As far as non-fungible tokens are concerned, these two are the second and third most expensive non-fungible tokens ever sold so far. It is Beeple's EVERYDAYS: THE FIRST 5000 DAYS that currently stands on top of the list, selling for $69,346,250.
How do CryptoPunks work?
A token protocol used for NFTs, ERC-721, was not even in existence at the time of the launch of the project. Larva Labs had to work with what they had at the time: ERC-20. The team was inspired by ERC-721 development to modify the code enough so that non-fungible items would be created, which acted as an inspiration for further development on ERC-721 shortly afterwards.
If we look at the token on Etherscan, we can find out that there are a maximum of 10,000 tokens in circulation. Despite the fact that both tokens are listed as ERC-20, they are not identical.
A CryptoPunk can be authenticated by hashing and comparing the reference image to a specific image hash in the token's contract, then comparing the two hashes. Larva Labs created a composite image containing all 10,000 punks, since the images are too large for them to be stored on the blockchain. A hash of this information is contained in the contract for the CryptoPunks token.
But how do you know which one you have? So, each punk's token contains metadata indicating its position within the composite image. As an example, CryptoPunk #7804 represents the 7804th punk in the large, composite image.
Where can I buy CryptoPunks?
Larva Labs has successfully designed their own CryptoPunks on their website, as well as having created the CryptoPunks' marketplace. You will find that there is a place where users can bid, buy, and sell CryptoPunks there. Installing and connecting your MetaMask will enable you to interact with the marketplace.
CryptoPunks have also been able to make their way onto an Ethereum based NFT market called OpenSea. However, these pixel punks are a little different. The tokens have been wrapped into ERC-721 tokens so they can be traded on the NFT exchanges. ERC-721 CryptoPunks can be easily converted back to their original ERC-20 format if desired. In Wrapped PUNKS, the process of wrapping and unwrapping takes place. This is achieved using a MetaMask wallet, which contains a CryptoPunk.