If you are new to NFTs then the first project you will want to become familiar with is the extremely popular CryptoPunks art project.
In this article you will learn about the history and value of the CryptoPunks art project.
(Including some ideas at the end for artists to apply to their own projects.)
Let’s Dive In.
Table of Contents
Introducing CryptoPunks
The CryptoPunks art project is the NFT art project that started a movement. I’m sure you’ve seen them in profile pics on Twitter. They are 8-bit images with different attributes. Usually if someone has it in their profile pic it means they own the NFT. These NFTs are now worth thousands if not millions of dollars and they were initially issued for free. The CryptoPunks art project was the first NFT art project on the Ethereum blockchain. It birthed the modern Crypto Art movement.
Origin Of A New Standard
CryptoPunks was the brain child of Matt Hall and John Watkinson of Larva Labs in 2017. It was an experiment. They had started with phone apps but wanted to do something in the collectible space. They themselves had collected hockey cards and Magic the Gathering Cards as kids. So they started with 8 bit characters that could be used as avatars. They are a form of generative art created algorithmically from code. Each Punk that was created is a 24×24 pixel headshot image and every single one is unique.
Matt Hall and John Watkinson looked at the existing ERC-20 token standard and realized they could change the code for the purpose of creating NFTs for their CryptoPunks. This served as the inspiration for what is now the ERC-721 standard for creating NFTs for art and collectibles. In creating their Punk NFTs they did not store the actual image in the contract due to storage costs. Instead they created a cryptographic hash, that is, a short representation of the composite image of all 10,000 images. That linkage was enough to establish ownership thus eliminating the need to put the actual image in the contract.
The Future Of Digital Art
CryptoPunks were released into the wild in June of 2017. Initially Punks could not even be given away. The founders wrote a blog post about what they did. They posted on Reddit as well. There was no initial interest. It was the middle of the ICO boom and nobody was paying much attention to Ethereum. That lasted about a week. Somehow it was discovered by Mashable. Mashable in their article announced it as the future of digital art. Twenty four hours later all 9000 of the Punks had been claimed. This at a time when MetaMask did not exist. To do anything on Ethereum you basically used the equivalent of terminal commands and you had to calculate Ethereum’s gas (transaction) fees correctly for the transaction to be processed. Thus began a new paradigm: digital ownership of digital art using the blockchain technology.
Value Proposition
In addition to digital ownership rights what makes CryptoPunks so valuable? First, it starts with community. Many people didn’t get it at first. The 8-bit characters were so bad they were good and over time they became popular.
Second is digital scarcity. There were only 10,000 minted. The founders have no interest in expanding the set. Its estimated that 20-30% have been lost due to lost keys. The founders retained 1,000. Of those 1,000 they sold their first zombie CryptoPunk for a $1.
There is scarcity within the set as well. Rarity of an individual Punk is a function of attributes. For example, there are only 8 punks with zero attributes and only 1 punk with the maximum 7 attributes. Some attributes themselves are rare. One of the rarer attributes is a choker, only 48 punks have them. The Alien characteristic is the most valuable characteristics. Aliens have recently sold for over $7.5 million.
Finally, owning a Punk is owning a piece of history. The CryptoPunks art project was the first NFT art project on the Ethereum blockchain.
How To Buy Punks
You can buy, sell, or bid on a Punk on the LarvaLabs CryptoPunks marketplace as long as you have Ethereum wallet like Metamask. You can also buy and sell Punks on the OpenSea marketplace. However, OpenSea only works with ERC-721 tokens so the Punk has to be sent to a wrapped contract first. This means it gets put in escrow in exchange for an ERC-721 token that specifies the Punk. The token can then be used to trade on OpenSea.
Ideas for Artists
Here are some ideas based on CryptoPunks:
- Create pixelated versions of your popular characters
- Create NFTs that from your art that can be used as avatars.
- Scarcity matters so don’t make a set of 100 of the same characters. Instead make 100 different versions of the same character.
- Create a large set. Release a significant portion of the set into the wild for free while keeping some for yourself
It’s not about recreating the success of CryptoPunks. There is no replicating what they did. They were just playing around trying to create something new on Ethereum. You should be looking at NFT art projects like CryptoPunks and see what can potentially work for you and your audience. This blog post is the first in what will be a series of posts looking at interesting NFT art projects.