Crypto

What are Cryptopunks and why are they so expensive?

What are Cryptopunks and why are they so expensive?

Cryptopunks have definitely made many headlines these past few months. From a Cryptopunks bundle selling for $17 million at a Christie’s auction, to the “covid alien” cryptopunk selling for $11.75 million at a Sotheby’s auction, it is clear that Cryptopunks are highly sought after. So, what is a cryptopunk, and why are people willing to pay so much money for it?

Let’s start with the basics: cryptopunks are NFTs, which is short for “Non Fungible Tokens”. NFTs are different from normal fungible tokens, because they are unique. One Bitcoin is worth the same as any other Bitcoin out there, so there is no point swapping one bitcoin for another. This is because Bitcoins are fungible; every Bitcoin is the same. This is not the case for NFTs. They cannot be swapped interchangeably, and each NFT is unique in its own way. This is why many people refer to NFTs as “digital art”, for example, Jasmine Boykins, who has been able to profit from NFTs very nicely. Yet, even thought she did profit from digital art, it might not turn any profit. Still, NFTs can be much more than simply digital art: they can be tied to music pieces, used to unlock certain real-world assets, and more. 

What are Cryptopunks and why are they so expensive?

Difference between fungible and non-fungible assets via [3D Native]

Cryptopunks is a set of 10,000 algorithmically created NFTs, composed of 6,039 males and 3,840 females. Thanks to computer code, no two Cryptopunks are alike, and some punks have more rare traits compared to others. The Cryptopunks were created in 2017 by Larva Labs studio. When the Cryptopunks collection launched, the NFTs could be minted (or generated) by anyone’s Ethereum wallet for free. They would only need to pay a gas fee in order to mint and claim the Cryptopunks NFT. Although gas fees today would amount to at least hundreds of dollars per NFT, in 2017, the gas fees required to mint NFTs were negligible. The price of $ETH was low, and the network was not as overloaded as it is today. People could claim these Cryptopunks for free until all 10,000 Cryptopunks have been minted. 

Most of the Cryptopunks are human, but there are a few Zombies (88), Apes (24) and Aliens (9) in the collection. There are 87 other additional attributes that make each and every Cryptopunk unique.

What are Cryptopunks and why are they so expensive?

Images of a few of the Cryptopunks that exist via [The Hollywood Reported]

So, why are Cryptopunks considered as valuable? The answer is simple: they are the first NFT collection of their kind ever to be created on the ETH blockchain. The Cryptopunks collection was created before most people even knew what an NFT was. They were ahead of their time. The narrative of Cryptopunks is simple but strong, as its free mint price (minus gas fees) enabled anyone from any background to have a chance to participate in the ownership of a Cryptopunk. The famous Youtuber Chico Crypto even claims that owning a Cryptopunk is like owning a “piece of history”. 

Overall, Cryptopunks are considered valuable because they represent the first NFT collection ever to be created on the ETH blockchain. The images themselves may not be the prettiest, but the fact that there are only 10,000 Cryptopunks means that very few people can own one. This is a classic case of supply versus demand: many people want a Cryptopunk, yet very few are being sold. Although there are 10,000 Cryptopunks in the world, that does not mean that all 10,000 of them are being sold. This makes the current supply of Cryptopunks available even lower, driving the price even higher. Lower supply drives the price higher, as the same amount of hands is chasing fewer items.

Now, with big-name companies like Visa buying a Cryptopunk, it is clear that Cryptopunks seem to be here to stay. The amount of Cryptopunks going for sale is becoming rarer and rarer. At the time of writing this article, there is nobody currently selling his Cryptopunk on Opensea. People who own Cryptopunks have placed a large amount of sentimental value on their Punk and don’t want to sell them. 

Many crypto enthusiasts like the Youtuber The Moon see the value of Cryptopunks increasing steadily. Carl at The Moon sees a Cryptopunk like a Picasso: there are just so few Cryptopunks out there for sale, and they represent something much more than the simple pixelated image. 

Cryptopunks might have only just begun their price race, so it will be interesting to see what the future holds for the collection. Some people remain bullish, however, it could very well be that the collection is overhyped. People may lose interest in NFTs and Cryptopunks, and may want to move their assets into something else or another NFT collection. Only the future will determine what happens to the Cryptopunks collection; however, there’s one thing clear: Cryptopunks are the most valuable NTFs collection sold on Opensea. 

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