In June of 2021, a cryptopunk NFT (non-fungible token) called “Covid Alien” sold for an astounding $11.7 million. This NFT was part of a rare collection of only nine cryptopunks dubbed “alien punks,” and is the only one depicted as wearing a mask.
In May of the same year, three cryptopunks were sold as a single NFT for nearly $17 million.
What Exactly Are CryptoPunks?
A CryptoPunk is a piece of digital art from the CryptoPunks collection. CryptoPunks — known as Punks — look like pixelated portraits of random characters that are inspired by the London punk rock scene.
As a collection, there are 10,000 Punks in total. Each cryptopunk has its own personality and unique combination of features. Some features are rarer than others. In general, the more rare the combination of features, the higher price a CryptoPunk is likely to fetch. There are 3,840 female punks and 6,039 male punks.
Recommended: If you’re interested in CryptoPunks, check out the Gundam-style robot inspired MekaVerse NFTs.
How CryptoPunks Are Generated
Each Punk is the result of a software program that creates a random strange-looking character. The program results in 24×24 pixel images that are mostly punky-looking guys and girls. There are also a few odd images mixed in, like apes, zombies, and aliens.
How Did CryptoPunks Start?
The CryptoPunks project was launched on June 23, 2017 by Larva Labs . Earlier that year, two developers named John Watkinson and Matt Hall were experimenting with a program they had created to generate pixelated characters. While Matt and John deliberately inserted some of the visual characteristics that their Punks possess, much of the creativity came from the programmatic generator.
When they first launched the project, it was received by a small community of crypto enthusiasts who paid just a few pennies for their Punks. This was a brand-new idea at the time, launched even earlier than the famous CryptoKitties game.
CryptoKitties was responsible for creating the ERC-721 token standard that made NFTs possible. However, CryptoPunks are unique in that they are not technically ERC-721 tokens, which they pre-date. Instead, Punks exist as custom smart contracts.
An Art Experiment
NFTs are a new experiment in digital art. For the first time, it’s possible for creators to issue unique tokens representing their work.
The only thing ensuring this ownership is the fact that each token has a unique identifier and its owner can be tracked and proven on the blockchain. There’s nothing stopping someone from taking a screenshot of an NFT and issuing it as a new token, and as of now, it’s not illegal to do so.
The concept for the CryptoPunks look came from the punk rock scene in London. The creators of the project thought this to be an appropriate visual touch, as the early days of Bitcoin and blockchain shared some of that anti-establishment spirit. The idea was to create virtual characters that would be “a collection of misfits and non-conformists,” according to the creators.
The look and feel of the movie Blade Runner and the novel Neuromancer also served as inspiration for the creation of CryptoPunks.
Digital Ownership and NFTs
NFTs are unique (not fungible) and cannot be replicated. Therefore, the wallet address that each token belongs to can be identified on the public blockchain. The person who owns the crypto wallet that an NFT resides in can claim that they have exclusive ownership of the token.
This provides for many possibilities in terms of digital ownership. Art, music, virtual property, and more can all be tokenized and given a unique identifier.
Recommended: What Is Blockchain and How Does It Work?
NFTs and Risk
This development has not been without controversy, however. Because NFTs are not copyrighted, in theory anyone can take a screenshot of a piece of digital art that exists as an NFT and re-sell it as something original. The copy would have a different name and number on the blockchain but would otherwise be the same.
Additionally, because NFTs are relatively new, there’s no precedent set for the long-term value of these digital tokens. There is a high risk of loss when it comes to using NFTs as an investment.
Value of CryptoPunks
Like any work of art, the value of CryptoPunks NFTs is totally subjective. It’s simply a matter of what someone is willing to pay for it. While some claim this has led to an irrational speculative frenzy, others assert that the market is more honest than some traditional financial markets.
The most expensive CyptoPunks sale to date is the group of three Punks that sold as a single NFT for just under $17 million.
In general, Punks with rarer features sell for more. Beanie hats are the rarest attribute — if you don’t count the one and only Punk that wears a mask. Earrings are the most common attribute, making the Punks that wear earrings among the cheapest.
There’s not an exact 1:1 relationship between rarity and price, though. Prices can fluctuate randomly depending on what’s popular in the market at any given time.
The most rare of the CryptoPunks is the one referred to as “Covid Alien” that wears a mask. No other Punk is depicted as wearing a mask.
CryptoPunks NFTs were created to represent the ethos of the early days of Bitcoin and crypto. These unique pixelated characters have captured the attention of investors who hold a lot of ETH tokens and are willing to pay ridiculously high prices for them. While Punks were technically some of the first NFTs created back in early 2017, they’re not the only ones, nor will they be the last.
Interested in cryptocurrency? With SoFi Invest®, you can trade cryptocurrency from more than two dozen coins including Bitcoin, Chainlink, Ethereum, Dogecoin, Solana, Litecoin, Cardano, and Enjin Coin.
How much are CryptoPunks worth?
The total value of all sales of CryptoPunks as of mid-January 2022 is $1.9 billion. Dozens of Punks have sold for more than a million dollars each.
How can you get a CryptoPunks NFT?
If you already know how to buy and sell NFTs, you might assume the process is the same for CryptoPunks. But because these images pre-date the invention of modern NFTs, they can’t be bought on regular NFT marketplaces.
To buy a CryptoPunks NFT, you will first need the MetaMask wallet and some ETH. MetaMask works as a browser extension. ETH can be bought on many crypto exchanges like Coinbase or Kraken. After funding your wallet, you can buy punks on the Larva Labs website.
However, the lowest priced CryptoPunks NFT is currently going for just under $200,000, so be prepared to spend a small fortune.
What is making CryptoPunks so expensive?
NFT markets, like art markets, are subjective. The more people are willing to pay for something, the higher prices will get bid up. As CryptoPunks have grown in popularity, they have attracted the interest of buyers with deeper pockets.
Photo credit: iStock/Marcos Homem
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC Registered Investment Advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).
2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.
3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.
For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal. Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or pre-qualification for any loan product offered by SoFi Lending Corp and/or its affiliates.
Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments. Limitations apply to trading certain crypto assets and may not be available to residents of all states.
Third-Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.