Modern FINANCE: It’s Good To Be A Punk

Modern FINANCE

It’s Good To Be A Punk

By Philip Dudley

There’s an emerging art form known to those in the digital world as non-fungible tokens or NFTs.

The most important aspect of an NFT is that the original can be tokenized on the blockchain as one of one and stored forever. My own experience discovering these not-so-mainstream forms of art was no different than browsing at a flea market and discovering a $5 item you thought was cool, only to discover later that it was grossly undervalued.

(A blockchain is a decentralized digital ledger that records digital transactions known as blocks. The blockchain is public and distributed over peer-topeer networks on the internet.)

In the spring of 2021, the “art” world witnessed one for the record books and nothing short of astonishing. I was aware NFTs were being bought and sold on the Etherium (ETH) blockchain. When I arrived at work on the morning of March 11 to read the headline “Beeple sells NFT for $69 Million at Christie’s” I was shocked. Mike Winkleman (the digital artist known as Beeple) reacted on Twitter “Holy You Know What.”

Enter CryptoPunks. A series of 24x24 pixel art images were generated algorithmically by Larva Labs in 2017. A total of 10,000 individually unique Punks were created as an experiment in digital art and stored on the Etherium blockchain.

Larva Labs gave many away, sold some for minimal amounts and kept an equal amount for themselves. A marketplace was born and no one was expecting the ensuing parabolic rise in value.

When Christie’s hammered the gavel on Beeple’s collage “Everydays: The First 5000 days,” everything changed and CryptoPunk’s popularity and intrinsic value soared the very same day.

Why?

They’re the purist form of an NFT … The Original. It’s that simple. And yes, people do display NFTs and CryptoPunks. They can hang on walls as digital art; some use them as their profile picture on the internet.

For those interested in scarcity value, this is where things get interesting. So, we have 10,000 Punks and no two Punks are the same. But some Punks share similar Punk characteristics, but not all of them. Stay with me here…There are 6,039 males, 3,840 females, 88 Zombies, 24 Apes and 9 Aliens, of which there are only 44 with a Beanie, 48 with a Choker, 54 with a Pilot Helmet, 55 with a Tiara, etc. These attributes are what make each Punk unique.

You get the point.

So, which Punk is currently king? It’s CryptoPunk 3100, one of nine Alien Punks, who has a headband and is owned by address 0x7b8961. Our cute little pixel friend was claimed for free on June 23, 2017, sold for 8 ETH ($2,127) on July 6, 2017, sold again for 4,200 ETH ($7.58 million) on March 11, 2021 and is currently offered for sale by owner for 35,000 ETH ($106.4 million). Thank you, Beeple.

And that’s why it’s good to be a Punk. I only wish I still had my Commander Salamander T-shirt.