Musicians, artists, creators and influencers are all making non-fungible tokens to create digital collectibles on the blockchain. The most common media on NFTs today are art and music, but digital collectibles are also becoming quite popular. Celebrities like Snoop Dogg, Odell Beckham Jr, Jay-Z and Marshmello own CryptoPunk NFTs and use them as their Twitter avatars.
Created in 2017, CryptoPunks were among the 1st NFT collectibles minted on Ethereum’s blockchain. These collectibles are pixelated characters, and most are human, but some Cryptopunks are aliens, apes and zombies. Although each CryptoPunk is unique, non-human CryptoPunks sell for much more than normal CryptoPunks due to their scarcity.
What are CryptoPunks?
Cryptopunks are algorithmically generated characters in a 24x24 pixel art frame. Similarly to art and trading cards, these Cryptopunks are collectible and scarce. Unlike traditional collectibles, however, the creators of Cryptopunks can’t mint any new pieces, so the supply will never exceed 10,000 NFTs.
The creators of Cryptopunks, Matt Hall and John Watkinson, can’t mint more Cryptopunks because these collectibles are authenticated by Ethereum’s blockchain. The code written on the blockchain limits the number of NFTs that can be minted, and since the blockchain is decentralized the creators can’t change the code on Ethereum’s network.
The code that makes NFTs possible is the ERC-721 token standard. ERC-721 is a type of token on Ethereum’s blockchain, and ERC-721 tokens are unique because they are non-fungible. Fungible tokens, like Bitcoin and Ethereum, can be traded for one another, as they all hold the same value. ERC-721 tokens are non-fungible, meaning that each token can hold a distinct value, allowing for the tokenization of unique assets like art and digital collectibles.
Yuga Labs
Yuga Labs, the company behind the NFT projects Bored Ape Yacht Club announced on March 11th, 2022 that they would acquire the intellectual property (IP) rights of CryptoPunks and Meebits from Larva Labs. This was a huge deal considering Bored Ape Yacht Club and CryptoPunks are two of the hottest and most respected projects in the NFT space.
How to Buy CryptoPunks NFT
- Buy Ethereum (ETH).
Since non-fungible tokens are still in their infancy, you can't go onto an exchange and purchase them just yet. Instead, you'll need to purchase NFTs with Ether, the native token on Ethereum's blockchain. Some great platforms that offer Ether are Coinbase, eToro and Gemini. Once you own enough Ether to purchase your punk, you'll need to transfer your funds to an Ethereum wallet.
- Buy or download a wallet (optional).
To purchase a CryptoPunk, you’ll need to connect a software wallet to Larva Lab's website. The most commonly used software wallet is Metamask, as its Google Chrome extension makes it easy to interact with websites that transact in cryptocurrency.
If you want to hold your NFTs safely, you should keep them in an Ethereum wallet. The 2 main types of Ethereum wallets are hardware and software wallets. Software wallets, like Coinbase Wallet and Metamask, are computer programs that store your cryptocurrency and NFTs.
Hardware wallets are physical devices that store your cryptocurrency and NFTs offline, and they’re the most secure way to store your digital collectibles. Most hardware wallets can store a variety of cryptocurrencies, so you’ll only need to buy one wallet for all your digital assets. - Buy a piece from the collection.
All 10,000 CryptoPunks have already been minted on Ethereum’s blockchain. This means that if you want to buy a CryptoPunk you’ll need to purchase it from someone who already owns the collectible. To do so, go to Larva Lab's website and view the CryptoPunks listed for sale, and the prices for these collectibles range from around 90 Ether to thousands of Ethereum.
To buy a CryptoPunk, all you need to do is purchase a listing using cryptocurrency in your Ethereum wallet. Some listings you can purchase automatically, but others accept offers and don't have a set purchase price. If the seller accepts your bid, the transaction will be processed through Ethereum’s blockchain and the NFT will be sent to your Ethereum wallet. Most listings use Ethereum as a form of payment, but some use other Ethereum tokens, like stablecoins.
The average price paid for a CryptoPunk recently is around $400,000. Being as scarce and sought-after as they are, Cryptopunks are extremely expensive digital collectibles. If you’re interested in collecting NFTs but aren’t ready to shell out the money for a Cryptopunk, the NBA has made their own collection of NFTs called NBA Top Shots which have been gaining traction among crypto enthusiasts and sports fans alike.
Best Crypto Wallets For NFTs
Here are the best software and hardware wallets to store NFTs. Not all wallets support non-fungible tokens, so be sure the Ethereum wallet you use lets you store your NFTs on it. Some wallets offer varying levels of support, so if you want to view your NFT from inside your wallet, make sure the cryptocurrency wallet you use has this feature.
Best Hardware Wallet: Ledger Nano S
Ledger has been making hardware wallets for cryptocurrency since 2014. The company is well known for its multi currency support, as Ledger supports over 1,000 different cryptocurrencies. Since the wallet supports Ethereum-based tokens, you can store any ERC-721 non-fungible token in the wallet.
The Ledger Nano S comes in at just over $50 on Amazon, making it an affordable choice for most NFT collectors and cryptocurrency collectors. If you want a more premium hardware wallet, Ledger offers the Leger Nano X for $119 on its website.
Best Software Wallet: Coinbase Wallet
Sum of median estimated savings and rewards earned, per user in 2021 across multiple Coinbase programs (excluding sweepstakes). This amount includes fee waivers from Coinbase One (excluding the subscription cost), rewards from Coinbase Card, and staking rewards. ³Crypto rewards is an optional Coinbase offer. Upon purchase of USDC, you will be automatically opted in to rewards. If you’d like to opt out or learn more about rewards, you can click here. The rewards rate is subject to change and can vary by region. Customers will be able to see the latest applicable rates directly within their accounts.
Coinbase has one of the most secure software wallets on the market. The company recently added support for NFTs, and you can view your digital collectibles directly on the Coinbase Wallet app.
Coinbase also lets you interact with decentralized applications (dapps) directly on its wallet’s interface. Dapps are applications built on Ethereum which let you interact with cryptocurrencies and NFTs without needing an account with a marketplace. This feature allows you to trade NFTs, earn interest on cryptocurrencies and exchange crypto tokens all from your wallet.
Most Commonly Used Wallet: MetaMask
While hot wallets like MetaMask are not regarded as the absolute safest place to store your cryptocurrencies, they provide reasonable security and maximize ease of use. MetaMask is likely still preferable to storing your cryptocurrency in an exchange because it gives the user greater control of your portfolio. In centralized exchanges, the company has custody over your cryptos and the funds could be lost to successful cyberattacks. However, successful attacks are increasingly uncommon because most top exchanges employ strong security measures.
Completely offline cold wallets like the Ledger Nano S are the safest place to store cryptocurrencies, but they often aren’t as easy to use as MetaMask.
Interacting with DeFi platforms is MetaMask’s greatest strength. Nearly all DeFi projects on Ethereum (and many on BSC) support MetaMask and make it extremely easy to connect your wallet. The quotes for gas prices that the wallet offers for every transaction make the complex process of interacting with DeFi simple. However, you still need to make sure you are interacting with a trustworthy site because MetaMask can’t do the vetting for you.
Best Cryptocurrency Exchange Platforms
If you don’t already own cryptocurrency, you’ll need to use a cryptocurrency exchange to buy crypto with a bank account. Some popular U.S exchanges are Coinbase, eToro and Gemini. These exchanges offer several different cryptocurrencies, but if you plan on using OpenSea, then you should purchase Ethereum and send it to your Web3 enabled Ethereum wallet.
Sum of median estimated savings and rewards earned, per user in 2021 across multiple Coinbase programs (excluding sweepstakes). This amount includes fee waivers from Coinbase One (excluding the subscription cost), rewards from Coinbase Card, and staking rewards. ³Crypto rewards is an optional Coinbase offer. Upon purchase of USDC, you will be automatically opted in to rewards. If you’d like to opt out or learn more about rewards, you can click here. The rewards rate is subject to change and can vary by region. Customers will be able to see the latest applicable rates directly within their accounts.
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Current Crypto Prices
The non-fungible token craze has taken place in the middle of a cryptocurrency bull market. Since the beginning of the year, many cryptocurrencies have appreciated over 100% in price. Bitcoin, the largest cryptocurrency by market capitalization, became a trillion dollar asset for the 1st time in 2021. To get an idea of how crypto prices have been moving, check out some of the most popular cryptocurrencies and their real-time prices below.
CryptoPunks or Cryptocurrency?
Many investors see cryptocurrency as a more sound investment than digital collectibles. Digital collectibles are fun to collect, but their prices are highly speculative and offer little intrinsic value. However, if demand keeps rising for NFTs, you can expect the prices for these collectibles to rise too. There are only 10,000 Cryptopunks ever made, and each punk is different. This scarceness attracts collectors who think Cryptopunks will continue to be a popular digital collectible.
Frequently Asked Questions
Q. What are crypto collectibles?
Crypto collectibles are digital media that’s authenticated by the blockchain, typically verified on Ethereum’s network. By tokenizing digital media, you’re able to distinguish between an original file and a copy of the original. NFTs create digital scarcity, making it possible to trade digital collectibles that have a finite supply.
Q. Are NFTs a bubble?
Some non-fungible tokens have sold for ridiculous amounts of money –– the highest sold Cryptopunk sold for north of $7.5 million. It’s hard to justify that these prices will continue to rise, and many investors see NFTs as a bubble. One thing is certain, however; non-fungible tokens are here to stay, and the use cases for NFTs are quickly growing.
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