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🖼️ Cryptopunks and the beginning of the CryptoArt movement
December 13th, 2021 - December 17th, 2021 5-min read
Good afternoon Upscalers’ followers.Time to bring you the 10th edition of our weekly journal. Entering the double digits 🥂
This week, we’ll talk about Cryptopunks and the beginning of the CryptoArt movement 💡
You’ll also find some insights about:
The state of European funding in December 🇪🇺
Infarm becoming a unicorn 🌱
The marginal dollar problem 📈
European Parliament’s actions against big tech companies 🥊
As always, feel free to like, comment, react and respond. Thanks for reading!
And if you enjoy our content, why not join Upscalers as a member?
💡 Cryptopunks and the beginning of the CryptoArt movement
In last week's edition of the newsletter, I mentioned that a cryptopunk (PUNK #4156) had been sold for more than $10M for the first time ever.
Then I promised I would talk about cryptopunks this week.
So here we go ⬇️
What are cryptopunks? 🔍
To be straight to the point, cryptopunks are rightly regarded as the beginning of the modern CryptoArt movement.
They are a collection of 10,000 24x24, 8-bit-style pixel images of characters.
Each character has its own "personality" and a unique combination of distinctive, randomly generated attributes. So there are no two alike.
Most cryptopunks are humans (6,039 male and 3,840 female), but some are Zombies (88), apes (24) or even weird aliens (9). They are widely inspired by the London punk movement of the 1970s, as a way to show their anti-establishment spirit. They are a "collection of misfits and non-conformists" their creators say.
Their attributes can be: earrings (2459 wear some), hot lipstick (696), 3-D glasses (286), pigtails (94 wear one)... there are 87 attributes overall.
Eight punks have no distinctive attibute at all, and only one has 8 attributes: PUNK #8348 ⬇️
As you can see above, each Punk has its own webpage, detailing its attributes and showing its complete transaction history.
Now you might wonder...
... what is so special about them? 🧐
Each cryptopunk is unique and not interchangeable (it is non-fungible). Plus, the whole CryptoPunk collection is definitive and unalterable.
As a basic principle, anyone and everyone can view a Cryptopunk, save its jpeg and even copy paste it anywhere. But on Punk has a single owner.
Ownership of each Punk is outlined in a contract on the Ethereum blockchain. So it can be reviewed by anyone, anytime, but no one is able to modify it. Ownership history of every piece of art is documented on the blockchain too.
So cryptopunks are NFTs look-alikes. Owning them is pretty much the same as owning a physical piece of art that would be permanently on loan to a public museum.
The reason they are NFTs look-alikes is that cryptopunks pre-date the ERC-721 standard which describes how to build NFTs on the Ethereum blockchain today.
They also pre-date any kind of third-party NFT marketplace. In fact, their creators had to build their own marketplace (that is also embedded in the blockchain) so the Punks could be transacted, back in 2017.
In a sense, they are kind of the father-project to all NFTs as we know them today 💪
Who had this idea? 🚀
Cryptopunks began in 2017 as an experiment from Matt Hall and John Watkinson, founders of New York-based software company Larva Labs.
Matt and John created a software that would generate thousands of different, strange-looking characters, which at first, were supposed to be integrated in a smartphone game or app.
But together, they came up with a rather provocative question: could a few lines of code translate to a feeling of meaningful ownership?
So they minted the cryptopunks on the Ethereum blockchain ⛏️
When originally released, the images of the punks were too large to store on the blockchain, so the creators had to take hashes of the composite image (see below) of all the punks and embed them into the contract. Now they managed to put the entire image and attributes data fully on the chain.
At first, Hall and Watkinson offered the CryptoPunks for free, and kept 1,000 for themselves "just in case it became a thing". It took some time for Cryptopunks to become popular, but after Mashable published a story explaining the concept and why it was so groundbreaking, the 9,000 free punks were gone in 24 hours.
So it actually became... a thing.
There have now been close to 20,000 transactions recorded since Cryptopunks went live. The average sale price of a punk over the last year is 52.77 ETH ($202,111). The largest sale ever recorded was made on December 9th, for $10.26M🤯
Why is this so interesting? 🤔
First, for fans of collectibles, they are a new digital version of trading cards or something similar.
Most importantly, at the time of creation, they were a one of a kind test to the dynamics of scarcity and demand. Their creators managed to create digital assets that are truly scarce, in a world of high replicability, and generate demand for them though they have no particular application.
Cryptopunks don't do anything. They can't be redeemed for anything. What you can do with your cryptopunk is eventually showcase it on your account page, or hang it in your metaversal house in a blockchain based game. But that's pretty much it. They are collectibles 🎨
They are the first application of NFTs as we know them today, and paved a new way for the digital art movement.
Want to buy one? 💰
It is actually pretty easy to get a punk (when you have the money). All you have to do is:
Download Chrome browser plugin called Metamask
Create an Ethereum wallet and by Ether from Coinbase
3. Go to https://www.larvalabs.com/cryptopunks, and start bidding
Just for you to know, creators don't take fees on transactions. You'll only pay Ethereum gas fees.
There are 1,458 cryptopunks for sale at the time of this newsletter. Lowest price currently for sale is $233K.
Go for it 😵💫
Are there any other similar projects out there? 👬
Cryptopunks most reknowned competitors are the Bored Ape Yacht club, a collection of 10,000 unique bored apes NFTs.
But I'll leave it up to you to judge which ones are the best investment opportunity 😁
🌍 All eyes on the EU... and elsewhere
European funding in December 🇪🇺
Infarm becoming a unicorn 🌱
Today, the Berlin-based startup Infarm 🇩🇪 announced it had raised a $200M Series D, which values the company at more than a billion dollars.
Infarm is building a global network of urban vertical farms, growing all kinds of vegetables in a climate friendly way.
Now that's some sort of good development. Let's talk about Foodtech next week 🌽
The marginal dollar problem 📈
I came across a Techcrunch article this week stating that VC was more efficient at killing startups than low customer adoption of team infighting.
That's a strong statement 😱
We all agree that startup founders face a lot of pressure from most investors when raising.
Investors, especially in early stage startups, look at revenue growth rate as a way to validate product market fit and startup's potential to become a large business.
Today, with larger-than-ever amounts of money flowing down the ecosystem, young startups can find themselves with millions of dollars, despite their limited traction.
When raising such disproportionate rounds, startups are forced to hit the gas. They engage in a dead-end race, pouring unjustified amounts of money in inefficient investments to chase better metrics that would satisfy the demands of their investors.
According to Techcrunch, that is the core problem of VC: "it incentivizes companies with good vanity metrics to start scaling bad experiments."
European Parliament taking action against big tech companies 🥊
Last week when reading the Atomico report, I came across this quote from Emmanuel Macron (French president) ⬇️
Well, the least we can say is that the European Parliament took action.
Yesterday, EU lawmakers backed the Digital Markets Act (DMA) which is a strong attempt to limit the power of Big Tech companies.
Basically, the DAM allows the European Commission to restrict so-called "killer acquisitions" - when Big Tech giants acquire smaller potential competitors to kill their innovation.
The DAM also includes a new obligation for Big Tech firms to allow users to uninstall pre-installed apps to switch to rival apps. You will now be able to remove Safari from your iPhone and replace it with Chrome 😉
Now that is only the first step of the adoption process. Negotiations between the Parliament and the EU Council are set to begin in 2022.
With France taking over the presidency of the European Union in January, it is likely that the discussions will go through 🇫🇷.
What do you think about it guys? Will this allow Europe to create its own Tech giants and rival US and Chinese ones?
Thanks again for reading guys
See you next week 👋