A Bitcoiner's Guide to CryptoPunks
A Bitcoiner's Guide to CryptoPunks
An explanation for people who are both confused by and curious about NFTs.
A friend and coworker at Blockstream asked me why I (an avid Bitcoin supporter and Ethereum skeptic) would want to own a CryptoPunk or use it as a profile pic.
This is my answer.
Inside this issue:
The Work of Art in the Age of Digital Scarcity
How to make a digital original
What I like about CryptoPunks
All art is real art
The Work of Art in the Age of Digital Scarcity
In his seminal 1935 essay "The Work of Art in the Age of Mechanical Reproduction" German philosopher Walter Benjamin argued that art served two very distinct purposes and as a result was valued in two completely different ways. Benjamin called these two modes of artistic value the "exhibition value" (i.e. the value provided by displaying or consuming a work of art) and the "cult value" (i.e. the value the art provides by simply existing).
In some medieval cathedrals, for example, there are ornate frescoes or elaborate statues mounted in high, receded places that will never be visible to the congregation on the floor below. The value of those artistic works comes entirely from the nature of their existence: they will never be displayed at all. To Benjamin cult value and exhibition value were necessarily in tension: to value a work for exhibition was necessarily to reduce its cult value. Taking a statue down from the cathedral nave and displaying it in a museum would allow more people to appreciate its beauty — but it would also diminish the divinity of the work.
By contrast Benjamin worried that mechanically reproducible art (specifically photography) represented for the first time art whose exhibition value could be entirely isolated from cult value — where a reproduction could be considered effectively interchangeable with the original, or where no meaningful original might be said to exist at all. To Benjamin the cult value of a work of art derived from its unique origin and context — a mechanical reproduction might be indistinguishable to the senses but inherently lacked the authenticity of an original work. A perfect replica could never be a perfect replacement.
Benjamin died in 1940, more than two decades before A. Michael Noll began publishing some of the earliest known computer artworks but one assumes digital art would only have heightened his fears about the diminishing role of authenticity and original works in art. What would the authentic original for a digital work even be? The first disk it was saved to? The first monitor where it was displayed? The keyboard where it was first typed into existence? Digital art is by default untethered from any meaningful connection to its origin. It has only exhibition value.
This isn’t just a theoretical concern. Many digital artists struggled (and still struggle) to build commercial value from their work because the perfect reproducibility of digital art means digital artists risk instantly saturating any market for their work the moment they share it publicly. Without a meaningful way to distinguish the original piece from unauthorized copies digital artists have no way to compete with counterfeiters offering the same experience at a lower cost.
Perfect reproducibility robs digital art of its cult value and so reduces it entirely to exhibition value. Since exhibition of digital works was essentially free the commercial art market mostly tended to treat digital art as worthless. Not because it was less beautiful or meaningful than other forms of art, but because it lacked the commercial and technical apparatus to impose scarcity or assure authenticity.
How to make a digital original
Arguments differ about what constitutes the 'first' NFT1 project, but the first one to achieve any kind of breakout cultural awareness was certainly the CryptoPunks. In some sense the CryptoPunks are a collection of ten thousand procedurally generated 24x24 pixel portraits — but in a more important sense they are a smart contract that records the ownership state of ten thousand entries corresponding to each individual pixel portrait. To 'own' a particular CryptoPunk is to have one’s address recorded by the contract as the owner.
The CryptoPunk ownership entries are in some sense the symmetric opposite of the images they represent: where the pixel portraits offer only display/exhibition value the tokens offer only authenticity/cult value. One useful way to conceptualize NFTs is as an attempt to create an authentic original copy of a digital work. Dismissing NFTs because anyone can right-click-save the images they represent is missing the point. Right-click-saving isn’t a problem with NFTs, it’s the problem NFTs exist to solve.
Reasonable people can disagree about whether NFTs actually solve that the problem of authenticity for digital art. The image is not the token and the token is not the image — different people will ascribe different levels of cult and exhibition value to any work of art, CryptoPunks included. But if you have ever wondered why NFTs can command seemingly irrational prices when anyone can freely access the art they represent, this is why. The price of an NFT doesn’t measure the exhibition value — it measures the value collectors place on the authenticity of the work.
CryptoPunks are the first widely known work of digital art it was ever possible to own. As a result some people find it interesting to own them.
What I like about CryptoPunks
Let me be clear about what this essay is not: this is not an attempt to convince you to like NFTs generally or CryptoPunks specifically. It is entirely and totally reasonable to think the whole thing is silly and to wonder why anyone would care about it. Art is subjective! People are supposed to like different things. It’s fine!
As long time readers already know and as clever new readers have probably already guessed, I own CryptoPunk #6918 — objectively the best CryptoPunk.2 I didn’t buy it as an investment, but as a kind of interesting souvenir of cryptohistory. I wanted one that looked (vaguely) like me — or at least a little like me a decade and a half ago when I was still in grad school and wearing a mohawk. A little while later I ended up getting Azuki #7171 for my wife as a Valentine’s Day gift for the same reasons.
I do enjoy knowing the market places a value on these tokens, but I don’t intend to ever sell them. For me they are mementos of having been present for this moment in time. Claiming them is like carving our initials into the tree of cryptohistory. NFTs are pointless, but pointless in the same way that collecting rare books or climbing Mount Everest or learning to play chess is pointless. They are autotelic.
Whatever your views on the excesses of the NFT markets today, the CryptoPunks are the product of a simpler time. They were given away for free to anyone who wanted one back in 2017 when no one knew yet that NFTs might one day be valuable. There was no presale, no hype-cycle, no lottery mechanics, no reveal. Just a set of digital images that anyone could own, if they wanted. In that way the launch of CryptoPunks was actually very similar to the launch of Bitcoin, where early adopters could claim Bitcoin essentially for free by running mining software on an idle laptop.
People who are distant from Bitcoin tend to associate it with and blame it for all of the ponzis and scams that followed in its wake. People who are distant from NFTs tend to do the same thing with CryptoPunks — blaming them for the ponzis, rugpulls and low-quality art projects that followed their success. It’s the same category error. CryptoPunks are not a scam or a ponzi or a trick. The CryptoPunks are a genuinely interesting project with genuinely awful imitators, much like Bitcoin itself.
Given my open skepticism about Ethereum as a technology many people are surprised that I place any value at all on a token tracked on the Ethereum blockchain. But NFT projects are not anchored to the chain that they originate on! It’s entirely possible to migrate the ownership records for an NFT collection from one chain to another — both collectively as a project and unilaterally as an individual collector. Some CryptoPunk holders have already elected to convert their tokens into Bitcoin ordinals via a process called teleburning.
I do expect to one day migrate my punk from Ethereum to Bitcoin, but I haven’t yet. Partially that is because there isn’t a clear consensus yet about which migration path(s) properly preserve 'authenticity' so it seems premature to commit, and partially because I view my punk as most interesting and valuable when it stays compatible with the broader collection. For now the majority view among CryptoPunk holders remains that Ethereum is the best ledger for CryptoPunk ownership, so for now Ethereum is where CryptoPunk #6918 remains.
All art is real art
Art that challenges our conceptions of what art can be is not new or specific to NFTs, which is why many of the most strenuous objections to NFTs come from people outside the art world. People with more experience in art history are more likely to take NFTs in stride, like New York Magazine art critic Jerry Saltz:
People who hate NFTs usually hate them because they are using them as a visual stand-in for something else they hate even more. But NFTs are just a file format! There is no need to be upset about file formats. Arguing that NFTs aren’t really art because bad NFT projects exist is like arguing that movies aren’t really art because Paul Blart: Mall Cop exists. We can condemn bad art without condemning the entire artistic medium it came from.
More importantly we can acknowledge that art has value without needing to personally value it. I don’t personally want to go to a Taylor Swift concert but that doesn’t mean I feel the need to argue the (insane) market price of tickets to her concerts is wrong or that her fans are suffering from some kind of mass delusion. I genuinely wish the best to Taylor Swift fans! I hope the concerts are worth every penny.
If you aren’t familiar with non-fungible tokens (i.e. NFTs) you should probably start here. If you already know about NFTs and they make you angry, you should probably start here.
If you are curious what other parts of my background and portfolio might inform my biases and perspective you can learn more on my disclosures page.