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Crypto Punk creator dumps NFTs days before verbally shitting on them
Crypto Punks are some of the oldest NFTs (although not actually the oldest NFTs, despite such claims being commonly repeated even by generally respected institutions such as Christie’s). With their age has come fame and high prices, with one especially famous Punk (#7121) having traded just 2 hours before the time of writing for over $3 million. However (cue Neil deGrasse Tyson voice) before there were Crypto Punks, there were Crypto Punks.
Back of the beginning of time in 2017, a small 2-man company named Larva Labs decided to experiment with creating NFTs. They published a smart contract that created “Crypto Punks”, except it turned out that the smart contract had a serious bug. As a result, these punks were relabeled as “V1 Crypto Punks” and largely forgotten about after a new smart contract was released with a totally separate series of NFTs that were branded “Crypto Punks” shortly thereafter. Fast forward until 2022, where Crypto Punks trade for 6-7 figures and are even known to many people who have no idea what the difference is between Bitcoin and Ethereum. In contrast, V1 Punks are still entirely under the mainstream radar, yet have begun to accumulate a community. Some of these V1 Punks have been wrapped into bug-circumventing “wrapped V1 Crypto Punks” which can be safely traded.
Given their interesting backstory and even older age than Crypto Punks proper, you might be inclined to think that their tiny prices compared with their mainstream brethren make them attractive investments. Some NFT enthusiasts certainly did and began trading them first on the fledgling Looksrare.org and now even the juggernaut Opensea.io. It is here where the founders of Larva Labs reenter the picture. After the V1 Punks had begun to increase in popularity and trading volume, one of the founders, acting through a 2nd wallet, quietly sold all 40 of his personally held V1 Punks just days before Larva Labs released a statement that they considered V1 Punks to be worthless and that the company owned 1000 of them which they plan to dump on the market if they continue to be traded.
The move is definitely shady, and some people are understandably upset. Personally, I happen to think that forbidden art has a nice ring to it and that controversial stories about a piece of art only add to its visibility and value over the long term. Only time will tell if I or Larva Labs is right.
Bitcoin miners expect fast-growing competition
The total Bitcoin network hash rate is now 198 EH/s (exahashes per second), compared with just 143 EH/s one year ago. This 38% increase has been realized despite the massive impact of the China ban on mining last year and reflects the massive profit margin of Bitcoin miners, even after BTC dropped below $40k. One mining company (Argo Blockchain) disclosed a 2020 gross margin of 41% and a 2021 gross margin of 80%. In other words, Bitcoin mining was highly profitable even before it broke $20k, and in the year since, the profitability has increased further and at an even faster pace than competition. The surge in profitability has been driven by the surging price of Bitcoin co-timed with supply constraints on the chips needed to build more mining rigs and the geopolitical instability that caused many miners to relocate during 2021. However, with profits still sky-high, supply bottlenecks slowly resolving, and a number of new chip factories scheduled to come online soon, Bitcoin miners expect the level of competition to surge in the not-too-distant future. Full story here.