The CryptoPunks collection features 10,000 collectible characters with proof of ownership stored on the Ethereum blockchain.
On August 18, digital payments giant Visa spent $150,000 to buy a unique work of art, and in so doing quietly took its first step into the metaverse, a nascent online world that promises to transform the internet into a virtual reality.
Instead of canvas or marble, the pixelated artwork, named CryptoPunk 7610, is what’s known as a non-fungible token (NFT), a unique digital asset which, similarly to bitcoin, certifies the authenticity, ownership and provenance of any digital object written to a blockchain. One of the 10,000 24x24 pixel images of the CryptoPunk collection, generated algorithmically, Visa’s first NFT is an avatar of a female character, distinguishable by a mohawk, large green eyes and bright red lipstick.
However, the company didn’t actually custody the 49.5 ETH, paid for the token, or the asset itself. Instead, newly licensed bank, Anchorage, has helped facilitate the deal, and importantly became the first known U.S. bank to custody one of these novel assets.
As a growing number of crypto enthusiasts, gamers, founders and investors rush to stake their claim in the all-encompassing world of virtual experiences, digital assets and avatars, the seemingly simple transaction blazes a new trail for the kinds of services payments companies and banks may need to offer in the future.
“We think that NFTs are going to play a really important role in the future of retail and social media, entertainment and commerce,'' says Cuy Sheffield, head of crypto at Visa, who is an avid NFT collector himself. “So we wanted to understand firsthand what it takes to acquire, custody and interact with an NFT. We’ve worked with Anchorage to do this so that we can build the expertise and be better positioned to help clients navigate this space.”
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According to the information shared exclusively with Forbes ahead of the announcement, the transaction, involving an undisclosed third party seller, was executed via an Ethereum smart contract, decentralized software running on the blockchain, and conducted primarily by Anchorage. Its details can be viewed on the website of CryptoPunks developer Larva Labs.
