In this talk I will give a short introduction to the gravity in 2+1 dimensions followed by a brief description of the features of the BTZ blackhole with zero angular momentum. I will then describe how BTZ blackhole can be formed by the collapse of dust in the presence of a negative cosmological constant. I then present the quantization of the collapse solution using the Wheeler-DeWitt equation. I will then talk about how the BTZ blackhole can be described by the exact wave functionals derived using the lattice regularization. The mass of each shell is shown to be quantized. I will describe a way to estimate the entropy of the BTZ blackhole by counting the shells.