Being online any time this year, you have probably read about people talking about NFTs, standing for non-fungible tokens, which are unique digital assets. An NFT is a type of cryptocurrency token that, unlike a fungible token like Bitcoin which can be exchanged for other interchangeable tokens, are non-fungible or entirely unique. We want to deep in to the history of NFT in this article.
NFTs were provided as a way to create scarcity online and providing proof of authenticity and ownership mainly applied for digital art or just anything that its uniqueness is the chief selling point. NFT traces back a few years ago. Want to get more information to get informed on the subject? Let us explain more.
How NFTs come to be important?
Well, there are several reasons. As already mentioned, a non-fungible token or NFT is a unique representation of any digital asset on the Ethereum blockchain which makes it scares, provable and valuable. It could be called a new medium for those who are genius to create and monetize their work and collections on one hand, and the collectors who wants a full transparency in to the authenticity and province in to their purchases on the other hand.
Creators are doing their best to push the boundaries of creativity using NFTs in order to adapt them in new and innovative ways so that NFT may take the form of any digital asset such as digital art, collectibles, a creative extension of music or entirely new and unexplored compositions.
Many believe that it is easy to screenshot an NFT without purchasing it, though they are not sure if they can sell it at good value as the value of original. Every time an NFT is traded, both the price and the new owner are automatically recorded to a blochchain- a digital archive- therefore it is traceable and unchangeable. That is why NFTs may guarantee the provenance of the assets they are connected to.
A brief history of NFT and how they got started
Now one may wonder what they buy as an NFT. Imagine a crypto-digital asset like a photo. It is not the photo one may buy, rather it is the property rights to the photo that is sold through NFT, the authentication of a work independent from complot in the legacy art world. Therefore, NFTs not only make it possible to create scarcity for digital work, but also give artists the ability to set their own rates to their works and collections and control the market in order to democratize the access to new markets for artists all around the world.
Who created the first NFT?
Beginning on May 3rd, 2014, Kevin McCoy first minted his non-fungible token “Quantum” which was a pixelated image of an octagon filled with denoting circles, arcs and other shapes sharing the same center and hypnotically pulsing in fluorescent hues. Recently, the one of a kind “Quantum” art piece (2014) was on sale for 7 million dollars.
As the first-rate digital artist, MacCoy believes NFT is deeply a part of the art world, engaging art with creative technology, to motivate enthusiastic art collectors.
A review on the history of NFT
The CryptoArt category was initiated by cultural phenomenon such as CryptoPunks, Rare Pepe, and CryptoKitties. These pieces of ‘art’ got well-known through viral network effects and desire to pay large sums of money to acquire these pieces.
Colored Coins (2012-2013)
In the history of NFT, If NFTs were about to be heroes, then the Colored Coins would be the origin hero. Colored Coins initially issued on the Bitcoin blockchain in 2012-2013 as tokens that represent real-world assets on the blockchain to be used to prove ownership of any asset from metals to car or real state. Bitcoin blockchain, however, used basically with digital assets like digital collectibles, coupons, property, company shares, etc. They were introduced as new technology making possibilities for the future prospects of utilization.
Robert Dermody, Adam Krellenstein, and Evan Wagner founded Counterparty, a peer-to-peer financial platform and distributed, open-source internet protocol constructed on the Bitcoin blockchain in 2014. Counterparty provided a way for users to create their own tradable assets and had a decentralized exchange. It was used for numerous ideas and opportunities, including meme trading, such as Rare Pepe Directory, without counterfeiting.
Spells of Genesis on Counterparty
Team creators of Spells of Genesis developed Counterpart in 2015. The Spells of Genesis game creators were the first to issue in-game assets onto a blockchain via Counterparty on one hand, and were also among the pioneers to launch an ICO on the other hand. Introducing their own in-game currency called BitCrystals, this team helped fund the development of Counterparty.
Trading Cards on Counterparty (2016)
In 2016 new trends started emerging. Teaming up with Force of Will, a popular trading card game, Counterparty casted their cards on the Counterparty platform. Force of Will was the 4th sales ranked card game in North America, behind Pokemon, Yu-Gi-Oh and Magic. While they actually had no prior blockchain or cryptocurrency experience before, their participation to NFTs signaled the value of putting such assets on a blockchain.
Rare Pepes on Counterparty (2016)
Memes were first developed into the blockchain in 2016 and started to make their way onto the Counterparty platform. “Rare Pepes” were used by many to add assets to a particular meme. Rare Pepes are a meme featuring an interesting frog character with an intense fanbase. The comic character Pepe the Frog immediately turned to an internet sensation as one of the most popular memes. CryptoArt was born with the Rare Pepe Wallet; the first time creators around the world could mint and trade their own artwork. It was also the first time digital art could have intrinsic value.
Building on the popularity of the Rare Pepe Directory, John Watkinson and Matt Hall introduced Larva Labs and created unique characters onto the Ethereum blockchain. While the number would be limited to 10,000, no two characters would be the same. The influence of the Cryptopunks project helped inspire the NFT ERC-720 and ERC-721 standards and establish the current crypto art movement. ERC721 makes it possible to track ownership and movements of individual tokens from a contract.
The next big NFT project in the history of NFT after Cryptopunks involved cats. CryptoKitties is a game blockchain-based virtual game centered around breedable, collectible, and adorable cats which could be traded using Ethereum. CryptoKitties was created by a Vancouver-based company called Axiom Zen and quickly went viral. The project was immediately funded by top investors due to their rise in users. Axiom Zen later renamed CryptoKitties to Dapper Labs.
Decentraland follows a decentralized Ethereum based VR platform and lets players buy up empty parcels of 3D virtual space. Gamers can explore, build, play games, collect items and more.
NFT Goes Mainstream (2018)
In the history of NFT, It gradually got the attention from the public since 2018. However, in 2021, it exploded into mainstream adoption. In Valentine’s day 2018, Kevin Abosch partnered GIFTO to introduce a beautiful piece of CryptoArt called The Forever Rose which sold for 1 million dollars. Like many others, Abosch adopted his exciting form of expression to push his creative boundaries. Many examples such as this prove the winning opportunity of NFTs to both creators and collectors. Also, compared to other methods of transferring assets, the NFT market is more efficient and more flexible. There are numerous platforms available online, each hosting differentiators for both creators and collectors.
All the favorable characteristics of NFTs may definitely attract the digital market in both creation and investing on non-fungible tokens, promising a bright future of development.
What is the future for NFTs?
While the history of NFT seems very fascinating, the future of NFTs has endless opportunities as it has the new space transitions from raw and experimental to exceedingly more useful and mainstream. NFTs for sure will be a technology vital to everyday life soon considering its abilities to tokenization, programmability, collaboration, royalties, and more direct connections between artists and collectors. It has always been challenging to predict the future, however with digital art collecting, it should be safe to say that the extent of what will emerge in decades to come is beyond the imaginations.