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History of NFTs


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2012-2016 - The Early History Of NFTs​

Long before Ethereum existed, the concept that became the driving force of NFTs was already thought up when in 2012, a paper by Meni Rosenfield was released that introduced the ‘Colored Coins’ concept for the Bitcoin blockchain.

The idea of Colored Coins was to describe a class of methods for representing and managing real-world assets on the blockchain to prove ownership of those assets; similar to regular Bitcoins, but with an added ‘token’ element that determines their use, making them segregated and unique.

The limitations of Bitcoin meant that the Colored Coins concept could never be realised, however, it did lay the foundation for the experiments that led to the invention of NFTs.

On May 3rd, 2014, digital artist Kevin McCoy minted the first-known NFT ‘Quantum’ on the Namecoin blockchain. ‘Quantum’ is a digital image of a pixelated octagon that hypnotically changes colour and pulsates in a manner reminiscent of an octopus.

Following these events, a significant amount of experimentation and development occurred and there were platforms built on top of the Bitcoin blockchain. The Ethereum blockchain also started its initial reign over NFTs.

The Counterparty platform (Bitcoin 2.0) was established and gained ground as a platform that enabled the creation of digital assets.

Spells of Genesis followed close behind in the footsteps of Counterparty and began pioneering in the issuing of in-game assets.

2016 beckoned on the age of the meme and saw the release of a host of Rare Pepes NFTs on the Counterparty platform.

Important to note, however, is that the Bitcoin blockchain was never intended to be used as a database for tokens representing the ownership of assets, and thus began the big shift for NFTs to the Ethereum blockchain.

2017-2020 - NFTs Go Mainstream​

The big shift for NFTs to Ethereum was backed up with the introduction of a set of token standards, allowing the creation of tokens by developers. The token standard is a subsidiary of the smart contract standard, included to inform developers how to create, issue and deploy new tokens in line with the underlying blockchain technology.

Two software developers; John Watkinson and Matt Hall, followed up the success of the Rare Pepes with their own generative series of NFTs on the Ethereum blockchain which they branded as CryptoPunks. CryptoPunks are considered some of the first NFTs created and originally offered for free. The experimental project, limited to 10,000 pieces with no two characters the same, was inspired by London punk culture and the cyberpunk movement.

During the world’s largest hackathon for the Ethereum ecosystem, the Vancouver-based venture studio Axiom Zen introduced CryptoKitties.

CryptoKitties is a virtual game based on the Ethereum blockchain, the game enables players to adopt, breed and trade virtual cats, storing them in crypto wallets. After its announcement it wasn't long before the game became a viral sensation, becoming so popular that CryptoKitties clogged the Ethereum blockchain and people began making unbelievable profits.

Following the huge success of CryptoKitties, NFT gaming really began to gain momentum and move forward with NFTS gathering increasingly more public attention.

NFT gaming and metaverse projects were in the spotlight and the first to break ground in this space was Decentraland (MANA), a decentralised VR platform on the Ethereum blockchain. Decentraland is an open-world gaming platform that allows players to explore, play games, build, collect items and more, and everything that you find, earn and build there, you own on the blockchain.

It wasn’t long before other platforms and games using Enjin Coin (ENJ) appeared on the scene, allowing developers to tokenise their in-game items on Ethereum, giving those in-game items a value in the real world.

Another blockchain-based trade and battle game also emerged, Axie Infinity (AXS), a game that is partially owned and operated by its players.

2021 - The Year Of The NFT​

2021 became the year of the NFT and there was a huge explosion and surge in NFT supply and demand.

One of the biggest factors in this boom was the huge changes that occurred within the art market and the industry at large, when prestigious auction houses; Christie’s and Sotheby’s namely, not only took their auctions into the online world but also began selling NFT art.

This led to Christie’s record-breaking sale of Beeple’s Everydays: the First 5000 Days NFT for $69 million. Such a huge sale from such a prestigious auction house validated the NFT marketplace significantly.

As well as the surge in demand for NFTs that resulted from the famous Christie’s auction another knock-on effect was other blockchains getting involved and starting their own versions of NFTs. These included blockchains such as Cardano, Solano, Tezos and Flow. With these newer platforms for NFTs, some new standards were established in order to ensure the authenticity and uniqueness of the digital assets created.

Towards the end of the year, once Facebook rebranded as Meta and moved into the metaverse, the surge in NFT demand and especially within the metaverse was remarkable.