The idea of NFT came long before the term was even coined. NFT or Non-fungible-token was actually born out of several experiments with Bitcoin and the blockchain itself. The first idea to make something unique or rare actually was of .bit domains. The project BitDNS was first started with the introduction of so called “Alternative Bitocoin” called Namecoin. This coins allows to keep a registry of .bit domains with the idea that it was possible to keep a record of data in Bitcoin that is certain to be unique. Data was first embedded in the a Namecoin transaction which gave rise to Monegraph, which was a pioneer project of crypto art. The the desire sprout to use Bitcoin more than just as Bitcoin.
However, the idea was still unclear and there was still a lot of clarity needed. But before that, lets first understand what NFT’s or Non-Fungible-Tokens really are?.
What are NFT’s?
Non-fungible-tokens or NFTs are basically digital assets that are unique and rare. So called, there’s only one-of-a-kind of each NFT token. Simply, NFTs are crypto currency tokens just like any other crypto token, however, they are differentiated by the fact that they cannot be replaced, duplicated or interchanged like other crypto tokens. The reason is because each NFT token can hold a specific data or additional information about the digital asset. These can be the data of ownership, description, token ID, history of ownership and so on. It is this data that makes the NFT unique and very special as no two NFT’s are identical. Each of them are unique.
For example, if you have 2 Bitcoins and you give one to your friend. Your friend will possess the exact same bitcoin as yours. There’s no exchange of value what so ever. However, in the case with NFT’s, you are literally trading one NFT with another NFT and in this case Value gets affected because each NFT’s can have it’s own value and therefore they are not mutually interchangeable.
Who invented NFTs?
NFT or Non-fungible-token was first created by Kevin McCoy and Anil Dash on May 3, 2014 live at the Seven on Seven conference at the New Museum in New York City. This was the first experiment on a Non-fungible-token created via on-chain metadata (enabled by Namecoin) and it was linked to a unique work of art.
History of NFTs or Non-Fungible Tokens
Colored Coins: 2012
Colored Coins were bascialy the very first versions of NFT’s. They were however, not completely NFTs. This was the result of the first experiment made on using Bitcoin for more than just ‘bitcoin’. Colored coins were essentially made of small denomination of Bitcoins and the idea was to add meta data to Bitcoin transactions that correspond to a state for a token.
Colored coins was one of the biggest pioneers of NFT’s and it’s failure marked the birth of new discovery. However, there was one problem with Colored coins and that was it could only represent certain values requiring everyone’s agreement. Bitcoin was never created to handle such type of thing and hence, Colored coins made no sense because if 3 people agreed that 10 colored coins represents 10 company shares, if one of them doesn’t equate that colored coins should represent the company shares, the whole system collapses.
Although, Colored coins was a complete failure, it led opened the door to further research and experiment on this matter that such a thing was actually possible and the fact that real world assets could actually be stored and recorded.
Counterparty – 2014
People soon realized that Bitcoin although was the first Crypto-Currency to ever exist, it was not possible for Bitcoin to have such features. While, people also realized the potential of digitizing assets on the blockchain. An financial platform and distributed, open-source internet protocol was built on top of Bitcoin called Counterparty. It was created in a decentralized manner and had a decentralized exchange with a crypto token called XPG.
This lead to the birth of several new experiments and projects. A digital video game card was created called “Spells of Genisis” and a Crypto Project called Rarepepes was also built with the idea to create Meme based digital assets based on Pepe the Frog. More than 1700 different cards were created by over 200 artists and this became what we called the base idea for NFT’s. This was the first time, artists made money and also realized the fact that the blockchain can be used to sell art. The birth of Crypto Art then began.
Spells of Genesis – 2015
Spells of Genesis was basically the pioneers of linking in game assets into the blockchain using Counterparty. They were the first ever projects to launch an ICO. Spells of Genesis funded development by launching a token called BitCrystals. This token was also used as an in-game currency.
Force of Will – 2016
In 2016, Counterparty collaborated with a trading card game called “Force of Will”. It went massive and Force of Will became the 4th Ranked trading card game in North America by sales being just behind Pokemon and Yu-Gi-oh. This was one of the most important moments in the history of NFTs. Force of Will was essentially completely new to the game of crypto-currency and blockchain. But their entrance into the Blockchain and immediately gaining such success signaled the value of putting assets into the blockchain.
Rare Pepes – 2016
The Counterparty platform became massive and there’s no better experiment with digital assets than being memes. It’s one of the easiest to create and make. It was during the month of October, “Rare Pepes” started becoming a thing. People started uploading memes representing the Pepe Frog as the character in the meme. The community grew so big that there is even a “Rare Pepe Meme Directory” where you can find millions of memes created by people. The fact that are experts who can judge whether a meme is rare or not, just tells us how far this idea had actually already gotten.
People, creators and artists already started getting the taste of what it feels like to Digitize a token. But, the massive explosion had yet to come. The popularly was still among only those who were in the Crypto- Community but to the rest of the World, such thing was never even talked about or discussed in the media.
Rare Pepes on Ethereum – 2017
As we know, NFT’s are completely based on the Ethereum Blockchain but why was it so?. Ethereum is the 2nd largest Crypto Currency behind Bitcoin and you may have heard of the term called “Smart Contracts”. In the March of 2017, a project named Peperium was introduced which was essentially a decentralized meme marketplace and trading card game that allowed anyone who create memes that live eternally on the IPFS and Ethereum.
This was the time when people thought that Ethereum is one of the best Crypto Currencies ever to store digital assets on the blockchain. There were several advantages of Ethereum and the number one being “Smart Contracts” and that it could store additional data or information on the blockchain.
Cryptopunks – 2017
One of the most interesting and unique projects ever created in the NFT scene is the Crypto Punks. Created by two Canadian software developers Matt Hall and John Watkinson when they were inspired by the London Punk scenes, electronic music and the Cyber Punk movement. They decided to experiment with a NFT project called “Crypto Punks” which was basically a collection of 10,000 unique punk characters that were algorithmically generated through computer code.
Each punk character was unique to each other. Crypto Punks soon started becoming extremely valuable because of the way the punk characters were generated. As, there were limited number of certain types of punks like Ape punk and Alien Punk having less 10 Alien Punks out of the 10,000 Punk Characters. In 2020 and 2021, some of the Alien Punks sold for millions of dollars with Crypto Punk #7804 which sold for $7.6 Million Dollars USD. While the average Crypto Punks usually sell for $10,000 to upto $100,000.
CryptoKitties – October 2017
When Cryptokitties came into the NFT scene, it became one of the biggest and most interesting NFT Projects ever created. It was launched by Vancouver Based company called Axiom Zen. It was during the ETH Waterloo Hackathon that the game actually got it’s first big attention. There were over 400 attendees during the event and Cryptokitties won the first place and then it got viral all over the internet. This was also the first time, the real public got introduced to the term “NFT” or so called Non-fungible-tokens. YouTuber’s and everyone on media was talking about this Crypto game called Cryptokitites and everyone wanted to learn how to play.
Cryptokitties is basically a virtual game that allows players to collect, breed and trade different kinds of cats. Cats are basically called Kitties and they come in different variations, types, genes and physical features. Players can breed with each other to create a completely new cat while also inheriting some of the traits of it’s parent cat. Players can then sell the cat if they want to just keep it in their collection.
After seeing such huge success of Cryptokitties and the amount of money that people were willing to spend on the kitties, people started to experiment, many new projects started coming out and now NFT was becoming a thing. But it still hasn’t got that worldwide fame that we saw in 2021. There was still more projects to come.
Emergence of the NFT Community And Ecosytem – 2018 -2019
By the time it was 2018, NFT became huge and there were over 100+ projects on NFT’s. These included the launch of several marketplaces like OpenSea, SuperRare and many games, art, collectibles and digital assets were being created.
Here’s a nice look of the entire NFT ecosystem done by The Block.
From here, Non-fungible-tokens just started evolving to a whole new level. We saw companies creating amazing projects, artists creating amazing art and basically, the entire art industry took a new turn, and now art could actually be monetized and made money from.
One of the clear thing to note here is that the rising spike of the hype of NFT started from Crytokitties. It was like yes there were many crypto games that were NFT based and there were Crypto-Marketplaces and platforms but no one really knew about it.
Here “No one” means people who have no idea what Crypto is or what NFT’s really are. In simple, the rise of Cryptokitties and becoming famous was the starting point of the actual hype of NFT. While, along with that, virtual lands were being bought and sold, actual Real Estate were being converted into NFT’s and the art industry was already on a whole new level.
It’s like suddenly we see in 2021 that, NFT or Non-Fungible-Tokens is now the next big thing, but it’s roots started from 2017- 2018.
One of the most famous NFT projects was NBA TopShot which was literally a trading card collectible NFT platform about NBA. Here, you could find and purchase trading cards of different NBA players, however, this one was unique as you would also get a unique video about the best moments of the player in his matches.
While many new ideas were also popping up with one of them being interoperability, where one unique Crypto gaming item or clothing could be turned into an NFT and sold and used on another Crypto Game. You can imagine this as having one of the Skins of Call of Duty game and actually being able to use that skin in PUBG. While, of course such thing is not possible, but many new ideas were popping up.
2020 – 2021 – Beeple and the Beginning of the Fully Evolved NFT Hype and NFT Community
“Money starts rolling in”
By 2020, we saw several digital artists turning into millionaires overnight. In 2020, people weren’t still aware of it yet. But many artists like “PAK” was making history with NFT’s.
The artist PAK was basically one of the most reputed and well-known artist during the 2020 period. This was before Beeple sold his $69 Million dollar artwork. PAK had lot of reputation in the community for creating unique art that consist of geometric cubes that rotate endlessly. He holds the total value of his Digital Artwork of $17,536,770 USD. One of his most famous works is MetaRift that sold for $904,000 Dollars.
While, CryptoPunk had already reached its peak of popularity where the average Cryptopunk NFT was being sold for between $30,000 – $100,000 Dollars USD.
While, Tweets were also being converted into NFT’s and were being sold. As we know, with NFTs, any digital asset can be turned into an NFT. Jack Dorsey was the first one to sell his “First Twitter Tweet” as an NFT. It sold for a whooping $2.9 Million Dollars. Unfortunately, the Buyer of Jack Dorsey’s tweet is now under bars due to government reasons.
People could see how value NFTs can really become and after the culmination of so many NFT sales, projects and drops, many Hollywood artists also started dropping their NFTs in the form of Music and Art. One of them is Bhad Bhabie NFT, who dropped her first Bhad Bhabie NFT on her 18th Birthday.
Coming to Beeple, it was in the month of March, when Beeple sold his NFT piece called “Everydays: The First 5000 Days” for a staggering $69 Million dollars. This was once in history or once in a lifetime moment for the crypto art industry and it broke all the sales records of NFTs up till now.
Beeple’s Everydays had a very simple concept but yet extremely powerful valuable piece of inspiration for any artist out there. Beeple basically drew one piece of artwork everyday since May, 2007 for 5000 days. In those 5000 days, he created 5000 artworks that he compiled and sold all the pieces for $69 Million dollars.
But his Everyday’s, The First 5000 Days has a very powerful message for artists all around the world. It shows Beeple’s progess through his art career and how he grew from drawing lines to now creating complex pieces of creative artwork. His collection if we look closely depicts his entire progress in his art career and that, it tells us to keep working on our craft and passion and never give up. Eventually, at the end, one becomes successful, if one persists.
After the sale of Beeple’s $69 Million Dollar Artwork, NFT is now what it is today. I have written so many articles about several NFT projects, from Memes being turned into an NFT to New York Times, selling one of their published articles as an NFT for $560,000 dollars.
In these 6 Months after the sale of Beeple’s artwork, a lot of things have happened and the NFT hype is not going to end very soon.
I think NFT is still in it’s learning phase. As we are just learning about what NFT’s really are but we actually don’t know how NFTs or Non-Fungible-Tokens really work. We are just seeing the Bitcoin craze that happened 10 years ago and yes, many people will be skeptical while many will be motivated to invest or give it a shot in the NFT scene. I think we should let time decide what’s really going to happen with NFT’s and what’s the future going to be like. Many companies like Visa is already make a move to include Crypto-Currency into their platform. Therefore, in the next 5 to 10 years, NFT is definitely going to change, while it may become better and that means today could be the right time to step in, but it’s definitely not going to be the same.