History of NFTs — What, When, How & Why?
Read how NFTs came into existence and what the facts related to their emergence.
Long ago as trade was beginning to develop and people began to carry out transactions between one another, a number of terms for exchange began to emerge over the years. From the barter system to fiat money, from digital assets to digital currencies we have seen it all.
Lately, with the evolution of WEB3, the term “NFTs” has garnered wide acclaim and popularity. But what is NFT? How did it become so popular and how did this come into existence?
Hold your breath and clear your concepts, as we start by addressing all these queries!
Starting with understanding the meaning of NFTs
What are NFTs?
Non-fungible tokens are referred to as NFTs. Their non-fungibility means that they cannot be exchanged, replicated, or replaced because they are not interchangeable. Perhaps that explains its popularity.
Tokens that are not fungible are simply digital assets that are unique. An example of a non-fungible token would be a piece of art. One can never have two similar assets. While their types might be similar, their values and characteristics will always be different.
Now that you know What NFTs are, let’s see how they were invented;
Invention of NFTs
After the advent of blockchain and cryptocurrencies in 2009, the story of Non-Fungible Tokens (NFTs) started to unfold. Since then, we have seen a lot of exciting developments in the industry; as the details of digital assets are explored, NFTs are now enjoying their well-deserved spotlight as more and more people explore them.
The first non-fungible token was created by Kevin McCoy and Anil Dash on May 3, 2014 during the Seven on Seven conference that took place at the New Museum in New York City. It was the first time a non-fungible token had been created using on-chain metadata, and the token was also linked to a unique piece of art.
A great deal of attention has been paid to the history of NFTs, so let’s explore how they work and how they’ve evolved over time.
01. Coloured Coins: 2012–2013;
Following the launch of Bitcoin in 2009, one of the first NFT-like tokens appeared as “Coloured Coins” in a 2012 blog post from eToro’s CEO and founder, Yoni Assia.
The Coloured Token would be the first attempt to represent a real-world asset on the Bitcoin blockchain. Colored coin wallets included the code of Bitcoin transactions 10 units of real-world assets such as shares, gift vouchers, or leverage these coins for voting and access.
It was Colored Coins that revolutionized Bitcoin, but their downside was that they could only represent certain values if everyone agreed that they were valuable. In case any single participant chooses to vote against it, the entire valuation will collapse.
02. 2014 — Counterparty;
With Colored Coins, many people saw the potential of issuing assets on blockchains. Based on the Bitcoin blockchain, Counterparty is a peer-to-peer financial platform and distributed, open-source Internet protocol founded by Robert Dermody, Adam Krellenstein, and Evan Wagner.
The Counterparty platform allowed asset creation, a decentralized exchange, and a crypto token, XCP. There were several projects and assets, including a trading card game and meme trading.
> April 2015 — Spells of Genesis on Counterparty
> August 2016 — More Trading Cards on Counterparty
> October 2016 — Rare Pepes on Counterparty
03. October 2017 — CryptoKitties;
With CryptoKitties, NFTs go mainstream. Virtual cats can be adopted, raised, and traded in CryptoKitties, a blockchain-based game.
From CoinDesk to CNN, this incredible project was everywhere. Possibly the game was slowing down the Ethereum blockchain or people were making crazy profits trading them. Some virtual cats were even selling for over $100,000.
CryptoKitties were launched in October 2017 by Axiom Zen, a Vancouver-based company. Introducing the game at the developer conference with 400+ developers present was the perfect opportunity. During the hackathon, the CryptoKitties game won first place.
Virtual cats were being bought, bred, and traded like crazy. Several people saw the potential of non-fungible tokens. Top investors including a16z and Google Ventures funded Axiom Zen’s spinout company Dapper Labs with $15 million. NFTs became more popular after the CryptoKitties community and top investors poured money into Dapper Labs.
Following the paths of these popular projects, major companies started investing their attention and funds into creating more reliable spaces for NFTs and researched in depth for utilizing them in more ways.
The history of non-fungibles is much longer than most people realize. From the earliest attempts at NFTs during the 2012–2013 Colored Coin era to today’s more extensive use of NFTs, we are seeing a lot of development in the terms.
In spite of the massive growth, we have experienced in recent years, space is still extremely young, and growth will only continue. As more and more companies and people realize the impact NFTs can have, the growth of the NFT ecosystem will accelerate.
As developers continue to develop innovative uses, interoperable items will provide a major change to the industry.
Within five years the NFT space will look radically different from what it is today, in which case we shall come back with yet another update on the history of the ecosystem!
Till then keep the following CITRUS for more updates!