Historical Development of Non-fungible Tokens
Overview
The word NFT has become popular relatively recently but NFTs are nothing new in terms of technology.
After the emergence of bitcoin, enormous projects have sprung up that take advantages of special internal protocols of the bitcoin blockchain.
As a matter of fact, the power of NFTs and cryptocurrencies was well envisaged in 2011 when the .bit domains were started, though not sanctioned by the Internet Corporation for Assigned Names and Numbers (ICANN).
At the end of this article, I’ll give you the explanatory diagram to summarise all the historical developments. To understand that diagram, you need to first go through the article.
Genesis of NFTs
In 2012, few innovative people imagined that meticulously monitoring the origin of a given bitcoin, a set can be coloured to vary the colour of the coins from the rest of the lot. These coins may have special independence of quality and face value. The use of such protocols has generated a token that has been called “Colourful Coins”. These coloured coins actually started around 2013, and were actually the first NFTs in history.
Coloured coins did not work very differently from non-fungible tokens. Their aim was simply to incorporate a host of resources within metadata.
The main reason for the invention of coloured coins was to open the door to develop new facilities in bitcoin.
The aptitude to create coloured coins in the form of tokens, actually linked to the real-world assets, which was technically backed by Blockchain Network, generated a unique and promising opportunity for modern-day traders.
Important feature of the coloured coins was to incorporate a transaction model called Genesis and opened multiple new avenues for new technology-based experiments, especially in terms of holding real-world assets on digitally distributed accounts.
Spells of Genesis
Spells of Genesis was the 1st blockchain-based mobile game created in 2015.
It combined the features of Trading Card Game with the features of point-and-shoot arcade games.
Players need to collect and collect cards to have strongest deck to win over their opponents.
Etheria
Etheria is the first virtual world environment created in 2015, in which players can own tiles, farm them for blocks, and build their own objects. In Etheria, the whole state of the world is maintained in the decentralized Ethereum blockchain. All player actions are also made through and recorded in the same Ethereum blockchain.
Counterpart platform
In 2014, Counterparty, an open-source platform was developed. On this platform peer-to-peer applications could be designed and developed. Initially, this application was oriented towards the financial sectors on the Bitcoin blockchain. However, in present, it can implement and support various protocols of creating the assets, issuance of bonds from trading of these assets, and assets in a decentralized market.
Its open-source protocol allows one to write smart contracts, turning multiple real-world actions into a single code. It all works without the need of any manual intervention and that’s why is very secure.
Interestingly, the Counterpart platform was created because of the willingness to develop a system where all the concerned resources are enabled for blockchain and by coloured coins. Developers gave the name to the token as XCP.
Counterpart’s concept popped-up to limelight in year 2014, resulting in the first blockchain-based game in the world.
Rarepepe and CryptoPunks
If you ask me, when the concept of NFT got germinated, the answer is… 2017. In 2017 Ethereum, now a well-known name in cryptocurrency world, started to gain importance, first by announcing its own collection of unique Pepe memes in 2016, and then with CryptoPunks in 2017.
The real success over-erupted when John Watkinson and Matt Hall realized that they can get unique characters generated on Ethereum’s blockchain. Due to their uniqueness, no two characters were of same type. Also, they kept these characters as limited-edition ones. This concept actually led to the genesis of CryptoPunks Project.
Watkinson and Hall decided to allow anyone to claim with Ethereum Wallet cryptopunk for free, and it so happened that All the characters were claimed.
CryptoKitties
Following their breakthrough, the first blockchain-based virtual game that allows players to adopt, breed, and trade virtual cats were also born. It’s called CryptoKitties and is perfect for people who liked to scuffle with Tamagotchi in the 90’s.
The project soon went viral and became headlines in major media outlets because people were making huge profits by selling digital kittens for up to $100,000.
Soon after, the creators of CryptoKitties developed a company named Dapper Labs, which further propelled the business growth and increased the investors multi-fold.
OpenSea
In 2017, an online non-fungible token (NFT) marketplace company OpenSea was created in America, by Devin Finzer and Alex Atallah.
OpenSea provides a marketplace that allows the sale of NFTs directly at a fixed price or through auctions, based on the Ethereum ERC-721 standard.
In 2021, following increasing interest in NFTs, the company’s revenue reached $95 million in February 2021 and $2.75 billion in September of the same year.
As of January 2022, the company was valued at $13.3 billion and is considered the largest non-fungible token market.
In July 2019 a joint venture between the National Basketball Association of USA, the NBA Players Association and Dapper Labs got united to create NBA Top Shot (in 2020), a marketplace in which jaw-dropping plays and unforgettable highlights become collectibles that you can own forever.
NBA Top Shot is a blockchain-based platform that allows people to buy, sell and trade numbered versions of specific, officially-licensed video highlights of thrilling games.
As on September 2021, the NBA Top Shot valuation was around $7.6 billion.
Everydays
“Everydays: The First 5000 Days” is another NFT (digital work of art) created by Mike Winkelman, popularly known as Beeple.
The work is a collage of 5000 digital images created by Beeple for his Everyday series. Its associated NFTs were sold at Christie’s in 2021 for $69.3 million, making it the first place on the list of the most expensive NFTs.
Current Scenario
Now we have numerous NFT projects developed by many big and small companies around the world.
The ease of interconversion is forcing the people to throng into the NFT and cryptocurrency space. For example, the virtual wallet MetaMask gives you the flexibility to import your virtual coins and convert them to Ethereum cryptocurrency (extensively used by NFTs). Then you can buy tokens from most of the prosperous markets.
Today, NFTs use ERC721 standard ( ERC stands for Ethereum Request for Comment). ERC721 was developed to track the movements and properties of personal tokens and let them be recognized legitimately.
The history of NFTs is not very old and is rambling. It will continue to evolve and grow rapidly and has a potential to completely change the digital marketplace.
What’s Next?
Recently, NFTs became popular due to a record $69.3 million for sale of digital artwork, stage by artist Mike Winkelman, auctioned by Christie’s Auction House in March 2021.
According to trusted sources, the teams at Facebook and Instagram are building a feature that will allow users to display their NFTs on their social media profiles, as well as a tool to help users create collectable tokens. Working on prototype.
Meta will be launching a digital marketplace where normal users will be allowed to buy and sell NFTs without any extra account which will facilitate the users to trade NFTs as part of their daily routine.
These proceedings mark Meta’s first attempts to capitalize on the hyped-up world of NFTs, whose popularity soared last year to a $40 billion global market.
Considering a flood of projects, many with huge turnover, I can safely assume that the growth will be exponential.
Investment by many big players is growing and hence unique digital products will grow rapidly. The zealous collectors have made this a real fad.
The market is expanding its reach very quickly by providing value for investors’ efforts and money invested in NFTs. This trend is expected to continue for few years before it gets stabilised.
Summary of Historical Development of Non-fungible Tokens
The author of this article, Mudabbir Syed, is a Motivational Guide, Career Advisor, and Personality Coach besides being a part-time investor in small ventures, stocks and NFTs. He is a Columbia Business School, NY, USA alumnus, and has been helping people around the world with his invaluable experience in the field of “Personal Development” and “Overcoming Hurdles of Life” for over 20 years.