A brief history of Non-fungible Tokens

Initially, the idea of NFTs was introduced on the Bitcoin blockchain in 2012-2013, with Colored Coins the very first NFT to exist. Colored Coins are made of small denominations and can be as small as a single satoshi. They represent real-word assets on the blockchain and can be used to prove ownership of assets such as real estate, coupons, digital collectibles, subscriptions, access tokens, equities and even bonds.

This then led to Counterparty in 2014, with the cryptocurrency community realising the potential for issuing assets onto blockchains. Founded by Evan Wagner, Robert Demody and Adam Krellenstein, Counterparty is a peer-to-peer, open-source protocol built on the Bitcoin blockchain. Counterparty allowed asset creation and also had its own decentralised exchange allowing users to create and trade their own tokens and currencies. This paved the way for the trading of card games and meme trading, including the creation of Spells of Genesis which pioneered in-game assets onto blockchain via Counterparty in 2015, and popular card trading games such as Force of Will launching on the Counterparty platform in 2016. This meant it was only a matter of time before memes such as Rare Pepes began to shift onto the Counterparty blockchain. Users began to issue, buy and sell Rare Pepes, the frog meme, creating an intense following of fans, allowing the ownership of unique digital assets to become more mainstream. This included the creation of Peperium, a ‘decentralised meme marketplace and trading card game that allowed anyone to create memes that live eternally on IPS and Ethereum’. This is where we really started to see digital art have intrinsic value. 

NFTs really started to become popularised by the CryptoArt phenomenon in which saw NFTs such as CryptoKitties, CryptoPunks and Rare Pepe’s become notoriously popular & viral, leading users of these networks to cough up large sums of currency to acquire them. Between 2018 and 2021 was when we saw NFTs slowly, but surely, edge their way into mainstream adoption, before exploding in 2021. It was here that the NFTs were being created using 1 of the 2 token standards – ERC-721 and ERC-1155. ERC-721: standard protocol for issuing NFTs. Represents a single unique asset that cannot be interchanged or divided. Think of it like an original painting or diamond – no two are the same. ERC-1155 lets a user mint multiple assets in a single smart contract. ERC-721 is what allowed CryptoKitties to kickstart, being a blockchain-based virtual game in which players can adopt, breed, and trade virtual CryptoKitties using the Ethereum blockchain. CryptoKitties left a blazing NFT trail, which as mentioned, paved the way for NFT collections such as CryptoPunks, Mutant Ape Yacht Club, The Sandbox and World of Women.