History of NFTs — Spark* Your Knowledge
Summaries of topics (12/9–15/9)
Date of Activity: 12 September 2022 (Monday)
Topic: The History of Non-Fungible Tokens (NFTs)
Author: Andrew Steinwold
Over the years, non-fungible tokens (NFTs) have caught a lot of people’s attention with its history but how has it impacted the Web3 space? In this article, we will be discussing about some of the biggest art NFT projects we’ve seen in the space but first, let’s take a look at Colored Coins, the NFT project that has shaped the digital world we know of today.
In 2012, Colored Coins were born on the Bitcoin blockchain and they were made of small denominations of a Bitcoin; they can be as small as a single satoshi, the smallest unit of a Bitcoin. However, Colored Coins were more of a utility project than an art project as they were used to represent a multitude of assets and have multiple use cases, including property, subscriptions, digital collectibles and so on! Nevertheless, their downside was they worked best in a permissioned environment and could only represent certain values if everyone agrees on their worth. Although Colored Coins has declined mainly due to its downside and Bitcoin’s transaction speed, it still opened the door to further experimentation and laid the foundation for NFTs.
After the creation of Colored Coins, people started realizing the huge potential for issuing assets onto blockchains and in 2014, Counterparty: a peer-to-peer financial platform built on top of the Bitcoin blockchain was born. Counterparty allowed the creation of numerous assets and projects, including a trading card game called Force of Will which was launched in August of 2016. At the time, only Pokemon, Yu-Gi-Oh, and Magic: The Gathering were more popular card games in North America than Force of Will, which came in at number four. The value of placing such assets on a blockchain was signalled by Force of Will’s entry into Counterparty’s ecosystem, and it was only a matter of time before users started issuing ‘rare pepe’ memes on their network as assets. Today, Counterparty has a wide range of projects developed on its platform, many of which include assets like NFT.
People’s love for these rare pepe memes did not stop at Counterparty because in March of 2017, a decentralized meme marketplace and trading card game called Peperium was launched on the Ethereum network. Like Counterparty’s XCP token (yes, they have their own token), Peperium also had an associated token with the ticker symbol of RARE. This token was used to pay listing fees and was utilized for the creation of memes. As the trading of rare pepes on Ethereum picked up, two creators decided to design a 10,000 unique NFT collection called Cryptopunks which was named based on a reference to the Cypherpunks who experimented with precursors to Bitcoin in the 1990s. Now, that’s cool! Surprisingly, Watkinson and Hall, the “creative technologists” behind Cryptopunks, opted to let anyone with an Ethereum wallet claim a Cryptopunk for free and the rest is history.
Fast forward to October 2017, an incredible virtual game called CryptoKitties that allows players to adopt, raise, and trade virtual cats was seemingly on every news station, from CoinDesk to CNN. Some of these virtual cats were even selling for over $100,000 at the time! Apart from people’s love for cats and the crypto bull market in 2017, Cryptokitties success was also a product of the team’s strategic launch during the ETH Waterloo Hackathon with over 400 developers in attendance. Unsurprisingly, the team won first place in the hackathon and the game went viral.
Following in Cryptokitties footsteps, more than 100+ NFT projects made their debut into the NFT ecosystem from 2018 to 2019. Furthermore, NFT marketplaces such as OpenSea and SuperRare gained ground and their trade volumes were growing at a brisk pace. It is safe to say that CryptoKitties blazed the NFT trail, but they could not have done it without the prior projects that laid the groundwork by building unique digital assets. Nonetheless, the space is still extremely young and growth will only continue.
Date of Activity: 13 September 2022 (Tuesday)
Topic: The surprising history of NFTs in 2 mins
Channel Name: EatTheBlocks
NFTs became mainstream in 2021, but did you know that they first surfaced as early as 2012? The fascinating history of NFTs, from their modest beginnings to their widespread adoption in 2021, will be covered in this article.
The first NFT concept, known as ‘Colored Coins,’ first surfaced in 2012 and was essentially a way to represent and manage real-world assets on top of Bitcoin. Sadly, Colored Coins never really gained traction.
Two years later, a New York artist named Kevin McCoy created an NFT called Quantum on the Namecoin blockchain, but at the time, it wasn’t known as an NFT and no one paid much attention to it.
In 2016, the subset of the well-known pepe memes, dubbed ‘rare pepe’, were mined into Bitcoin blocks. As the trading of rare pepe started to pick up in 2017, a company by the name of Lava Labs produced a collection of 10,000 unique images known as CryptoPunks that were mined into Ethereum blocks.
The same year, Dapper Labs, another company, released Cryptokitties which was one of the first games on Ethereum that allowed users to adopt, breed, and trade virtual cats. The Ethereum network became congested due to Cryptokitties’ extreme popularity! Some of these cats fetched more than $100,000 each. Following all these successes, a standard called ERC721 was created, and it was also the first time the term NFT was mentioned.
The public’s awareness of NFTs continued to rise thanks to projects like NBA Top Shots, but it wasn’t until 2021 that NFTs entered the mainstream and older projects like CryptoPunks were rediscovered and reached enormous valuation. As a result, the largest NFT platform, OpenSea, saw its trading volume increase to $10 billion!
New NFT projects like the Bored Ape Yacht Club also experienced great success thanks to giant advertisements in Times Square, New York. Additionally, there were some enormous NFT sales, such as Beeple, which fetched roughly $69 million. Large companies like Nike, Pepsi, Visa, and Budweiser entered the NFT market; buying and creating their own NFTs.
Despite the claims of some people that there is an NFT “bubble” waiting to burst, the evolution of NFTs has shown us how they will revolutionise the gaming and art industries and help create a new one known as the Metaverse. In short, NFTs are here to stay!
Date of Activity: 14 September 2022 (Wednesday)
Topic: History and culture of NFTs (A SparkWorld* thread)
Some people argue that NFTs are just a bubble but did you know that the tokenizing culture on blockchains have been around for more than a decade? NFTs let you invest in culture and history in a way that was previously impossible, and in this article, we will find out why.
The first known graphic was made on Bitcoin in 2011 by Dan Kaminsky. Although it is not an NFT, it is the first piece of ASCII art embedded in the blockchain. The first real NFT project was created in 2012 and it was called Colored Coins. These coins were minted on the Bitcoin blockchain but unfortunately, the project ended.
In May 2014, the first ever NFT artwork called Quantum was minted on Namecoin. Quantum is a digital image of an octagon in pixel form that changes color and pulsates like that of an octopus. Just recently in June 2021, it retokenized to Ethereum and sold at a Sotheby’s auction for a whopping $1.4 million.
During the same year, Counterparty, a form of data embedding on the Bitcoin blockchain was created. Counterparty made it possible for people to create their own tokens/assets on a blockchain. In 2016, Rare Pepes NFTs were released on the Counterparty platform, and thus began a shift for NFTs to the Ethereum blockchain.
Following this shift, in 2017, John Watkinson and Matt Hall created a set of 10k unique characters on the Ethereum blockchain called Cryptopunks and they were initially offered for free. Cryptopunks was inspired by the London punk culture and the cyberpunk movement. Throughout the same year, Axiom Zen introduced CryptoKitties during an Ethereum hackathon. This project is a virtual game that allows users to adopt, breed, and trade virtual cats.
Only 7 NFT projects launched from 2011 to 2014 and that number saw a slight increase to 10 NFT projects from 2015–2016. However, that was just the start as more than 100+ NFT projects were launched by 2018 and currently, thousands of NFT projects have been launched and are growing in the space! This massive explosion in NFT supply and demand started in 2021 which will forever be labelled as ‘the year of NFTs’.