Brief History of NFTs
The concept of digital assets is not new; it’s been around for some time. However, the first decentralized cryptocurrency was Bitcoin, which successfully introduced the idea of a digital asset in 2009. So, many people began to call bitcoin as “digital gold.” Nevertheless, bitcoin, which is fungible, was the first decentralized cryptocurrency. In 2012, when people were looking for ways to transfer assets, colored coins were the first attempt of this kind.
On top of the Bitcoin blockchain, Colored Coin developed a very efficient method for issuing and transferring any kind of asset while simultaneously documenting the asset’s ownership in the transaction. The colored coin program was discontinued in 2018 and is no longer in operation.
The next significant advancement in technology came with Counterparty, which debuted in 2014 and is still widely used today. Counterparty was also developed on top of Bitcoin block chain. Using peer-to-peer communication, Counterparty’s nodes can quickly create digital tokens that can represent anything and are simple to exchange. The rise of ICOs and crypto exchanges in the fourth quarter of 2017, at least 20 token offerings were completed on the Ethereum blockchain. By the end of 2018, we saw a total of over 130 individual tokens listed on Coinmarketcap.com alone. In addition to that, more than 300 different cryptocurrencies have been traded on exchanges in 2018. It’s hard to imagine how much progress there has been in just five years!
NFTs have been around since 2013 when they were first introduced to the world by cryptographer, Nick Szabo. They have been popularized by CryptoKitties which is a game that uses NFTs to trade and breed virtual cats.. With the introduction of “crypto kitties” and “crypto punks”, both were created on the Ethereum block chain because Ethereum supports smart contracts, NFTs really started to gain traction in the mainstream market. Simply put, a smart contract is a program that runs on the Ethereum blockchain, a set of data and code that is stored at a particular address on the Ethereum blockchain. An Ethereum account with a balance that can send transactions over the network is a smart contract. They are deployed to the network and run according to a program; they are not, however, under the control of a user.
The first NFT to launch on Ethereum was Cryptopunks, after which Cryptokitties appeared and helped spread awareness of the ERC721 smart contract standard. Each token is distinct because ERC721 is a standard for representing ownership of NFTs. NFTs slowly gain public awareness from 2018 to 2021, when they are quickly embraced by the majority of people. Nowadays, businesses, artists, and collectors all use it extensively. NFTs are increasingly being utilized by other industries to help fund projects, such as crowdfunding solutions like the Gnosis token sale and the Oasis of all tokens (OAT).