Non-fungible tokens, or NFTs, have rapidly become a cornerstone of the cryptocurrency market, achieving prominence in just a few years. Though NFTs exploded into the mainstream consciousness in 2020 and 2021, the roots of the technology actually extend decades in the past. This article explores the history, technology, and impact of NFTs, examining everything from what makes these digital assets unique to how they are being used today.
The story of these digital assets started long before their boom over the last year. The idea developed out of initial test runs with the technology behind blockchain. Today NFTs have gone well beyond digital art, revolutionizing industries from gaming to the digital culture.
The Genesis of NFTs
The first idea that would eventually lead to something like NFTs would come along in 2012 with a project called Colored Coins. These were known as Colored Coins, which were defined denominations of Bitcoin, differentiated by extra information (metadata) attached to them that enabled them to represent real-world assets.
Developers logged many hours experimenting with technologies like NFTs all throughout 2012 and 2013, creating the foundation for what would come next. These pilot initiatives were the first look at how blockchain could be used as a new way to represent and transact unique assets.
The first real NFT collections, the types we see on today’s NFT marketplaces, launched in 2017. This represented an important first step in the broader development of digital assets. This year has been characterized by launching foundational projects that would go on to shape the NFT landscape.
Pioneering NFT Projects
In June 2017, Larva Labs released CryptoPunks, a somewhat iconic collection of 10,000 unique pixel art characters. Known as NFTs, these digital collectibles have exploded in popularity, with some recently fetched sales of their own in the millions of dollars.
In 2017, CryptoKitties exploded onto the scene, engaging consumers with a platform of collectible and breedable virtual kittens. Play-to-earn NFT game Axie Infinity proved the power NFTs have to cultivate rich experiences that promote engagement!
These initial projects were incredible demonstrations of what is possible with NFTs. They proved the concept that NFTs could be used to represent rare digital pieces of content, with verifiable ownership on the blockchain.
Technical Aspects and Marketplaces
Ethereum is by far the most common platform for NFTs. The ERC-721 and ERC-1155 token standards are currently the most widely used for the creation of NFTs on the Ethereum blockchain.
NFTs can be bought and sold on a variety of marketplaces. The usual process to obtain an NFT involves first purchasing cryptocurrency, then using it to purchase the NFT you want.
Magic Eden is the leading Solana NFT marketplace. It has increased its support to now integrate with Ethereum, Polygon, and even Bitcoin Ordinals.
Popular wallets for NFT storage are MetaMask, TrustWallet, and Coinbase Wallet. Through these wallets, users can easily access, interact with, and safely manage their digital assets.
Expanding Applications and Impact
Even since their earliest days, NFT use cases quickly expanded far beyond digital art. The successful NFT gaming projects such as Axie Infinity, The Sandbox, and Decentraland have shown that NFTs can be much more versatile than just art.
NFTs have radically changed the pace and nature of blockchain adoption, as well as digital culture itself. Even though they’ve been in existence for less than 10 years, they’ve completely changed the landscape of how we create, possess, and transact upon digital assets.
