While you may have heard of NFTs in the mainstream media in 2020, the start of NFTs begins all the way back in 2012. It didn't begin with NFTs, it started with a small group of people who were learning all about cryptocurrency, digital ownership and decentralization.
A quick refresher, NFTs represent non-fungible unique digital tokens that exist on the blockchain. For example Bitcoin is a token that is on the blockchain but it is fungible, this means that each Bitcoin is the same as the other. Whereas a non-fungible is one of a kind and has no identical equivalent. The media that we see associated with NFTs are digital assets that the tokens are linked with, so this can range anywhere from art, music, collectibles and so much more. For example, those Bored Apes you see all over social media are digital artworks linked to unique tokens that are on the blockchain. Now let's dive into the important moments in NFTs that lead to their rise in 2020.
NFTs began not as PFP (profile picture) collections or with any art focus but rather as representations of small portions of Bitcoins called Colored Coins NFTs. They depicted digital ownership of different types of real world assets. With Colored Coins you could purchase other cryptocurrencies, cars, digital collectibles, government bonds and exclusive access to digital channels to name a few. These coins would be the first ever form of digital ownership through a token that would trigger the development of NFTs.
The next significant phase of NFTs happened in 2014 when 3 developers launched a platform called Counterparty. Counterparty is an open source protocol that furthers Bitcoins functionality, meaning that it allows people to develop and trade assets on a decentralized ledger network. Many in the crypto community back then began to use this platform for digital creation and transactions. A few noteworthy creations made on the platform include Force of Will that sold trading cards (2012), Rare Pepes that used meme culture to gain mass popularity (2016), and Spells of Genesis which is a mobile game (2017). Counterparty played a huge part in making art an important feature in NFTs. Soon after, generative art began to make massive leaps in the NFT space which brought even more artists and creators into the community.
McCoy created an art piece called ‘Quantum’ that was one of the first NFTs that was purely an art focused NFT. This was an important step as it demonstrated to artists that they could use NFT technology to sell their work without the need for an additional function attached to them. Quantum was valued at 7 million dollars and McCoy has continued to create stunning artworks that inspire artists everywhere.
The first PFP collection that grew in popularity and value is the CryptoPunks, a set of 10,000 uniquely generated characters that were given away for free. It was only on the secondary markets (where the owners of the NFTs could resell them) they began to sell for crazy price tags. These pixelated characters inspired billions of dollars in NFT sales, helping to spark the hype in the blockchain world while forging a path for future developers, creators, investors and artists.
CryptoKitties also performed impressively when they launched and were responsible for pushing NFTs into the mainstream media. This collection is a blockchain-based game where people can use Ethereum to buy (or "adopt"), raise, trade, and breed kitties. They were introduced to the public at a crypto event and their popularity skyrocketed instantly. They were talked about in media outlets such as CNN, MSNBC, and The NY Times which generated even more buzz and demand for NFTs.
With the rise of NFTs came the creation of NFT marketplaces, which played an essential role in making the NFT space more accessible. NFT marketplaces allow people to mint, sell, trade, and buy their digital assets. Although we have a variety of marketplaces now, it all began with OpenSea, the largest and most well known marketplace to date.
Following the CryptoKitties buzz, founders Devin Finzer and Alex Atallah launched the first version of OpenSea on the Ethereum blockchain. Due to the overwhelming demand, OpenSea quickly became a 48 member company with 300k+ active users, with over a million collections on the platform, 50+ million NFTs available, and a whopping $4 billion volume of currency transactions.
The year of 2021 saw some incredible accomplishments in the NFT world that further expanded the awareness of the space. Here are some impressive statistics from 2021:
Mike Winkelmann, known as Beeple, made NFT history in March 2021 when he sold his art piece titled ‘Everydays – The First 5000 Days’ at an auction for $69 million. The high cost of this piece shows how much people are willing to pay to own a digital artwork. It reinforces the belief that NFTs will be an important part of the art world in the future.
Digital artist Pak’s broke a record at Art Basel by selling $91.8 million worth of his art piece ‘The Merge’ on Nifty Gateway. His art was bought by 28,983 collectors who purchased 300K+ pieces of the project. While some are unclear as to whether his art counts as a single digital artwork or a digital collection, the sheer total sold is very significant.
Although NFTs have had a long journey to get to this point, they are still in their early stages and will continue to advance over the years. Tons of money is being invested into NFT technology and the online community surrounding them continues to grow. Thanks to the efforts of developers and artists who continuously create opportunities in the NFT space, and the ongoing discussions about what's in store for the Metaverse, you can look forward to more news about NFTs in the years ahead.