A Brief History of NFTsWhat Are NFTs Used For?How to Set a Price on a NFTBuilding a Successful NFT ProjectAdditional Resources
As entrepreneurs and developers transition to building in a world of Web 3.0, you would be hard-pressed not to mention NFTs in the same breath. While it's tempting to label NFTs as only digital art, their utility goes far beyond just the digital collectibles and profile pictures used for social media clout.
Although the ultimate impact of NFTs on business and culture remains to be seen, their growing popularity warrants anyone with a curious mind to take a deeper look into the existing ecosystem.
In this article, we'll briefly explore the past, present, and future of NFTs and highlight the key developments of how we got to where we are today.
Unlike traditional cryptocurrencies, NFTs, also known as non-fungible tokens, are unique, digital items with blockchain-managed ownership. Each unit of an NFT can be considered one of a kind. These can consist of collectibles, game items, digital art, event tickets, domain names, and even contract ownership records for physical assets.
At a more technical level, NFTs are non-interchangeable units of data stored on a blockchain, making them resistant to tampering, destruction, or replication. As such, NFTs can be verified by the blockchain, giving them extrinsic value as well.
'Non-fungible' refers to an asset's unique qualities and traits that make it completely standalone and non-replicable from other assets. Conversely, a good example of a fungible asset can be a currency. When dealing with currency, a five-dollar bill will always be replaceable by another five-dollar bill (or even five $1s).
Though non fungible tokens can seem complex, you can think of them as a vehicle to share virtually any form of media using the blockchain.
What are non-fungible tokens? (Image source)
As is often the case with innovative technology, NFTs didn't just appear out of nowhere, becoming a household name overnight. Which naturally leads to the question: when was the first NFT created?
That depends on who you ask. Some believe Colored Coins, created in 2012, maybe the rightful owner of being the first. As investor Andrew Steinworld shared on his Medium page:
"One could argue that Colored Coins are the very first NFTs to exist. Colored Coins are made of small denominations of a bitcoin and can be as small as a single satoshi, the smallest unit of a bitcoin....
Colored Coins exemplified a huge leap in Bitcoin's capabilities, however, their downside was they could only represent certain values if everyone agrees on their worth. Bitcoin's scripting language was never meant to enable this type of behavior within its network, thus Colored Coins were only as powerful as their weakest participant."
Others may consider Kevin McCoy's "Quantum" NFT minted on the Namecoin blockchain May 2nd, 2014, the rightful owner of the "first NFT title."
In 2017, a project launched by Dapper Labs on Ethereum called “CryptoKitties” was the first widely-recognized implementation of NFTs, launching on the new ERC-721 standard for Ethereum. These digital cats became wildly popular in the crypto boom of 2017, selling for as much as 600 Eth (or $172k) at the time, and attracted mainstream attention across the world.