Introduction to NFTs
The History of NFTs
The Very First NFTs
With the creation of CryptoPunks by John Watkinson and Matt Hall, the blockchain world got its first introduction to art NFT collections. CryptoPunks are ten thousand individual digital avatars with distinct personalities and representations; no two are alike. Initially, CryptoPunks remained largely unknown since their conception, but with the current expansion of the NFT market, many now sell for millions of dollars, depending on how rare they are.
As a result of the brand-new concept of uniquely verifiable digital tokens, the ERC721 token standard was introduced in September 2017. ERC721 tokens, which were proposed as an Ethereum Improvement Proposal (EIP), allow anyone to generate one-of-a-kind, non-interchangeable tokens, enabling a fresh new application for the Ethereum network.
The ERC721 standard was then used to launch CryptoKitties NFTs. The Ethereum-based game allows players to trade, breed, and adopt virtual cats. CryptoKitties exploded in popularity soon after launch. The premier CryptoKitty, known as the ‘Genesis Kitty,’ sold for around 247 ETH, which was roughly worth $117,000 at the time but is now worth significantly more considering the current ETH price.
The success of CryptoKitties led to the creation of a brand new token standard designed to regulate NFTs, especially in the gaming sector, called the ERC1155 token standard. The ERC1155 token standard is based on the ERC-20 and ERC-721 fungible and non-fungible token standards. It provides a number of unique benefits and improvements, including the ability to allow its smart contract to represent many tokens at once, combining fungible, non-fungible, and semi-fungible token attributes for greater flexibility.
How Did NFTs Become So Popular?
One of the first times NFTs made headlines was in March of 2021. The headline coverage was a result of Christie’s record-breaking $69.3 million NFT sale: “Everydays: The First 5,000 Days,” a piece of digital art designed by Mike Winkelmann, a graphic designer better known by his alias “Beeple.”
Beeple has been creating new pieces of digital art on a daily basis since 2007. This massive sale was one of the first milestones in the astonishing ascent of non-fungible tokens. Christie’s listing of a wholly digital piece of work led to a massive increase in attention on the NFT market and the potential it held.
The non-fungible token art sector is changing the art world for many renowned and aspiring artists as it expands to new heights every day. NFTs provide an exciting and easy way for artists to monetize their work instead of simply giving it away for free or struggling with copyrights, also allowing them to bypass the physical sector.
Jazmine Boykins, for example, has gone from making little money from her artwork online to generating thousands in a matter of weeks. Artists can use NFT technology to register their work, track providence, and minimize plagiarism. It also allows artists to keep track of future sales and collect royalties from them.
What’s Happening Now?
NFTs are a broad and multinational asset class with interested consumers from all over the world, similar to the cryptocurrency market that helped to build them. Indeed, the United States, which is a dominant force in crypto and the world’s leading financial superpower, is the fourth most interested region in NFTs, trailed by a few surprising countries. The NFT market demonstrates the decentralized nature of cryptographic assets.
In fact, anyone can see the tremendous influx in demand for NFTs in most industries. First off, multinational brands such as Facebook (now Meta), Adidas, Starbucks, and Nike are making inroads into the metaverse NFT space. There are also famous personalities like Donald Trump, Snoop Dogg, Steve Aoki, Grimes, and Mike Tyson who have started to advertise their own NFTs, applications, and collections to the general public.
The world of art and digital collectibles is quickly being taken over by the functionality and accessibility of NFTs. Even NFT games like Axie Infinity and Legends of Elysium allow users to learn about crypto and NFTs while playing video games, as well as earn some money in the form of tokens along the way.
We are also starting to see the rise of NFTs with real utility, such as membership programs, NFTs, and ticket NFTs. These could provide real use cases in everyday life, expanding NFTs well beyond their purely virtual capacity.