September 20 is officially recognized as NFT Day, and we are celebrating by recounting the relatively brief but colorful history of NFTs—blockchain’s most fun digital assets.
While it may seem like an overnight sensation, the technology behind digital cryptographic assets we now call NFTs can be traced back to 2012—years before Cryptokitties broke Ethereum, NBA Top Shot became the highest-selling digital marketplace of all time, and a very modest Bored Ape sold for $2.8 million. With every passing year, more NFT use cases are discovered, garnering a ton of interest from both the mainstream media and the public. Love them or hate them, NFTs are here to stay and now may be the best time to get involved.
What are non-fungible tokens (NFTs)?
Originally conceptualized as a “monetized graphic,” NFT stands for Non-fungible Token, which means it is unique and cannot be replicated. Fungible, on the other hand, refers to assets that are interchangeable, like dollars or cryptocurrency. If a $20 banknote is replaced with another one just like it, there’s no difference.
A non-fungible token is like a unique serial number or a seal of authenticity that includes ownership details and other metadata, recorded on a decentralized blockchain and verified by network participants. It’s similar to how a car’s VIN number can be used to look up its ownership history, accident record, and other unique features.
NFTs are especially useful in representing the ownership of art, music, videos and now even more obscure concepts like Jack Dorsey’s first tweet or a password to a secret club—basically, almost anything. Another possible future use case for NFTs is the authentication and safe storage of confidential personal information, like a birth certificate or medical records.
Who created the first NFT?
The first NFT, “Quantum,” was minted by Kevin McCoy and Anil Dash in May 2014 on a decentralized name registration database called Namecoin, and it consists of a video clip made by McCoy's wife. Quantum was not known as an NFT back then. The actual term did not enter the lexicon until September 20, 2017, when Dapper Labs CTO Dete Shirley used it in his ERC-721 documentation that later became the universal standard for all modern NFTs. ERC-721 is also the reason we are celebrating International NFT Day on September 20—the day the term “NFT” was officially coined.
NFT history timeline
2012: Colored Coins - a precursor to NFTs
When we think of NFTs, it's hard not to think of the Ethereum network. However, before Ethereum, the concept of NFTs was first explored by the founder of Israel’s first Bitcoin exchange service, Meni Rosenfield. In 2012, Rosenfield wrote a paper introducing the idea of managing real estate assets on the Bitcoin blockchain via something he called “Colored Coins.”
Not quite an NFT yet, the “colored coin” was more of a precursor—a way of using the blockchain to track metadata, prove ownership, and determine the use of a particular real estate asset. The limits of the Bitcoin blockchain prevented this from happening at the time. Still, it did pave the way for the NFT experiments on the Ethereum network.
2014: Quantum - the first NFT ever created
The first record of an "NFT" is a project called “Quantum” which was mentioned earlier in this post. On May 3, 2014, digital artist Kevin McCoy made ‘Quantum’ on the Namecoin blockchain. It is represented by a digital image of a pixelated octagon that changes color and pulsates.
After a lot of experimentation on top of the Bitcoin blockchain, developers eventually conceded that Bitcoin isn’t ideal for supporting NFTs and moved on to create Ethereum—a new type of blockchain that set the stage for the NFT explosion that followed.
2015: NFTs appear in gaming
Spells of Genesis - the first in-game assets
Shortly after the Quantum experiment, the first blockchain-based game called Spells of Genesis—or SoG for short—was created. SoG pioneered the concept of in-game assets combining trading card game functionalities with point-and-shoot aspects of arcade games.
In SoG, players must collect and combine cards to create the strongest deck to fight their enemies. The best part is the ability to “blockchainize” a card by turning it into a highly sought-after, tradeable NFT.
Etheria - the first NFT used by a market
The first example of NTFs being used by a market is in October 2015, when the NFT project, Etheria, was launched at the first Ethereum developers conference, “DEVCON 1,” in London. This happened just three short months after the launch of the Ethereum blockchain.
You might be surprised that most of Etheria's 457 purchasable and tradable hexagonal tiles went unsold for more than five years. It took years for the art world to catch up and acknowledge the value of NFTs.
2016: The first meme NFTs - Rare Pepes
In 2016, we entered the age of the meme-NFT when a host of Rare Pepes were released on the Counterparty platform. A rare Pepe or RarePepe is a variation on the "Pepe the Frog" internet meme, based on a character created by Matt Furie. It was reproduced by various artists worldwide between 2016 and 2018 and a total of 1,774 official cards were released for the project across 36 series.
2017: The term “NFT” is coined and Cryptokitties goes viral
As previously mentioned, the term “NFT" achieved wider usage with the release of the ERC-721 standard via the Ethereum GitHub in 2017. Leading the effort was Dapper Labs CTO Dete Shirley who actually coined the term “non-fungible token” and effectively made Dapper Labs the birthplace of the NFT movement.
Also in 2017, Axiom Zen (Dapper Labs’ parent company) released its wildly popular NFT game CryptoKitties on the Ethereum blockchain, where users could breed, sell, and trade adorable digital cats. Shortly after its release, Cryptokitties clogged Ethereum with its massive transaction volume and almost brought the entire network to a halt. This eventually led to the creation of Flow, a new blockchain that was specifically designed to handle great volumes of user activity.
2020: The NFT gold rush - Beeple, NBA Top Shot, Decentraland, and Sandbox
A lot happened in the NFT world between 2020 and 2021, but here are some important highlights.
During this period, artists like Murat Pak, Tyler Hobbs, Monica Rizzolli, Dmitri Cherniak, XCOPY, Matt DesLauriers who previously worked in virtual art, music, and photography, began selling high-value NFTs. One artist, Mike Winklemann, otherwise known as Beeple, made millions selling his work “Everydays,” which is a collection of 5614 daily art pieces sold as NFTs. He made about $6.7 million USD from just one collection.
Also in 2020, Cryptokitties creator Dapper Labs released NBA Top Shot on the Flow blockchain. It’s a line of officially licensed, collectible NFTs showcasing the best moments from NBA games. Today, NBA Top Shot is the biggest mainstream example of digital trading cards immortalized on a blockchain. If you’re interested in purchasing an NBA Top Shot Moment, you can easily do so by connecting your Dapper wallet—or creating one for free—right from the NBA Top Shot website. You can then display your Moment in your Dapper, send it to someone else, or sell it on an NFT marketplace like Gaia.
As the NFT technology evolved, we started hearing more about its application in various blockchain metaverses—a term popularized by Facebook when they rebranded to Meta in 2021. The first company to explore the gaming/NFT world as its own ecosystem was Decentraland. It’s an Ethereum-powered game where users can buy virtual land with MANA tokens, acquire and trade assets, vote on how Decentraland is run, mint new NFTs, and much more.
A similar NFT-based metaverse, The Sandbox, has also gained popularity to a point where celebrities like Snoop Dogg and Paris Hilton are choosing to “move in.” They are building virtual mansions, hosting virtual rooftop parties, and opening up virtual record labels. Square Enix and Atari are also investing in The Sandbox to create virtual theme parks for The Walking Dead.
What’s next for NFTs?
The world of NFTs continues to rapidly expand. As companies break down barriers to creating and collecting NFTs, we will start to see developments in other important areas such as NFT copyright and trademark laws which are being developed and debated in courts at the time of writing. At Dapper Labs, we are honored to be a part of the NFT story, and can’t wait to see what the future has in store for the next generation of digital collectibles.