NFTs: A Brief Introduction and History

Non-Fungible Tokens (NFTs), which haven’t drawn much attention since CryptoKitties in 2017, have returned to the spotlight in 2021. Read on to learn how the landscape has changed, from the resurgence of CryptoPunks, to newer NFTs like Axie Infinity!

Key Takeaways

Non-fungible tokens combine the best traits of decentralised blockchain technology with non-fungible assets to create provably unique, provably scarce, and provably authentic tokens utilising blockchain technology.

NFTs are applicable in a wide range of use cases, including collectibles, gaming, art, virtual assets, tokenising real world assets. They also allow for a flexible way to store, control, and protect the information related to one’s identity.

Non-fungible tokens have had a long history, since 2012 with the introduction of coloured coins built on the Bitcoin network. Since then, NFT have primarily moved to Ethereum, where non-fungible token standards such as ERC-721 and ERC-1155 can be minted and traded easily and seamlessly.

The first NFT collectibles that really took off in popularity were Rare Pepes. This was followed by CryptoPunks, and then arguably the most successful and well-known NFT project ever, CryptoKitties.

During the Ethereum boom of late 2017 and early 2018, NFT activity in CryptoKitties drove a huge spike in activity. When the market crashed in 2018, however, interest in NFTs was also impacted and stagnated until late 2020, when NFT saw a resurgence with the resurgence of CryptoPunks, and newer projects like Hashmasks, Axie Infinity, and NBA Topshots.

Despite this, the adoption of NFTs is still low relative to the tens of millions of people who own cryptocurrencies worldwide. The roadblocks preventing mass adoption of NFTs are inaccessibility, the newness of the technology, the volatility of transaction fees, difficulty to link real-world assets to NFTs, and regulation.

Read the full version of the NFTs: A Brief Introduction and History here.