Blog
2011? 2014? 2017 or 2021? When did the NFT craze actually start?
We experienced a wild bull run in 2020–2021 for the crypto community, especially for the NFT sector. The NFT hype started in late 2020, peaked in the summer of 2021, and swept the market.
Many people created fortunes flipping NFTs — but would you believe us if we told you that the phenomenon of NFTs was first created much earlier than you think?
Mhm. Here’s how 👇
NFTs have been around for a lot longer than most people think, since 2011, to be exact. The first art was registered on blockchain in 2011. Games, memes, virtual land, and collectibles were also added to the blockchain by 2015, via NFTs.
The first experiments of non-fungible tokenization happened in 2012, and they were called “Colored Coins’’. They were not literally “colored”, it was just an early way of embedding data into coins and playing with the concept of non-fungibility on blockchain.
Colored Coins were made of small denominations of a bitcoin and could be as small as a single satoshi, the smallest unit of a bitcoin.
The earliest mention of Colored Coins appears to originate from a blog post in early 2012 by Yoni Assia, titled “bitcoin 2.X (aka Colored Bitcoin) — initial specs.”
Still, even though these were the early steps of NFTs, they weren’t actual NFTs. Until: Quantum
The first known NFT was minted in 2014 by digital artist Kevin McCoy, originally minted using NameCoin, a blockchain software modeled from Bitcoin’s code. Quantum NFT represents a pixelated image of an octagon that hypnotically changes color and pulsates in a manner reminiscent of an octopus.
7 years after (June 2021), Quantum was purchased by Alex Amsel, for $1,47M. He immortalized his purchase with a tweet that says:
So happy to own the first ever NFT, Quantum, from @mccoyspace
— Sillytuna x Soulcast (@sillytuna) June 10, 2021
A piece of history. Let's see how we can continue its story. pic.twitter.com/kCjke2CGkd
The story continued indeed.
A Canadian company sued Sotheby’s and artist Kevin McCoy over the sale of Quantum. The plaintiff is claiming to be Quantum’s rightful owner and asserting that they had secured the rights to the work seven years after its creation after McCoy had let his ownership expire. In the complaint, they call for a permanent injunction to block the defendants from “promoting the sale of the New Quantum NFT as the Original Quantum NFT” and requiring them to make “corrective advertisements” and public statements. The case is still unsolved and continues.
In 2014, the Counterparty platform was established and quickly gained ground as a platform enabling digital assets creation. In 2015, Spells of Genesis followed close behind in the footsteps of Counterparty and began pioneering in the issuing of in-game assets.
The first actual boom happened in 2017, however
It was the year when the crypto industry put itself on the map for millions of people. It is also the year Cryptokitties blew up, a blockchain game on Ethereum developed by Dapper Labs that allows players to purchase, collect, breed, and sell virtual cats. It is one of the earliest attempts to deploy blockchain technology for recreation. It clogged the Ethereum network and made everyone go: “wtf is this?”.
Cryptokitties is not the only important project that came up that year. Crypto Punks, the first NFT collection ever to be created on the Ethereum blockchain, was also created in 2017 by Larva Labs.
Unsurprisingly, Decentraland was also founded in 2017. With its unique design, Decentraland has paved the way for an entirely new kind of virtual space — the metaverse. For the first time, you could own the value you create in the virtual worlds you inhabit, which can be transferred directly to the tangible world. Along with Decentraland, 2017 was the launch year for OpenSea too, the biggest NFT marketplace currently in existence.
Check nfttimeline.com for more information.
Decentraland sold $25M in virtual land, Cryptokitties clogged the ETH network, CryptoPunks started the 10k generated avatar trend, and OpenSea connected it all. — What a year for NFT folks, right?
Then the unspeakable happened — the 2018 crypto market crash. ETH went from $1400 to $100, cryptocurrency as a category was “crushed”, and the tens of thousands of people active on social media became only hundreds. Similar to where we are now, only a lot worse. However, the NFT industry was just starting its run. It just had to wait until 2020. People started making thousands of dollars by breeding and battling Axies, trading virtual land, building a social following/blogs/brands, and collecting rare punks, kitties & art. Early founders were fine-tuning their products to learn about what their user base wanted, traders were learning about the economy, and early NFT artists were experimenting with different types of art on the blockchain. What this means is that, while people were trying to figure out how to work with NFTs in 2020, early adopters knew exactly what to do. The NFT wealth was created before the boom but was actualized during the boom.
The ACTUAL year of NFTs
Yes, you know it — it is 2021. There was a huge explosion and rise in NFT supply & demand. Prestigious auction houses started selling NFT art, Beeple’s NFT was sold for a record amount, other blockchains started getting involved with their own versions of NFTs, Facebook rebranded as Meta, and initiated its move into the metaverse. These are just a few examples of how NFTs took over the crypto world. With the 2022 bear market, NFTs slowed down like everything else.
We couldn’t write an article on the history of NFTs without mentioning the BAYC! Another project founded in 2021 which brought NFTs to the mainstream — the Bored Ape Yacht Club. These NFT rockstars and their 10,000 piece collection exploded on the market and became the fastest growing NFT community in the world, with numerous celebrities showing off their BAYC art.
Their appearance took over the internet — images of grungy apes with unimpressed expressions on their faces and human clothes on their sometimes multicolored, sometimes metal bodies. BAYC is not only an NFT collection with visually appealing ape cartoons. The tokens also act as ID cards to an online clubhouse and even real-world private events. Currently the floor price on OpenSea for a Bored Ape is 94 ETH.
A Bored Ape even graced the front page of The Rolling Stone.
While NFTs have made major headlines for the past 2 years, the bear market is when most ‘wealth creation’ actually happens. 2020–2022 is when this was ‘realized’.
The core crypto community always seems to keep the upside in their mind, through all the market crashes we’ve been through. Or at least, we’re able to find the funny side of every hurdle along the way.
What is next?
We have seen the recent rise of dynamic-based NFTs, which are interchangeable depending on the 3rd party data. From the massive adoption of traditional web2 companies, we have seen the rise of interest within the space. Recently, Snapchat announced that NFTs would be integrated within the AR Filters in the near future.
Additionally, many different ways are being created to organize projects as well, one good example would be the NounsDAO — an innovative DAO changing the concept of ownerships and incubation. Each Noun NFT is generated within the span of 24h and users can bid on the Nouns. This NFT gets them one governance vote in the NounsDAO which currently holds more than 27K ETH in treasury. It is a fair system — 1 Noun NFT equals 1 vote in NounsDAO. This governance is used to further expand the scope of the project.
Despite some uncertainties that have been shared about NFTs, they proved that they’re here to stay and will keep revolutionizing digital and physical ownership in the years to come. The art world has already transformed a lot in the past couple of years, and there are endless opportunities and unlimited potential for NFTs both in the art world and in many major industries which are just discovering the unprecedented utility NFTs offer.
“From the early beginnings, we are just starting to scratch the surface of the new creative possibilities and economies. In 2022 we’ve seen numerous new integrations with immersive technologies, such as CloneX utilizing AR with their NFTs and Botto Project utilizing AI for their DAO-based governed artist.
As new creative models pop up utilizing numerous technologies and combining them with the web3 space, we are definitely on a path to seeing a digitally owned future. Be that from the brand standpoint or the artist’s standpoint.” — RZLT NFT Team
Now is a great time to look back and understand what works and what doesn’t, what has actual staying power, and which projects will end up forgotten.
There are thousands of NFT projects to learn from. The bottom line is, there’s always stuff going on here — the harder you look, the more you’ll find.
If you want to dive into web3 & the NFT world, or simply show us your favorite NFT project — let’s connect 👇
To learn more about web3, check our articles.
Download our reports.
Watch our interviews.