From the Middle Ages through to the Renaissance era artists were often thought of as mere laborers as they did work with their hands similar to carpenters and blacksmiths. During the Renaissance artists rebelled against this distinction wishing instead to be considered innovators, creators, and philosophers. Centuries later art was mainly made to order whereby someone wealthy enough specified their vision, signed a contract with the artist and the artist made it happen — hence forgery was not really the topic of the day back then.
According to the late Metropolitan Museum of Art Director and expert on fakes Thomas Hoving, around 40% of all the art in circulation these days is fake or incorrectly attributed.
This is mostly true about physical art which is typically difficult to copy. In the digital spheres, with the ease of copy paste, digital forgery is a recurring issue. Since digital content can be infinitely copied it has been rather difficult for the artists to benefit from their creations and also for the collectors to price the digital assets.
This is where the Non Fungible Tokens (NFTs) step in. NFTs provide a mechanism for an artist to ‘mint’ their artwork be it a song, image, or any content you can imagine. Minting creates a unique token, an NFT, with the artists “signature” attached to it allowing them to prove their ownership. These tokens then exist on the blockchain, Immutable and tradable but never forgeable.
History of NFTs
As much as NFT projects are rapidly growing in number currently, the concept of NFTs is not entirely new. In the early days of the blockchain, several projects attempted to step into this space. The Coloured Coins of Bitcoin are considered the precursors to what we know as NFTs these days. Several blog posts and papers published on the topic in 2012 opened the discussion to the possibilities of such tokens. The famous Coloured Coins BitcoinX white paper asked: Could Bitcoin solely function as a digital currency or could it have further applications? They summarized that “Anything which is (1) representable as a digital asset, and (2) a “rivalrous good” — rivalrous good meaning that only one person can own it at a time — could benefit from the nature of the decentralized and transparent design and thus exist on the (Bitcoin) blockchain.
Even though Coloured Coins were launched in 2014 several factors played a role in these pioneers of this space not getting much traction — not many wallets ended up supporting Coloured Coins while the market clearly was not mature enough to trade real-world assets as digital tokens.
The next big player in this space was without a doubt an internet protocol called the Counterparty. Which functioned on top of the Bitcoin blockchain. Counterparty ended up having a myriad of products deployed on its ecosystem including games like “Spells of Genesis” and “Force of Will” and with memes entering the stage shortly after in the form of the Rare Pepes.
2017 was the year that saw NFTs among many other concepts go viral, with the aid of Ethereum’s ERC20 and later ERC721 technical standards. The latter of which was purpose-built for NFTs. First came the Cryptopunks. 10000 digital 24×24 pixel art images of various characters, mostly punky-looking avatars, released by the true pioneers of the Crypto art movement: Matt Hall and John Watkinson. Initially, these characters were free to claim but hitting the secondary market their value went up and are trading to this day with the cheapest of the bunch costing around 13,69 ETH or 37.000 USD in June 2021.
Cryptokitties — “a game centered around breedable, collectible, and oh-so-adorable creatures” — was the project that managed to launch NFTs into the — CNN, BBC, and Bloomberg level — mainstream. Everyone was either breeding these cute kittens or trading them and in the process congesting the Ethereum chain in an unprecedented fashion.
In 2018 Decentraland entered the scene launching a virtual world where players are able to explore and design the world. Most importantly they have the ability to purchase and truly own the land plots known as parcels as they exist as NFTs.
NFT projects in 2021
While the Punks and Kitties set the tone for the digital art and game asset verticals of this space many avenues were left open to be explored. The ecosystem itself has evolved and matured significantly with the number of use cases, projects, and ecosystems growing by the day.
Opensea is to NFTs what Amazon is to retail — the largest marketplace for art, music, domain names, collectibles, trading cards, virtual world land parcels, and even utility tokens; if it’s an NFT you can be sure that it can be sold, bought and traded here. There are numerous other marketplaces online. Mintable is at the top of the list as their main focus is on making the minting process super straightforward for the creators. Rarible is another amazing option with a vision to become the first leading Defi NFT marketplace where the holders of the governance token $Rari — the community — would be in charge.
If holding on to your precious collectibles is not quite enough you might want to look at Nft20 ($Muse). Nft20 allows one to stake their NFTs into a liquidity pool tokenizing the NFT itself in the process thus making it tradable in exchanges like Uniswap. In essence, you can call Nft20 a gateway between the fungible and non-fungible realms.
If the NFT art piece you are after costs way too much for your liking or maybe you are simply looking at NFT art as an investment and wish to diversify your portfolio — Niftex allows users to buy fractions of NFTs or “shards” which are ERC20 tokens that represent a piece of the full NFT.
Alchemist is one of the most intriguing projects in the crypto space at the moment with their Crucible project. The Crucible allows one to mint their liquidity pool tokens into an NFT vault, called a Crucible, and participate in staking incentive programs. So double the rewards for the price of one, anyone? The concept of the incentive program which they call Aludel is also rather brilliant, multiplying the rewards for the participants over time , hence the longer you commit the higher the yield.
In the gaming domain, there is no way around Enjin. They developed their own blockchain featuring their own token standard called ERC1155. Their main focus is on the in-game asset vertical , so yes , that unique weapon that just dropped will indeed be yours forever as an NFT.
Were you one of the people aimlessly walking around your local parks back in 2016 trying to catch those Pokémon? Or maybe you liked the original Pokémon games back in the day? You might want to check out Axie Infinity – a Pokémon-inspired game with in-game assets as NFTs and a play-to-earn incentive model that is aiming to become much more than just another game.
For collectibles NBA Top Shots is one of the most visible projects out there, allowing fans to purchase digital cards of their favorite players, teams, and memorable moments in the NBA.
Ever played fantasy football with your colleagues or mates? Thanks to Sorare you can now take your team management skills to the crypto space with all the players functioning also as tradable collectibles.
One rather interesting concept that is currently in the making is Community, a project that connects the dots between DAOs and NFTs — in essence providing a framework for NFTs to act as governance tokens.
Ever struggled to find a suitable domain name in the world where even all the half-decent ones are taken? Your domain can also be an NFT and exist on the blockchain with all the benefits that decentralization introduces using services like Unstoppable Domains.
With the above, we have barely scratched the surface on the extent of the NFT universe that also taps into insurance, betting, real-world assets, and more.
Future of NFTs
What does the future hold for the NFTs? The only restriction is your imagination. Could it be that the NFTs end up in space within the next year or so on top of one of Elon’s rockets? Could it be that the notorious Gamestop launches their game rental service using the NFT approach? As Maya Angelou rather brilliantly put it: “Each new hour holds new chances for new beginnings — the horizon leans forward, offering you space to place new steps of change.”