Here are recaps of what we discussed in our preceding post
Non-fungible tokens are extremely powerful kind of tokens that allow for a flexible way to represent non-fungible assets on a blockchain.
They are unique. Non-fungible tokens contain within their code information that describes the properties of each token. That makes each token different from others. A piece of digital art might have coded information about individual pixels, while NFT in-game items might contain details that allow the game client to understand which item the player owns and its attributes.
Traceable: Each NFT has a record of transactions on-chain, from when it was created, including every time it changed hands. This means each token can be verifiably authentic, and not a counterfeit – obviously a very important thing for owners and prospective buyers!
Indivisible: NFTs mostly cannot be transacted as fractions of a whole. Just like how one cannot purchase half of a concert ticket or trading card, non-fungible tokens cannot be split into smaller denominations
Programmability: Like all traditional digital assets and tokens built on smart contract blockchains, NFTs are fully programmable. Some have breeding mechanics coded directly into their tokens. Even more functionality is possible. In other words, NFTs combine the best traits of decentralized blockchain technology with non-fungible assets. Unlike regular digital assets that are issued and regulated by centralized entities, which can be taken from you at any time, it is possible to truly own and control your own NFTs.
What we enumerated above can also serve as some of the benefits of NFT. Let us immediately move into the the Evolution of NFT
EVOLUTION OF NFT
Before cryptocurrencies emerged, We have had non-fungible digital assets right from the dawn of the internet. The truth is that NFT did not start with blockchain as some people posit. Domain names, online event tickets, in-game items, even handles on social networks like Twitter or Facebook, are all non-fungible digital assets; they just vary in their tradeability, liquidity, and interoperability. And many of them are incredibly valuable
In one of the projects I am in, they have what they call “Refsite,” where one can sell his fully valid referral. You drop evidences that show that your referral is fully valid and you proceed to give the amount you want to sell your referral. An interested buyer pays the listed price using the token of the project, and the referral is transfered to him or her.
This is very picturesque of how NFT can be transacted in an open market. You can see that here, a referral is an NFT and valuable one at that. It goes a long way to tell us that NFT is not limited to smart contract. Smart Contract and Defi only simplified it.
Before standards were created in blockchain, there were internet standards like TCP/IP, HTTP, HTML/CSS and REST and also content standards like File Formats, JSON and HTML/CSS
The first NFT to be built on blockchain is the introduction of colored coins built on the bitcoin network in 2012. Colored coins were first formulated in a blog post by Yoni Assia in March 2012. These were very small units of Bitcoin which were “colored” with specific attributes coded into metadata using Bitcoin’s scripting language. In this way, units as small as one satoshi (0.00000001 BTC) could represent any asset you can imagine, be it a dollar, shares in a company, a house, or digital collectibles.
Apart from the fact that the management of bitcoin and even the structure of bitcoin didn’t support Colored coins, its major undoing is in the fact that it’s not strictly for the creation of NFT. It allowed for the creation of any asset. Hence, the creation of Ethereum’s ERC-20 token standard in 2015 took away much of the purpose of colored coins, since ERC-20 are much more flexible. But the truth is that it might not be out of place if one sees that erc20 borrowed its idea from Colored Bitcoin.
However, erc20 only took care of the fungible aspect of Colored Bitcoin and left the non fungible aspect to Counterparty. With this, Counterparty took over colored coins’ NFT function. This totally removed Colored Coins out of the crypto space.
Counterparty was founded in 2014, building on the idea of colored coins to issue non-fungible and semi-fungible tokens. Counterparty’s founders understood that Bitcoin did not support the features that would allow for the creation of a robust asset creation and trading platform.
In 2015, the mobile game Spells of Genesis became the first to issue in-game assets onto any blockchain, doing so through Counterparty. The platform saw further success in 2016 as the popular trading card game Force of Will issued cards on Counterparty. At the time, Force of Will was the fourth most popular trading card game in North America, behind household names such as Magic: The Gathering, Pokémon, and Yu-Gi-Oh.
Although blockchain-based in-game assets would continue to see use, the biggest innovation came in 2016 when people began issuing limited edition Rare Pepes on Counterparty, based on the popular and at times controversial meme character Pepe the Frog.
Various frameworks have been created to facilitate the issuance of NFTs. The most prominent of these is ERC-721, which is a standard for the issuance and trading of non-fungible assets on the Ethereum blockchain created in 2017. A more recent, improved standard is ERC-1155, which enables a single contract to contain both fungible and non-fungible tokens.
The first NFT collectibles on erc721 were Cryptopunks in 2017, followed soon thereafter by the Cryptokitties in the same year.
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 NFTs saw a resurgence.
Inbetween 2018 and 2020, when we had a downturn in NFT’s progression, there are few NFT projects that doggedly strove for mainstream adoption. Among these projects is Terra Virtua. Terra Virtua persevered during this time not only to introduce NFT but also to bridge the digital world from the real world. It could be said of them that they are thriving now.
What makes the difference between the NFT introduced before 2020 and the one that came in the ending of 2020 and still progresses now is what this article wants to iron out. Before we do that, we shall first of all see the benefits as well as the roadblocks of NFT in our subsequent post(s).