History of Crypto: NFT mania and digital ownership

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In the fast-paced digital world where trends emerge and fade quickly, one exceptional development has gained significant traction: non-fungible tokens (NFTs). The last two years, specifically 2020 and 2021, have witnessed extraordinary growth and widespread adoption of these digital assets. They have transformed our understanding of ownership, art, and even the fundamental nature of the internet itself. In 2021 alone, the NFT market recorded an astounding $25 billion in trading volume – a figure that was almost insignificant just a few years prior.

Black Mirror: Extended Reality has newly introduced “Smile Club” digital collectibles on OpenSea. Here’s a quick rundown.

— nft now (@nftnow) March 12, 2024

For more than ten years, the idea of blockchain technology existed. However, it was the arrival of NFTs that truly captivated artists and collectors alike. NFTs are digital assets with distinct identities, kept secure on a blockchain. This development made it possible to convert digital art, music, videos, and even tweets into valuable possessions by tokenizing them.

NFTs, or non-fungible tokens, have roots reaching back to at least 2012 with the development of the Colored Coins protocol on Bitcoin’s blockchain. This innovation enabled users to create custom tokens representing both digital and tangible assets. Yet, it was only with Ethereum smart contracts and the introduction of the ERC-271 token standard in 2017 that NFTs specifically designed for digital assets came into existence.

In the year 2017, one of the first significant instances of Non-Fungible Tokens (NFTs) garnering widespread popularity was CryptoKitties. Created by Canadian studio Axiom Zen, this game is built on blockchain technology and lets players buy, collect, breed, and sell virtual cats as NFTs. After the success of CryptoKitties, numerous other projects started exploring NFTs for various uses such as digital art, virtual real estate, in-game items, and more. Decentraland and NBA Top Shot gained considerable attention during this time, demonstrating the versatility of NFTs beyond gaming.

Then, between 2020 and 2021, mainstream adoption exploded.

In the year 2021, Non-Fungible Tokens (NFTs) gained significant popularity and recognition in mainstream media with notable sales making news headlines. These included high-value digital artworks being sold for millions of dollars and famous celebrities introducing their personal NFT collections. One prominent example occurred on November 2, 2021, when the renowned writer and director Quentin Tarantino revealed plans to auction off seven uncut scenes from his iconic film “Pulp Fiction” as NFTs on the Secret Network platform.

In March 2021, Christie’s auction house sold Beeple’s digital artwork “Everyday: The First 5,000 Days” for an astonishing $69 million. Newly minted digital artworks by artists like Pak and Grimes also raked in millions during their initial sales. Notably, during this period, popular collections such as Bored Ape Yacht Club and CryptoPunks emerged.

In March 2021, one specific CryptoPunk NFT (#7804) from a collection of 10,000 algorithmically generated images sold for over $7.5 million at an auction, setting a high price point for this digital art piece at the time. Later in October 2021, a rare set of three Bored Ape NFTs were sold together for over $24 million during an auction at Sotheby’s. As these milestones were reached, numerous NFT marketplaces rapidly emerged and grew popular. Notable platforms such as OpenSea, Rarible, Foundation, and Nifty Gateway became go-to destinations for creators to mint and sell their digital assets. OpenSea, in particular, saw significant success with monthly trading volumes exceeding $1 billion by mid-2021, although this figure has since been surpassed by other marketplaces like Blur and OKX NFT.

Tonight, I’m off to bed with a contented sigh. Farewell, Apes. You’ve made these two days of #ApeFestHK simply unforgettable.

— Bored Ape Yacht Club (@BoredApeYC) November 4, 2023

Despite the significant increase in interest and demand for blockchain technology and digital assets like NFTs, there have been growing concerns over their environmental impact due to high energy consumption during transactions. Additionally, there have been debates about the true worth of these digital assets. In fact, between 2022 and 2023, the NFT market experienced a dramatic drop in trading volume, plummeting by almost 100% from its record-breaking high.

Disputes arose regarding the ownership and legitimacy of digital assets like NFTs, emphasizing the importance of establishing clear rules and guidelines. Certain platforms introduced authentication processes to confirm NFT’s originality and shield creators’ rights, while others struggled with determining possession in decentralized environments. After the widespread attention given to the “Pulp Fiction” NFTs, Miramax filed a copyright lawsuit against Quentin Tarantino in September 2022. Similarly, Yuga Labs, presently managing both the BAYC and CryptoPunks collections, encountered legal challenges concerning their digital assets.

Despite the setbacks, the crypto market’s continued upward trend has revived NFT trading volume. In Hong Kong and other regions, new NFT projects are gaining significant attention, with collections selling out rapidly upon release. Innovative platforms like ParaSpace (now Parallel Finance) are creating new solutions for the burgeoning NFT lending sector. Moreover, Ethereum‘s latest token standards, such as ERC-404, aim to make NFTs more accessible by fractionalizing them.

In simple terms, the world of NFTs is constantly changing as new industries explore their potential and innovative platforms emerge. At the same time, there’s a growing focus on making NFT creation and use more environmentally friendly and sustainable, reflecting the long-term commitment to this digital ownership and self-expression trend.

At @icamiami, Punk #305 finds her place among artwork greats, including a Warhol. Through December 20th, she graces the museum’s galleries. Afterward, she becomes a permanent addition to their esteemed collection.

— CryptoPunks (@cryptopunksnfts) December 3, 2022

2024-04-15 17:24

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