The Dawn of the NFT on the Ethereum Blockchain and where they are going next

Early concept NFTs started on the BTC Blockchain with the dawn of “Coloured Coins” (https://docs.google.com/document/d/1AnkP_cVZTCMLIzw4DvsW6M8Q2JC0lIzrTLuoWu2z1BE/edit#). If you take a moment to look at the white paper’s contributors you will see the familiar name of Vitalik Buterin. One can probably be safe in the assumption that he saw the limitations of the BTC blockchain and started on a mission to revamp the technology and come up with a more dynamic system that has led us to the devs heaven of what is now the Ethereum Network. 

The movement started in earnest with Cryptopunks (https://larvalabs.com/cryptopunks). The name was a homage to Cypherpunks in the 1990s. The cryptographers who did the groundwork for our friend(s) Satoshi Nakamoto with his release of the Bitcoin Genesis Block in 2009. Thus releasing the beast that is Bitcoin into our lives and ultimately to international stardom. The mission was a simple one. To create a limited edition (runs of 10,000) and unique pixel art pieces. Initially, the creator’s John Watkinson and Matt Hall gifted one of their new creations to anyone with an ETH wallet. The new creations were taken up with lightning speed and a booming secondary market started to emerge. The ERC721 protocol had not yet been developed so the system was still reliant upon the ERC20 token standard.

At the time of writing the sale of the most expensive Cryptopunk had just happened a little over 16 hours ago at 36.99 ETH (Circa 22k US$). Prior to this Punk #6847 sold for 100 ETH,  approximately 21k US$, and #8348 for 85 ETH ( approx18k US$). Please see the link below for a rather nifty little table that will show all the CryptoPunk sales and exchanges.

https://nonfungible.com/market/history/cryptopunks?filter=saleType%3D&length=10&sort=blockTimestamp%3Ddesc&start=0

Never resting on their laurels, the fine people at EIP (Ethereum Improvement Proposals) set out to launch another groundbreaking ERC (Ethereum Request for Comment) standard. In late 2017 the ERC721 protocol was released. It is unique in that it is a token standard that allows for the concept of Non Fungibility i.e It has no inert value. Which unlike the CryptoPunks on the ERC20 and Coloured Coins on BTC standard had to include a nominal or peppercorn value to be able to interact with the network.

On 18th August 2017 Decentraland (https://decentraland.org/ ) launched their ICO and raised 26m US$ in less than 30 seconds in partnership with DistrictOx (https://district0x.io/ ), Aragon (https://aragon.one/ ), and imToken (https://token.im/ ). Decentraland is an ETH based VR platform where online communities are able to create and monetize virtual assets within the Decentarland world map. The native currency is MANA (https://coinmarketcap.com/currencies/decentraland/ ) with which users can buy unoccupied parcels of land (10m2). Players can then develop virtual properties to increase the value of the plot. The ETH blockchain then records the activity and maintains a record of ownership, content and other information

Hot on the heels of this was the smash hit CryptoKitties. Where the virtual felines, each with a distinct 256-bit genome which translates to DNA traits (or Catributes), can be bought, sold or sired (bred) to create new Kitties with unique features handed down from the parents. Initially launched by Axiom Zen (https://www.axiomzen.co/) after a hackathon at ETH Waterloo on 19th October 2017 where the 1st CryptoKitty “Genesis” was created. The creation, less than 2 months later sold for a whopping 246.9255 ETH (117,712 US$).

On 20th March 2018, after a successful Venture Capital raise of 12m US$, Axiom Zen put the project under the control of the newly created Dapper Labs (https://www.dapperlabs.com/). Since then the project has gone from strength to strength with Kitties sometimes trading hands for 10s of thousands of US$. To date the most expensive Kitty ever was #896775, or “Dragon” as she is affectionately named, sold for a cool 600 ETH. At the time worth about 117k US$, but after the recent flurry of activity in the cryptosphere and the associated appreciation would now have a fiat value of 354k US$. The popularity of CryptoKitties really started in the 2017 crypto bull run, where so many fans were buying, selling and siring out their creations at such a rate that the whole ETH blockchain was struggling under the strain of transactional activity. This was part of the reason that ETH2 (https://ethereum.org/en/eth2/ ) had to start being considered.

If you like the idea of CryptoKitties but cats aren’t necessarily your thing, you may want to check out Alpaca City (https://alpaca.city/ ). Where the Alpacas are a series of digital collectibles build on the ETH network. Like CryptoKitties each Alpaca has its own unique characteristics determining its qualities, thus making them highly collectible. One starts by adopting an Alpaca (or two for nature to take its course) and breeding them. Where the fun really starts is that each animal has a set of three secret genes, which can sometimes make the offspring completely unique from its parents. The Alpacas also generate ALPA tokens (https://www.coingecko.com/en/coins/alpaca ) for their custodians. The volume of ALPA created depends on the “Energy” levels in the Alpacas in the owner’s control. Each Alpaca has a different energy level, with a common theme being that “Energy” levels increase with each new generation. Ergo the higher the combined “Energy” level the more tokens are created.

Since these early NFT Pioneers there have been many fine projects put out and many in the pipeline still to come. The medium is fast expanding to incorporate many different angles. We have a piece in the pipeline about the future of Music on the blockchain. NFT Zine spoke to Vandal at DAO Records (https://www.daorecords.org/ ) about his team’s efforts to ensure fair distribution of material and revenue to new and established artists alike. There are also interesting projects based around the verification of real-life assets such as NFGems (https://nfgems.com/ ) with whom we have an upcoming article. Do make sure that you watch this space and if you have a project that you would like to discuss please email us using the contact details on the site. Alternatively, get us on Twitter (https://twitter.com/NFTbench ) @NFTBench.

Written by : Benny Steele

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5 thoughts on “The Dawn of the NFT on the Ethereum Blockchain and where they are going next”

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