The NFT Origin Story, Starring Digital Cats

A few years ago, it could be difficult to find someone to accept a free NFT; today, the same digital tchotchke might fetch tens of thousands

When Erick Calderon tried to give a colleague a pixelated image of a man in a purple cap as a Secret Santa present in 2018, the colleague didn’t want it. Mr. Calderon’s father got it instead.

This February, his father sold the image for $46,000.

Tied to the image was a nonfungible token, or NFT. Called a CryptoPunk, it is one of 10,000 unique, algorithmically generated digital images created by two software programmers in 2017. The images were designed to be traded on blockchain, a digital ledger that records transactions, and they were originally released to be claimed free by anyone with a blockchain “wallet,” or account.

The rapid evolution of the market for such NFTs, or nonfungible tokens, has pulled the digital assets from near-obscurity to become quickly ingrained in the vernacular. “Saturday Night Live” set aside three minutes of a March episode to explain them in a rap sketch. In the first quarter this year, the total value of NFT sales on the ethereum network, the main blockchain underlying such transactions, surged to $2 billion in the first quarter from $94 million in the previous three-month period, according to data-tracking site NonFungible.com.

“Where we are now, I expected to be in five years,” Mr. Calderon, the 40-year-old founder of Art Blocks, an NFT art project, said. “It’s been this crazy explosion.”

PUBLISHED BY– wsj

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