When did NFTs start?
As a reminder, NFTs or Non-fungible tokens, or at least the meaning of “non-fungible” means:
“That it’s unique and can’t be replaced with something else. For example, a bitcoin is fungible — trade one for another bitcoin, and you’ll have the same thing. A one-of-a-kind trading card, however, is non-fungible. If you traded it for a different card, you’d have something completely different.”
“NFTs can really be anything digital (such as drawings, music, your brain downloaded and turned into an AI), but a lot of the current excitement is around using the tech to sell digital art.”
Now that we have an understanding of what NFTs are, we can start focusing on the origin of this technology. On the 7th of August 2015, the first NFT was born. Its name was “Terra Nullius”, and it was part of the Ethereum blockchain. It turns out that the NFT had one particularity, it made users able to “claim a stake”. Essentially this means that you were able to insert a short message to personalize the NFT.
Then, a few months later, Etheria v1.1 also named Blockplots was created. Other than being one of the first NFTs to be introduced to the world, Etheria had a specific trait, the buyers were able to buy “tiles” from a 457-piece map. This concept please many NFT creators, and similar concepts were created.
One of them was named “PixelMap”, created at the end of 2016, it allowed users to purchase one or more images from a blockchain with 3,970 pieces available. PixelMap was some sort of combination of Etheria and Terra Nullius, as it not only had a limited number of buys but was also individually customizable.
The idea of owning individual digital pieces was approved by other creators and therefore decided to diversify the asset. In 2017, Ethereum Name Service was invented, and granted the possibility to users to purchase one of their decentralized domain names. As time went by, you were able to own collectible cards thanks to Curio Cards, or even one of 400 plots on the moon with Lunar Token.
All in all, NFTs have existed since 2015 and have diversified in terms of the content of the purchased asset. Thanks to the graph below, you can visualize that NFTs have just recently become a trend.
Yet as you know now, NFTs have been around for 7 years now, so why is it now so popular?
NFT and its on-growing popularity.
As no media seem to understand the proper reason for its popularity, economic and technological factors, that made sense for NFTs to have such a prosperous run. NFTs’ ability to be purchased by cryptocurrencies is therefore greatly interlinked with Bitcoin’s recent bull run. As you may or may not know, at the end of 2020, reached a record-breaking all-time high of $68,0000. One can think that bitcoins’ popularity has therefore led to crypto-purchasable assets such as NFTs.
One of the historically notorious NFTs back in late 2017 was CryptoKitties. It turns out that they made a comeback today with the “NBA Top Shot”. The American basketball league and CryptoKitties created NFTs of the best moments of the season. As a result, the duo became the number one source of volume on the NFT market. NBA being having such popularity; one can imagine that the cooperation became a catalyzer for the technology.
Finally, the pandemic has had a major influence on the international market, particularly on the collectibles market. The collectibles market value grew to $522b (irei.com, 2021), explaining one of the reasons why NFTs became so popular.
The different sorts of NFTs
To understand if NFTs are investable today, it is important to understand the different types that exist today.
Today the main types of NFTS on the market are:
– Music: Allowing musicians to create a smaller audience of their biggest fans.
– Art: This allows digital art lovers to have their unique pieces.
– Access: Tickets that allow you to have access to digital content.
– Redeemable: A token that authorizes you to claim a physical good.
– Game objects: Think of skins for example (the color of your character in a video game), when purchased by the player, the company still has ownership. With NFTs, the player would have full ownership of the object and be able to benefit from its interoperability.
– Identity: Users will have the possibility to benefit from NFTs interoperability and the blockchain’s secured system.
– Web 2.0 Databases: Keeping personal or even professional information decentralized will benefit the user in the way that they will be able to secure them, but also transfer their data to a decentralized system to a centralized one.
Should you invest in NFTs today?
It depends on the sort of investor that you are. If you are a risk-taking capitalist, in that case, trending cryptos such as the BAYC (Bored Ape Yacht Club) NFTs. This company has created many digital arts selling for millions of dollars. One of them, the “Bored Ape #3749”, sold for 740 ETH, the equivalent of around $2.9 million. Many celebrities are contentiously investing in them today, making the prices reach extremely high summits. If you are a specialist in the Art market, in that case, Art NFTs might be for you.
Of course, if you are purchasing the NFTs to support creators, or just because you want to have your “hands” on one, then sure, go for it!
On the other hand, the more “practicable” aspect of NFTs can become a great way to protect your data but also interoperate your credentials to different devices. This feature is becoming an interest for more and more companies, thus you might want to hold on to your wallet, as future competition in the industry will probably rise the buyers’ bargaining power.