We all know how crazy NFTs have gotten over the past couple of months. But have you ever thought about how it all started? The genesis moment?
NFTs were a concept that was dabbled with back in 2012 or so but was never implemented because the Bitcoin blockchain was not capable of smart contracts. So arguably, the very first truly ‘commercial’ example of this is believed by many to be the CryptoPunks project.
CryptoPunks was created by Larva Labs’ Matt Hall and John Watkinson in June 2017. Originally, Larva Labs released 10,000 Punks with 9000 of them free to anyone who had an Ethereum wallet (Larva kept 1,000 for themselves). Each of the punks had a random number of attributes and was procedurally generated on the Ethereum chain. Moreover, no two characters are the same, with some aesthetic features rarer than others. For example a 60/40% male/female ratio with 7% wearing lipstick, and 3% having facial scruff. The Larva Lab team aimed to replicate the 1970’s London punk and the Cyberpunk movement. As media began covering this (e.g. one of which was this post) the traction began to mount.
The trend continued which was soon followed by the release of Cryptokitties in October of 2017. There was more advancement in this collection – enthusiasts were able to raise, breed, and trade virtual cats using the concept of genomes. The resulting combination of a breeding pair gave a new kitten that was completely unique. This was only possible because of Ethereum’s new token standard ERC 721 (late 2017) which enabled classes of assets and not just types of assets. For example, you can have 0.5 ETH but not 0.5 Cryptokittens, and it’s a unique ID for each asset in that class – i.e. non-fungible. Today, many of the big names including Bored Apes, use this same standard.
The phenomenon gathered pace rapidly and by Dec 2017, constituted 12% of all Ethereum transactions. This raised considerable awareness about NFTs, which led to big-name VC firms a16z and USV becoming investors. Of course, popularity wasn’t perpetual and subsequent volumes decayed, but both Cryptokitties and Cryptopunks were poised to make a glorious comeback during the 2021 NFT craze.
Looking at the image above, you can see the increase in interest in projects during the 2017s, but right afterwards, NFT went into a period of hibernation between 2018 and 2019 as the broader crypto market suffered a prolonged ‘crypto winter’. But similarly, when Bitcoin started its unstoppable rally in January 2021, the market began foraying into NFTs, which was still more or less a fringe hobby, and by March 2021, the hype was in full swing. The two asset classes have somewhat decoupled in trend since then, but are still explicitly linked as we head into the metaverse age. Stay tuned!
References
CryptoPunks, CryptoCats and CryptoKitties: How They Started and How They’re Going
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