Who Started NFTs? (history explained)

When asking “Who started NFTs?” or “What was the first NFT?” many people will shout "CryptoPunks" or maybe “CryptoKitties!” because they were allegedly the first projects that used the official ERC-721 NFT standard (the main standard for NFTs on the Ethereum blockchain) .  But is that true?

Just as the Wright brothers flew an aircraft decades before the FAA released official design regulations defining an aircraft, so have there been NFTs that appeared in various forms long before the ERC-721 standard became official.

In this article, we’re going to dig into who started NFTs and which was the first NFT.

(If you are not too familiar with NFTs, check out our other article explaining NFTs.)

What was the first NFT?

The official NFT standard on the Ethereum blockchain is the ERC-721 standard in addition to a newer standard called ERC-1155. 

But, before these standards existed, there were already projects on various blockchains that were, in some respects, non-fungible. By not demanding that NFTs implement ERC-721 or ERC-1155 to be called NFTs, we open up the horizons of what can be considered an NFT, and which was the first NFT. 

Colored Coins

Back in 2012, Yoni Assia, co-founder and CEO of eToro, laid out a spec for something similar to the concept of “rare coins” on the Bitcoin blockchain.

This idea came to be known as Colored Coins.

This was long before the Ethereum blockchain came out in 2015. 

Assia’s idea was to “mark” a subset of bitcoins in some way, making them “rare” or “colored.” Because every transaction in a blockchain is recorded and can be traced, marking these coins would be permanent. 

Bitcoins are fungible—one bitcoin can be exchanged for any other bitcoin and have the same value—but by marking certain bitcoins, those bitcoins could be assigned additional value, much on the line of rare coins. 

In a sense, those coins would become non-fungible to a degree.

The spec laid out that these “markings” could represent some asset, such as property or shares in a company. 

Although development of Colored Coins was pursued by the Bitcoin community, it never took off.  Nonetheless, we can see that this was an early implementation of an NFT standard.

Counterparty

A close cousin to Colored Coins is a platform called Counterparty, launched in 2014, which used a similar technique to record non-fungible assets on the Bitcoin blockchain.

There were a number of notable projects on Counterparty, including Rare Pepes, which launched in October of 2016. 

Rare Pepes were digital collectible cards minted on the Bitcoin blockchain using the Counterparty platform. The collection had some success in the crypto community but never reached mass adoption. 

However, the Rare Pepes project shows that people were interested in trading “memes” on the blockchain, even back then. 

Counterparty is still active, but not particularly popular.

“First-Ever NFT” sold at Sotheby’s

On May 2, 2014, artist Kevin McCoy and coder Anil Dash minted a digital animation on the Namecoin blockchain.

McCoy’s work is called an NFT because it was a single piece of artwork minted on a blockchain. 

The digital animation was called “Quantum”.

But the Quantum NFT was not sold in its original form, on the Namecoin blockchain—that blockchain is rarely used. The Quantum artwork was re-minted on the Ethereum blockchain in May 2021. 

So Quantum was minted for the first time under ERC-721 in May 2021, on the Ethereum blockchain. That paints a different picture when trying to call it the first-ever NFT. 

Still, the hype around it meant that Quantum sold for a stunning $1.4 million at a Sotheby’s auction.

And, in all fairness, McCoy’s initial creation on the Namecoin blockchain was years ahead of its time. Kudos must be given to him for thinking of storing unique pieces of artwork on a blockchain.

Pre-ERC-721 NFTs

Ethereum revolutionized blockchain technology by making smart contracts part of the protocol. This gave programmers a lot more flexibility in terms of what they could do. 

Etheria

On its website, Etheria dubs itself “the first NFT project.” In light of what we’ve seen above, it seems a lot of projects want to call themselves the first NFT!

Created by Cyrus Adkisson, Etheria is a virtual world where users can “own tiles, farm them for blocks, and build things.” It is only three months younger than Ethereum itself, launched back in 2015. Back then, one ETH was worth less than a dollar, and that’s what it cost to buy a single tile. If someone had bought 100 tiles, their “digital real estate” would be worth about $350,000 today!

Etheria uses a series of smart contracts to keep track of owners and facilitate the trading of tiles. In other words, each tile is not a unique asset on the blockchain, but you could conceptually call it an NFT project.

Curio Cards

Using smart contracts, it is possible to create any number of fungible tokens on the Ethereum blockchain. But what if you simply created a fungible token that had a very limited supply—perhaps even a supply of only one? These limited-supply tokens could be considered collectibles. 

In essence, this was what Curio Cards did when they launched on the Ethereum blockchain on May 9, 2017. 

Curio Cards are tradable/collectible art, minted on Ethereum, and created by Travis Uhrig, Thomas Hunt, and Rhett Creighton.

The project also lays claim to the title of “First Ever NFT on Ethereum.”

Curio Cards didn’t get much traction until they were rediscovered in 2021 during the NFT craze. 

The entire collection, plus one never-before-seen card, was auctioned off by Christie’s on September 1, 2021. Christie’s is the auction house that raked in $69 million for Beeple’s “The First 5000 Days” NFT.

ERC-721—a standard is born

As mentioned earlier, NFTs now generally adhere to the ERC-721 standard.

Ethereum standards are developed by the community, but the official authors of the ERC-721 standard are William Entriken, Dieter Shirley, Jacob Evans, and Nastassia Sachs.

The standard was adopted in June 2018.

When trying to determine which was the first NFT to be minted using the ERC-721 standard, the answer is again ambiguous. 

CryptoPunks

Although CryptoPunks was launched in June 2017, the ERC-721 standard was not finalized until June 2018.  The official Github repo for ERC-721 specifically mentions CryptoPunks as being "Partially ERC-20 compatible".

CryptoPunks were created by Matt Hall and John Watkinson, founders of the New York-based Larva Labs.

The CryptoPunks project, along with Decentraland and various in-game items, were already trying to create “unique” tokens on Ethereum. ERC-721 was an answer to that demand, to standardize how this could be done. 

CryptoPunks are still listed in Etherscan under the ERC-20 standard. The collection served as inspiration for ERC-721, and the original creators hacked ERC-20 to create a truly non-fungible token.

To make CryptoPunks function like modern NFTs, making them tradeable on markets like OpenSea, they are wrapped in an ERC-721 token. 

CryptoKitties

CryptoKitties, launched in November 2017, was another project specifically mentioned on the Github repo page, that served as inspiration for the ERC-721 standard.  

As stated on their website, CryptoKitties is an “Ethereum-based game that allows you to buy, sell, and breed collectible digital cats.”

Unlike CryptoPunks, CryptoKitties is fully compliant with ERC-721 as stated in the standard itself, under the heading Backwards Compatibility:

"CryptoKitties -- Compatible with an earlier version of this standard"

CryptoKitties is owned by Dapper Labs, but was created by the startup company Axiom Zen.

So, was CryptoKitties' claim that it was the first NFT that used the ERC-721 standard correct? And, if it was, does it truly merit that laudatory title of first-ever NFT?

Regardless of whether CryptoKitties or CryptoPunks were truly the first NFTs, it is true that their existence helped inspire the ERC-721 standard which has opened the doors to digital art trading on a whole new scale. 

Want to explore NFT a bit more, check out a website called NFT Timeline.