Non-fungible tokens ( NFTs ) are unique , tradable digital assets built on a blockchain . We take a look at the history of this phenomenon , which has become a popular way of selling digital art .

THE PRE-CURSOR

To understand the history of NFTs , we have to go back to 2012 and the creation of a different type of token , Colored Coins . Built on the Bitcoin blockchain , these tokens could be described as the pre-cursor to NFTs as we know them today . Colored Coins could be used to represent any tangible asset – cars , houses , precious metals – but the fundamental limitations of the Bitcoin blockchain essentially meant that Colored Coins had several inherent flaws .

COUNTERPARTY

In 2014 , a new financial platform called Counterparty was launched to expand on the possibilities first explored by Colored Coins . Also built on the Bitcoin blockchain , it offered a number of exciting features including a decentralised asset exchange , tradable user-created currencies and even its own cryptocurrency called XCP .

MEMES

Before long , NFTs moved in a more familiar direction that focused on assets with unique appeal . In 2016 , people began using Counterparty to issue ‘ rare pepes ’ – a type of internet meme that centres around a green frog and has a cult following . When Ethereum gained popularity in 2017 , these rare pepe memes were sold there and even led to the creation of a “ decentralised meme marketplace ” called Peperium where they could be bought and sold .

16 April 2022