The Brief History of NFTs
While they’re currently being talked about more, you may be surprised to hear that non-fungible tokens or NFTs have been around for quite some time. Although you may be aware of their presence, do you know what a non-fungible token is?
The best way of describing it is to understand what a fungible asset is first. Money is a perfect example of this; it’s something that has interchangeable units. If you took a £5 note and exchanged it for five £1 coins, they’ve got the same value. Something non-fungible cannot be interchanged with something else, so take a piece of art; there’s only one original it cannot be replicated. NFTs are one-of-a-kind digital assets that can be bought and sold but have no tangible form of their own. The easiest way to consider them is to think of them as certificates of ownership for a physical or digital asset.
Recently they have been in the news as a new movie called A Wing and a Prayer will be funded by NFTs, according to The Guardian. Also in sport, one of the most famous footballers in the world, Lionel Messi, was paid his signing on fee from his new club Paris St Germain in non-fungible tokens. However, this ‘new’ method of a digital transaction has been around since 2014, when Counterparty, one of the early Bitcoin platforms, provided a way for users to create their tradable currencies. It was used for meme trading and more, counterfeiting was almost impossible, and users soon got excited at the possibilities.
Since then there have been many notable milestones for NFTs and we’ve compiled a list of some of them below.
One of the earliest examples of the NFT was the creation of the Cryptopunks. They were 10,000 unique characters created on the Ethereum blockchain, with no two the same, and they were all quickly purchased. This project was the start of crypto art and led the way for where things are in the current day. The progression from Cryptopunks was Cryptokitties, where the characters, which are based on felines, introduced a game based around the little furry friends. Like the Punks before them, the kitties could be 100% owned by their purchaser and could not be replicated.
As we’ve mentioned already, NFTs have made their way into the sport, and now fans are able to connect with their clubs with fan tokens. These tokens, where value rises and falls with demand, allow fans to use them towards gaining access to exclusive events, VIP tours and allow them a voice in specific low-level club discussions. It’s primarily been something that was initially only taken on by some of Europe’s top football clubs. Recently, Socios fan tokens moved into the lucrative US market with a new deal being signed with the New England Patriots in the NFL. The NBA has got involved too, as over 20 NBA franchises, including the Philadelphia 76ers, were the first to sign up as mentioned in this report on Boardroom. Whilst Europe has been the home and breeding ground for fan token popularity, the US is the market that could lead to global exposure.
Rock band Kings of Leon released their latest album back in March via an NFT, with fans purchasing a non-fungible token getting rights to the new tracks from musicians from Nashville. The two-tiered purchasing option also gave the fans the opportunity to pay for a very limited NFT, giving them access to every one of their gigs for life. They raised over $2million from the sale, so expect this to be something we see in the future from a greater number of artists and bands.
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