Who Invented NFTs?: A Brief History of Non-Fungible Tokens

As mentioned, the story took off with colored coins, which were created to represent and manage the ownership of real-world assets on the blockchain. They differ from bitcoin (BTC) because of the “non-fungible” element that gives them a unique utility.

Demonstrating a giant leap in bitcoin’s capabilities, colored coins are composed of tiny fractions of bitcoin, which can be as minor as one satoshi. Use cases of colored coins, such as assets, coupons, or uses as digital collectibles, membership, shares, and access tokens, helped people realize the potential of blockchain for issuing assets.

However, bitcoin was never intended to be used as a database for tokens, which meant that colored coins remained only at the concept stage. However, development started a series of experiments that culminated in NFT. The first “quantum” of the NFTs, as mentioned earlier, an octagon-shaped animation. The advent of Ethereum provided the necessary platform for NFTs to flourish.

A major project of this period that enabled the development of digital assets was a counterparty platform built on bitcoin. “Rare Pepes” NFTs were issued on Counterparty, ushering in the use case of NFTs as artwork. “Genesis Spells,” built on Ethereum, was another big NFT project after The Counterparty.