NFT (non-fungible token) technology is rapidly gaining popularity in the 21st-century digital world. These special, unique cryptographic certificates are written on the blockchain principle and therefore can be placed on popular platforms such as Ethereum. Each non-fungible token is unique, it can be used to establish the rights of owners of a huge variety of digital assets: from some texts, music, and songs, to computer game characters, images, videos, and anything else.
The uniqueness of each particular NFT is simply confirmed - it is one of a kind, and it is simply impossible to replace it. If you exchange bitcoins with a friend, transferring, for example, 0.2 BTC, then each of you will have exactly the same amount in cryptocurrency as before the exchange. With tokens, the situation is radically different – you will get completely different digital assets.
The popularization of tokens is closely connected with the Ethereum platform, although the very initial concepts of certificates were created with Bitcoin. At that time, NFTs had the conditional name "colored coins".
After an innovative platform was created, which was called Counterparty. With its help, users could independently produce Bitcoin-based tokens. These certificates could be used in a variety of games based on blockchain technology. Spells of Genesis is one of the first such places where NFTs have been used. The goal of the game was to collect a deck of cards, and the application of token technology in it took place in the spring of 2015.
For the first time, the technology of this blockchain was applied in the context of non-fungible tokens in 2017, when the famous and popular CryptoPunks collection was created today. The development team submitted their work in September of that year, and it took several months for the set to be “accepted and approved” by the Ethereum community, a process that ended in June 2018.
At the same time, ERC-721 was described - as a standard for tokens, which included their unique identifiers, a way to quickly and securely transfer digital assets, as well as a methodology for adding new data to tokens, including images and videos.
It was followed by an updated version - the ERC-1155 standard, which provided even more functionality and new features, and laid the foundation for dual semi-replaceable certificates. This means that such tokens can carry the characteristics of both replaceable tokens and those that are impossible to replace. Both of them are controlled using the same smart contract. The practice has shown that ERC-1155 is very well used in games built on blockchain technology, when it becomes necessary to duplicate the resources used in the scenario: weapons, player skins, etc.
A little later, numerous PFP projects were widely developed, which can be described as thriving, although not always stable markets. The number of games using NFTs has been growing exponentially. This led to the fact that developers had to switch to using the 2nd level blockchains, as well as separate blockchains tied to the main one, which were called sidechains.
Digital art tokens can now sell for millions or even tens of millions of dollars. But all this luxury would not have become a reality without the efforts of early Ethereum-based NFT developers.
Although CryptoPunks has been around for quite a while, it still holds the interest of owners and potential investors. Examples of the largest transactions concluded in recent years show that copies from this collection can cost millions of dollars. So CryptoPunk #7523 humanoid was sold in June 2021 for almost 12 million!
Another valuable collection of NFTs is the Bored Ape Yacht Club (BAYC). It includes 10,000 tokens, each of which is linked to an image of a stylized cartoon monkey. The ecosystem of this collection was expanded recently to include the PFP collections, as well as ApeCoin, the utility token for BAYC.
ENS was created by the Ethereum Foundation, a non-profit organization, but has now received the status of an independent project. ENS has the task of converting Ethereum alphanumeric identifiers into human-readable strings, each of which ends in .eth. It is actively used for cryptocurrency wallets.
Art Blocks is a resource for blockchain artists. The developers are positioning it as the first NFT platform that creates “art on demand”. The work of Art Blocks can be described as an effort to bring to life innovative works of contemporary art created in a generative way. The platform brings together collectors, creators, and blockchain technology to produce ever-new masterpieces that create vivid impressions and emotions.
Some collections created on Art Blocks, such as Ringers, and Squiggles, have been valued and sold for millions of dollars. And among their new owners, there are such celebrities as Snoop Dogg.
Axie Infinity is yet another blockchain game. It was created and hosted on the Ethereum sidechain, which is called Ronin. This decision was taken to offload the main chain, which was observed at that time due to the launch of CryptoKitties, another mega-popular game implemented as a decentralized application.
