The History of Non-Fungible Tokens (NFTs) and the Rise of Unique Digital Items

The History of Non-Fungible Tokens (NFTs) and the Rise of Unique Digital Items

In October 2017, a Vancouver-based company called Axiom Zen launched CryptoKitties, a game that allowed users to collect and breed digital cats. This game was the first major application of non-fungible tokens (NFTs) on the Ethereum blockchain. While ERC20 tokens had been widely used for various functions on Ethereum, they were not suitable for creating unique tokens. This led to the invention of ERC721, the standard for NFTs.

Before CryptoKitties, there were other examples of unique digital tokens. The Rare Pepe Meme Directory, for instance, had "experts" who certified the rarity of Pepe memes. This shows that people were already interested in owning and trading unique digital items. Some argue that Colored Coins, which were bitcoins that were part of the "Genesis transaction," were the very first NFTs. They were unique and identifiable from regular bitcoin transactions.

As trading rare Pepe memes on Ethereum gained popularity, two creative technologists, John Watkinson and Matt Hall, decided to create their own NFT project with a twist. They came up with Cryptopunks, unique characters generated on the Ethereum blockchain. Cryptopunks can be described as an ERC721 and ERC20 hybrid, as they do not strictly follow either standard.

The ERC721 standard, also known as the Ethereum Request for Comment, was purpose-built to be the technical standard for non-fungible tokens on the Ethereum blockchain. The main difference between ERC20 and ERC721 is that ERC721 tracks ownership and movements of individual tokens, allowing the chain to recognize non-fungible tokens.

The success of CryptoKitties and the interest from investors led to the spin-off of a company called Dapper Labs, which secured $15 million in funding from top investors like a16z and Google Ventures. This demonstrated the true power and potential of NFTs.

One of the most exciting developments in the NFT space is the collaboration between NFT games and projects to make items interoperable. This means that items or characters from one game can be used or traded in another game. This opens up a whole new world of possibilities for gamers and collectors.

The On Deck Series A Memo: Building Communities and Re-Bundling Education

In the On Deck Series A memo, the importance of community and the decline of organized religion are discussed. People are looking for meaning, identity, and community in modern life, and they are finding it online. On Deck recognizes this need and creates communities that fulfill it.

On Deck uses its program revenue to hire the best talent and invest in creating exceptional experiences for its members. The company understands that reputation and exceptional experiences drive new member demand, enabling further investment in research and development, acquisition, and distribution.

Learning from the shortcomings of the first generation of "ed-tech," On Deck combines community with curriculum. They understand that learning is defined by who you learn with and the perspective you develop among your peers. By building tools and culture that make peer-to-peer education rewarding and personal, On Deck creates a unique learning experience.

On Deck has identified four "macro" waves or tailwinds that are driving its growth. The decline of traditional higher education and the rise of "ed-tech 2.0" create opportunities for virtual curriculum and community. The shift to distributed living and working, accelerated by the COVID-19 pandemic, has made location less important in hiring. Uncertainty is also a catalyst for opportunity, and new norms create new needs.

In conclusion, the history of NFTs and the rise of unique digital items have shown the potential and power of blockchain technology. The success of projects like CryptoKitties and the collaboration between NFT games and projects point to a future where digital ownership and trading are commonplace. On Deck's focus on community and re-bundling education shows how the online world is fulfilling the need for meaning, identity, and community in modern life.

Three actionable pieces of advice for those interested in NFTs and building communities:

1. Understand the unique value proposition of your NFT project: What makes your digital item or collectible special? What sets it apart from other NFTs? Focus on creating something truly unique and valuable to attract collectors and investors.

2. Foster a strong community: Building a thriving community around your NFT project is crucial for its success. Engage with your community, listen to their feedback, and create opportunities for interaction and collaboration. A strong community will help drive demand and create a sense of belonging for your users.

3. Combine education with community: If you are building an educational platform or program, consider the importance of community in the learning process. Create an environment where learners can connect, collaborate, and learn from each other. Peer-to-peer education can enhance the learning experience and foster deeper engagement with the material.

In the long run, the true value of NFTs and community-building lies in the utility they provide to users. By focusing on creating exceptional experiences, fostering strong communities, and combining education with community, you can tap into the full potential of NFTs and build successful projects in this emerging space.