The first NFT sold for four dollars; seven years later one fetched $69 million
In May 2014 Kevin McCoy registered a short video on the Namecoin blockchain and sold it to Anil Dash for $4 at a New York museum talk. That token, Quantum, launched a market that grew to US$17 billion of trades in 2021 and then collapsed almost as quickly.
A non-fungible token is a unique entry on a blockchain used to certify who owns something, usually a pointer to a digital file such as an image or clip. Unlike cryptocurrency coins, which are interchangeable, each token is distinct and cannot be split. What a buyer actually gets is murkier. Holding the token rarely conveys copyright, does nothing to stop others copying the file, and the link it contains can break over time. The legal scholar Rebecca Tushnet noted that buyers acquire whatever the art world believes they have acquired.
Early experiments sat quietly for years. Etheria, shown at Ethereum's first developer conference in London in October 2015, offered 457 hexagonal tiles that mostly went unsold until March 13, 2021, when all of them changed hands within 24 hours for a combined US$1.4 million. CryptoPunks, a set of 10,000 pixelated characters, appeared in June 2017. The game CryptoKitties followed that November and was popular enough to swamp Ethereum's capacity.
The name came out of a committee. While drafting a standard called ERC-721, published in 2018 under lead author William Entriken, contributors weighed words such as deed, title and ticket before voting for NFT. In 2021 the magazine ArtReview put ERC-721 top of its Power 100 list, and the digital artist Beeple got $69 million at Christie's for his composite Everydays: the First 5000 Days, the first time a legacy auction house handled such a token. Pak's Merge went even higher, at US$91.8 million.
The boom was short. By May 2022 The Wall Street Journal reported daily sales down 92% from the previous September, and a September 2023 report from the gambling site dappGambl claimed 95% of tokens were worthless. Stunts marked the frenzy too: in March 2021 a company bought a Banksy screen print for $95,000, filmed it being burned and sold the video as a token.
Source: Non-fungible token
