NFT has become a burgeoning industry that continues to expand year after year. Sales have risen from $41 million in 2018 to $2.5 billion in the first half of 2021, a 60-fold gain in just three and a half years.
In 1993, Bitcoin pioneer Hal Finney mentioned an early version of NFTs. “Crypto Trading Cards,” he named them. Finney cited defined rarity, exclusive ownership, and provenance in a forum debate.
The concept of NFTs did not get much traction until 2012. Yoni Assia wrote about “hued bitcoins,” which evolved into “colored coins.” Colored Coins, based on the Bitcoin blockchain, generated semi-fungible tokens to represent real-world assets including real estate, commodities, and bonds.
Kevin McCoy and Anil Dash built one of the earliest incarnations of NFT “Quantum” in 2014, which was displayed at the New Museum in New York. Etheria, the first Ethereum-based NFT, launched at Devcon 1 in 2015. It is the first token that was truly non-fungible.
In 2017, two major NFT projects, CryptoPunks and CryptoKitties, were created, albeit they were not generally known at the time. The first NFT house sold through Propy in the same year. This was the first time that the popularity of NFTs matched the crypto-currency market cycle.
NFTs have grown into a burgeoning industry that continues to expand year after year. Sales, for example, have increased 60-fold in three and a half years, from $41 million in 2018 to $2.5 billion in the first half of 2021.
In comparison to 2020, the increase is astounding. According to NonFungible.com’s data on NFTs on Ethereum, total sales in 2020 were $340 million, while sales in 2021 have already crossed $9 billion, a more than 25-fold increase.
While Ethereum remains the most popular NFT, interest in other Tier 1 blockchains is growing because to cheaper transaction costs and faster lock-in durations.
In 2021, Ethereum will account for around 80% of NFT sales volumes, but just 37% of total NFT traders. This is due to the higher transaction costs and higher average valuations of NFTs on Ethereum. Both Flow and Wax have a sizable percentage of overall traders (32 percent and 25%, respectively), but their volume is substantially smaller. Their decreased transaction fees make NFT transactions and high-volume applications like gaming more affordable.