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The history of Ethereum

NOT the history of NFTs

what are milestones in Ethereum

In 2017, blockchain game CrypoKitties featuring digital cats artwork as NFTs launched and garnered wide mainstream press coverage around it and Ethereum.

In 2017, the blockchain game CryptoKitties, featuring digital cat artwork as NFTs, was launched on the Ethereum network.[1] It gained notable mainstream media attention, spotlighting Ethereum significantly in the process.[2] The game was considered the most popular smart contract in use on the network[3] but also highlighted concerns over Ethereum's scalability due the game's substantial consumption of network capacity.[4]

In January 2018, a community-driven paper (an EIP, "Ethereum Improvement Proposal") under the leadership of civic hacker and lead author William Entriken was published, called ERC-721: Non-Fungible Token Standard.[5] It introduced ERC-721, the first official NFT standard on Ethereum.[6] This standardization was a milestone for Ethereum in pioneering the foundation of the multi-billion dollar digital collectibles eco-system.[7]

Ethereum using ERC-721 served as the pioneering foundation for the multi-billion dollar digital collectibles eco-system.

is regarded is pioneering the NFT concept which Ethereum Through the NFT standard ERC-721, Ethereum is regarded as pioneering the NFT concept that evolved into a multi-billion dollar eco-system.

first mainstream dApp . brought significant attention to Ethereum and cryptocurrencies

and by consuming significant usage capacity it raised notable concerns regarding Ethereum's scalability.

CryptoKitties on Ethereum helped attract attention to

introduced scalability issues

became one of the first dApps to become mainstream / receive mainstream press coverage.

A community-driven paper under the leadership of civic hacker and solutions architect William Entriken

ERC-721 was established in 2018 which introduced the NFT concept and formal nomenclature which had not been in use prior and Ethereum began pioneering the digital collectibles eco-system.

first popular example of nfts. congested network

https://www.nature.com/articles/s41598-021-00053-8#ref-CR6

the most popular smart contract on the network

https://techcrunch.com/2017/12/03/people-have-spent-over-1m-buying-virtual-cats-on-the-ethereum-blockchain/

Ethereum blockchain was pioneered in implementing NFTs. ERC-721 token was the first standard token accepted in the Ethereum network. With the increase in popularity of the NFTs, developers started developing and enhancing NFTs standards in different blockchains like EOS, Algorand, and Tezos. This section provides a review of implemented NFTs standards on the mentioned blockchains.

ERC-721 was the first Standard for NFTs developed in Ethereum,

https://www.nature.com/articles/s41598-022-05920-6

Continued development and milestones (2017–present)

[edit]

In March 2017, various blockchain startups, research groups, and Fortune 500 companies announced the creation of the Enterprise Ethereum Alliance (EEA) with 30 founding members. By May 2017, the nonprofit organization had 116 enterprise members, including ConsenSys, CME Group, Cornell University's research group, Toyota Research Institute, Samsung SDS, Microsoft, Intel, J. P. Morgan, Cooley LLP, Merck KGaA, DTCC, Deloitte, Accenture, Banco Santander, BNY Mellon, ING, and National Bank of Canada. By July 2017, there were over 150 members in the alliance, including MasterCard, Cisco Systems, Sberbank, and Scotiabank.

NFTs, CryptoKitties and ERC-721

[edit]

In 2017, blockchain game CryptoKitties launched and garnered wide mainstream attention to Ethereum. It is regarded as the first mainstream decentralized application (dApp).

By January 2018, ether was the second-largest cryptocurrency in terms of market capitalization, behind bitcoin. As of 2021, it maintained that relative position.

In 2019, Ethereum Foundation employee Virgil Griffith was arrested by the US government for presenting at a blockchain conference in North Korea. He would later plead guilty to one count of conspiring to violate the International Emergency Economic Powers Act in 2021.

In March 2021, Visa Inc. announced that it began settling stablecoin transactions using Ethereum. In April 2021, JP Morgan Chase, UBS, and MasterCard announced that they were investing US$65 million into ConsenSys, a software development firm that builds Ethereum-related infrastructure.

There were two network upgrades in 2021. The first was "Berlin", implemented on 14 April 2021. The second was "London", which took effect on 5 August. The London upgrade included Ethereum Improvement Proposal ("EIP") 1559, a mechanism for reducing transaction fee volatility. The mechanism causes a portion of the ether paid in transaction fees for each block to be destroyed rather than given to the block proposer, reducing the inflation rate of ether and potentially resulting in periods of deflation.

On 27 August 2021, the blockchain experienced a brief fork that was the result of clients running different incompatible software versions.

Non-fungible tokens (NFTs)[edit]

[edit]
Main article: Non-fungible token

Ethereum also allows for the creation of unique and indivisible tokens, called non-fungible tokens (NFTs). Since tokens of this type are unique, they have been used to represent such things as collectibles, digital art, sports memorabilia, virtual real estate, and items within games. ERC-721 is the first official NFT standard for Ethereum and was followed up by ERC-1155 which introduced semi-fungibility, both are widely used,[8] though some fully fungible tokens using ERC-20 have been used for NFTs such as CryptoPunks.[9]

The first NFT project, Etheria, a 3D map of tradable and customizable hexagonal tiles, was deployed to the network in October 2015 and demonstrated live at DEVCON1 in November of that year. In 2021, Christie's sold a digital image with an NFT by Beeple for US$69.3 million, making him the third-most-valuable living artist in terms of auction prices at the time, although observers have noted that both the buyer and seller had a vested interest in driving demand for the artist's work.

Lead

[edit]

A non-fungible token (NFT) is a unique digital identifier that is recorded on a blockchain, and is used to certify ownership and authenticity. It cannot be copied, substituted, or subdivided. The ownership of an NFT is recorded in the blockchain and can be transferred by the owner, allowing NFTs to be sold and traded. NFTs can be created by anybody, and require few or no coding skills to create. NFTs typically contain references to digital files such as artworks, photos, videos, and audio. Because NFTs are uniquely identifiable, they differ from cryptocurrencies, which are fungible.

Proponents claim that NFTs provide a public certificate of authenticity or proof of ownership, but the legal rights conveyed by an NFT can be uncertain. The ownership of an NFT as defined by the blockchain has no inherent legal meaning and does not necessarily grant copyright, intellectual property rights, or other legal rights over its associated digital file. An NFT does not restrict the sharing or copying of its associated digital file and does not prevent the creation of NFTs that reference identical files.

The trading of NFTs in 2021 increased to $17 billion over just $82 million in the previous year. NFTs have been used as speculative investments and they have drawn criticism for the energy cost and carbon footprint associated with some types of blockchain, as well as their use in art scams. The NFT market has also been compared to an economic bubble or a Ponzi scheme. During their peak, the three biggest NFT platforms were Ethereum, Solana, and Cardano. In 2022, the NFT market collapsed; a May 2022 estimate was that the number of sales was down over 90% compared to 2021. By September 2023, one report claimed that over 95% of NFT collections had zero monetary value.

Merriam dictionary's definition about it not being subdivided is incorrect. according to high quality sources, "fractionalization" can result in NFTs being subdivided, with ownthedoge as the most famous example.

fractionalization [10][11][12][13]

History

[edit]

Early Projects

[edit]

The first known "NFT", Quantum, was created by Kevin McCoy and Anil Dash in May 2014. It consists of a video clip made by McCoy's wife, Jennifer. McCoy registered the video on the Namecoin blockchain and sold it to Dash for $4, during a live presentation for the Seven on Seven conferences at the New Museum in New York City. McCoy and Dash referred to the technology as "monetized graphics". This explicitly linked a non-fungible, tradable blockchain marker to a work of art, via on-chain metadata (enabled by Namecoin).

In October 2015, the first NFT project, Etheria, was launched and demonstrated at DEVCON 1 in London, Ethereum's first developer conference, three months after the launch of the Ethereum blockchain. Most of Etheria's 457 purchasable and tradable hexagonal tiles went unsold for more than five years until March 13, 2021, when renewed interest in NFTs sparked a buying frenzy. Within 24 hours, all tiles of the current version and a prior version, each hardcoded to 1 ETH (US$0.43 at the time of launch), were sold for a total of US$1.4 million.

In 2016, Rare Pepes a "semi-fungible" NFT project centered around the Pepe the Frog meme involving a collective of artists contributing their works into a curated directory, emerged on Bitcoin through a protocol known as Counterparty (which had been created in 2014 and used to create other assets).[14]

In 2017, several NFT projects emerged on Ethereum that utilized a "fungible" token standard known as ERC-20. Curio Cards in May of that year is credited with being Ethereum's first art NFT project using the fungible standard and features artwork in the shape of a card among a variety of image types including satirized corporate logos[15] The generative art project of 10,000 pixelated characters known as CryptoPunks emerged soon after in June and would later establish itself as one of the most commercially successful NFT projects.[16] In December, a clipart based collection featuring images of rocks called EtherRock emerged.[17]

in November 2017, the widely acclaimed blockchain game on Ethereum known as CryptoKitties launched and is credited with pioneering what is considered to be the very first bona fide non-fungible token standard, known as ERC-721.[18] The game was utilizing a beta version of the ERC-721 standard that differed from the final version that was published later in 2018.[19]

ERC-721: Non-Fungible Token Standard

[edit]

While experiments around non-fungibility have existed on blockchains since as early as 2012 with Colored Coins on Bitcoin,[20] a community-driven paper called ERC-721: Non-Fungible Token Standard was published in 2018 under the initiative of lead author and civic hacker William Entriken[21] and is recognized as pioneering the foundation for NFTs and enabling the growth of the wider eco-system.[22] It introduced the first instance of formalization and defining of the term Non-Fungible Token in blockchain nomenclature "NFT" by establishing a standard for smart contracts known as "ERC-721" whose tokens would have unique attributes and ownership details, ensuring no two tokens are alike.[23] The creation of derivative standards followed from its influence on Ethereum (like ERC-1155 enabling semi-fungibility) and other blockchains.[24] Its versatility enabled the pioneering of numerous use cases, including digital artwork, deeds to physical items, real estate (including virtual), access passes, and game assets.[25] Ultimately, the emergence of ERC-721 is recognized for having fundamentally changed the landscape of digital verification, authentication, and ownership.[26]

Origins of the term "NFT" and its popularity

[edit]

The term NFT, prior to the blockchain game CryptoKitties' adoption of ERC-721, is not known to have been used for earlier projects.[27] Through discussion among the draft's stakeholders, the word deed was given consideration among other alternatives including distinguishable asset, title, token, asset, equity, ticket.[28] Ultimately, a vote was held during the paper's drafting phase for which word would be used in the published version and "NFT" was chosen by the stakeholders.[29]

The term "NFT" and the awareness of the ERC-721 standard received significant exposure through the popularity of CryptoKitties in 2017.[27] While using the standard, CryptoKitties earned the recognition of being the first mainstream dApp;[30] the game's usage overwhelmed Ethereum's processing power at the time.[31]

Influence

[edit]

During the height of the breakout success of CryptoKitties and the emergence of ERC-721 tokens in 2017, an NFT marketplace called OpenSea emerged to capitalize off of the new non-fungible token standard.[32] It positioned itself early in the NFT market landscape and grew to a $1.4 billion market cap in 2021 during the NFT boom in 2021.[33]

in 2021, ArtReview's Power 100 ranked ERC-721 at the #1 spot, praising it as "the most powerful art entity in the world" for creating a new kind of market for artworks that deviated from traditional gatekeeping norms and ushered in a different kind of collector.[34] Artist Beeple sold an ERC-721 NFT of his composite artwork known as Everydays: The First 5000 Days at Christie's for $69 million and was the first instance of a legacy arthouse dealing in NFTs.[35]

General NFT Market

[edit]

The NFT market experienced rapid growth during 2020, with its value tripling to US$250 million. In the first three months of 2021, more than US$200 million were spent on NFTs.

In the early months of 2021, interest in NFTs increased after a number of high-profile sales and art auctions.

In May 2022, The Wall Street Journal reported that the NFT market was "collapsing". Daily sales of NFT tokens had declined 92% from September 2021, and the number of active wallets in the NFT market fell 88% from November 2021. While rising interest rates had impacted risky bets across the financial markets, the Journal said "NFTs are among the most speculative."

A September 2023 report from cryptocurrency gambling website dappGambl claimed 95% of NFTs had fallen to zero monetary value.

characteristics

[edit]

An NFT is a data file, stored on a type of digital ledger called a blockchain, which can be sold and traded. The NFT can be associated with a particular asset – digital or physical – such as an image, art, music, or recording of a sports event. It may confer licensing rights to use the asset for a specified purpose. An NFT (and, if applicable, the associated license to use, copy, or display the underlying asset) can be traded and sold on digital markets. However, the extralegal nature of NFT trading usually results in an informal exchange of ownership over the asset that has no legal basis for enforcement, and so often confers little more than use as a status symbol.

NFTs function like cryptographic tokens, but unlike cryptocurrencies, NFTs are not usually mutually interchangeable, so they are not fungible. A non-fungible token contains data links, for example which point to details about where the associated art is stored, that can be affected by link rot.

[36][37][38][39][40][41][42][43][44][45][46][47][48]

https://www.fastcompany.com/90155799/bitcoin-fever-turned-me-into-a-cat-pimp

https://www.cbc.ca/newsinteractives/features/vancouver-metaverse-british-columbia-technology

[49][50][51][52]

[53][54]

^scholarly journal

References

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