The last 10 yrs of "Non Fungible tokens"

The common narrative is that crypto is ripe with scams, but no industry is as open and verifiable. Even when steps are taken to obfuscate identities, their chain of custody is verifiable, and once the individual links it to his identity, it's over for them. Even though digital assets and cryptocurrency have seen multiple high-profile scams, it's an industry that will lead to the wide-scale adoption of cryptography. Art has also made it onto blockchains in the form of "NFTs," but the term can be confusing. An NFT is a representation of ownership, and it isn't on the blockchain, like many may think. NFTs are useful in proving ownership, but they could also be useful in proving identity. The NFTs of the early days made a bad name for the actual underlying technology. With many projects leading to massive frenzies in ponzieque boom markets, we have seen multimillion-dollar jpgs sold with little to no rights to the artist.

The value propositions for NFTs are clear to those involved. Artists were promised a royalty stream, but as liquidity dried up, so did revenue. The majority of people lost money speculating on them. The lessons learned from the tulip frenzy and the exuberance of technology are slow to boil, but nothing speeds this up faster than bankruptcy. Just like when the dot-com bubble burst, only the strong survived.

NFTs came into existence 10 years ago, when Kevin McCoy, a graphic artist, and Anil Dash, a technology executive, The duo referred to it as "monetized graphics." It was the first implementation of blockchain-based verification for digital artwork. The original goal was to create tradable art so that artists could earn money. By October 2015, the first "NFT" project would make its debut on Ethereum; however, there wasn't much traction. In 2016, the first rare Pepe or meme NFT came into existence through counterparty, a peer-to-peer financial platform built on top of Bitcoin. It wasn't until 2017 that we would see real projects pick up steam, with Crypto Punks, Crypto Kitties, and EtherRocks all launching.

This would lead to the first official Ethereum implementation of non-fungible tokens, ERC-721. With the crypto bull market of 2020, the market for NFTs took off, seeing projects triple. This continued into 2021, with 200 million dollars in volume. Market places such as Open Sea emerged to facilitate trading, and the market capitalization grew to 1.4 billion dollars in 2021. It seemed everyone was into NFTs. Actors and high-profile individuals started getting involved in projects and promoting their own NFTs. Famous auction houses, such as Sotheby's, also got into the business. This would all come to a screeching halt in the spring of 2022, when volumes fell 92%. Bringing an end to NFTs or so many believed.

So why do I believe we will see the rise of NFTs again? Perhaps in a more utilitarian sense, but I believe they will stand the test of time. Volumes for NFTs have been on the rise, even though many have not returned to their former highs. There has been a concerted effort on some projects to provide value. NFTs are being used as "proof of community." With many crypto projects rewarding NFT holders in a bid to encourage users, one such example is MadLads, which has developed an entire ecosystem around itself. Not only are NFTs communities or tools for community acquisition, we are also seeing financialization and the creation of xNFTs.

xNFTs are much more than tokenized metadata; they have executable code and staking. The nature of NFTs is that the contract controls their creation and modification. Once developers revoke ownership, it is immutable. This framework can serve as a way to validate data in a society that can generate exact copies using AI. With AI, we will see a growing concern for scams and misinformation. Social media made distribution easy, which allowed misinformation and scams to flourish. AI makes it multiples easier to fool. In a world where your voice or even video cannot be proof, how do we combat this? The solution lies in the tokenization of assets. In other words, for something to be verified, it should have a cryptographic proof. Any content that isn't verified is discarded or filtered. The promise of blockchain has always been one of consensus through the power of mathematics. It is only through blockchain that we can combat these bad actors, who are almost certain to become better. I am not calling for everyone and their mother to be tokenized, but for communications to be. We can no longer rely on "I'll believe it when I see it or hear it." Generative AI is only going to get better, and it will become harder to spot. These tools will prove invaluable to this effort.

The opportunities for those in the business of selling their talents or products are even greater. Not only are NFTs a great way of validating ownership of an asset, they are also an effective means of distribution. Once you are aware of holders of an NFT, promotional material can also be sent en masse with minimal cost. In the current world, it has become a pray and spray method of advertising and promotion. The majority of companies have resorted to more productive forms of content creation. As content becomes even easier to generate with AI. As attention becomes a hot commodity, this option becomes increasingly expensive. For the veterans of digital assets, you may be thinking, but these NFTs are expensive to mint. But you may have been living under a rock for a while because we now have compressed NFTs. Compressed NFTs, like compression does to files and audio, make them better. It is now possible to mint thousands for minimal cost and distribute them. Something only possible on Solana, the people's chain. Not only can they be efficiently produced, but they are also programable. They can be 'soul-bound' to an individual, serving as digital proofs or identities. The use cases of a cheap, efficient, and programmable asset are endless. It will take time for these to be realized, but using NFTs where they can provide the best value is a great first step. That is something we are in the initial phase of, but I believe we are reaching maturity. With the coming upgrades and improvements to Solana and other blockchains, the most important thing I hope you take away from this goes back to my earlier article about innovation and the printing press. Imagine if people had given up on the printing press because most people couldn't read. That is exactly what you are doing when you dismiss NFTs. When you see something unusual, don't immediately dismiss it; it could be the early days of a new transformative technology. Remember, true innovation isn't obvious to everyone, and often it is the least obvious.