History of the NFT by Spl.yt Core Foundation

Published on: 20.05.2021

Spl.yt Core Foundation article explains the origins of NFT and how it has evolved through today with Splytcore’s eNFT.

🔻Step 1

The concept was first introduced through Colored Coins. So if we compare non-fungible tokens to pennies, then each penny is fungible because it is equal to each other penny. But if we cut one of those pennies into a star, it becomes a completely unique, non-fungible penny.

So if we use Colored Coins in this analogy, we would color some of the pennies red, making them into semi-unique pennies. Colored Coins were an idea to take Bitcoins and “color” them into various different types of assets, including other currencies, shares of a company, and even collectibles. It was primitive, but it would create a novel use case for Bitcoin technology. The idea never took off, but Meni Rosenfeld, a chairman at the Israeli Bitcoin Association, did write a highly detailed paper describing what they could one day be.

🔻Step 2

Then in 2014, two different entities took the next step towards the concept of NFTs.

The first was Glitch CEO Anil Dash and digital artist Kevin McCoy who have a weak claim on a blockchain-based attempt to assert digital ownership. In a hackathon, they made what were called “monetized graphics,” though they could best be described as a way to verify digital art.

The second entity was Counterparty, a peer-to-peer, open-source platform where users could trade collectible digital assets, though at the time it was mostly used for meme trading. But it did awaken the idea of digital collectibles in the crypto community.

🔻Step 3

Another contested moment in time was in 2017 when Cyrus and his team put together a tokenized asset. This was around the same time that Crypto Kitties and Crypto Punks came out.

How Cyrus saw it was a possible solution to the double sell problem. A consequence of cryptocurrency was solving the double-spend problem. With digital forms of fiat currency, it is possible to spend the same dollar twice at the same time. In retail, it is possible to sell the same item twice at the same time. So if Bitcoin could solve double spend by preventing duplicate spends, it should be possible to prevent duplicate transactions as well.

So after playing around with the architecture, Cyrus and co-founder Josh started developing the “tokenized digital asset.” They made a few for Lamps Plus, Mag Park, and Coolest.

Eventually, because of the growing demand for tokenized assets, Ethereum adopted the ERC-721 standard. But even as the popularity of NFTs grew, they were mainly used for digital art and collectibles for a long time.

🔻Step 4: the eNFT

That brings us to today. NFTs are becoming mainstream, but most people only know them as art. Only because of the boom have people begun to slowly realize other possible uses. As we all know by now, tweets, music, and NBA video clips are becoming tokenized as well.

But even these slight derivations don’t capture the massive potential of creating scarcity and ownership in digital data. NFTs can be used for an incredibly wide range of applications and can be programmed with all kinds of useful functions.

The eNFT encompasses that wide range of possibilities and enables a brand-new type of data transmission. Modular, autonomous blocks of programmable data. Trustless and transparent e-commerce. Think of the eNFT as a digital fingerprint. It is unique and cannot be duplicated, verifying the individual data and authenticity of the product.