The theme of the last ten years could be described as the decade when jokes became true, and the story of NFTs is no exception. Imagine telling someone in 2011 that a buyer would be willing to pay $69 million USD for a JPEG, which was being sold at world-renowned art auction house Christie’s of all places. It’s hard even to believe now. 

So, if NFTs aren’t going away, where did they start, and where could they go?

JPEG Summer

It was summer 2021 and the JPEG reigned supreme, propelled to stardom by the rise of the NFT (non-fungible token). Suddenly, humble pixels took on new significance levels as the art world and Silicon Valley finally found a mutual interest in new media and crypto, sending the blockchain and NFTs mainstream. 

Techies, crypto enthusiasts, art collectors, and celebrities alike saw an opportunity for NFTs as financial assets. At the same time, the pandemic also left more people at home looking to spend and show their wealth online. Talk of Web3 and the metaverse may also have been to thank for the staggering $24.9 billion in NFT sales for 2021 compared to only $94.9 million just the year before. 

For anyone thinking NFTs might be a flash in the pan, there are a dozen evangelists that say otherwise. Even the buyers of the $69 million Beeple NFT have since aligned their purchase with an anti-racist statement that championed crypto’s equalizing influence. The statement also called for recognition of the rising global south and its buying power, further fuelling headlines about the work and raising the profile of NFTs and crypto in general. 

The first NFT and the future of Crypto

NFTs have been around longer than 2021, although many people might not know it. The first NFT was born in 2014 at the Seven on Seven conference at the New Museum in New York City. It was the result of a 24-hour collaboration between art and tech that produced the first “monetized graphics” bought and traded on the blockchain. 

Growing awareness and popularity over the past year has understandably also piqued interest in the first NFT ever to be minted. The short video clip ‘Quantum’ (2014) produced at the event saw renewed popularity last summer when it was included by Sotheby’s in their first curated NFT sale. The show signaled the auction house’s embracing of cryptocurrency with their decision to start accepting digital currency payments for other physical works of art. Crypto’s widening acceptance was echoed worldwide last year in both business and governments. El Salvador is one example of a country going all-in with plans for a Bitcoin City after it became the first government worldwide to legalize Bitcoin as an official currency. 

Apes, Punks, and Kitties: The value of community 

The rise of JPEG summer also gave way to NFTs as profile pictures on social media as PFPs (Picture For Proof), which proved a trendy way for people to promote themselves as NFT owners. Celebrities like Stephen Curry and Eminem caught international attention when they both joined the Bored Ape Yacht Club, adding sparks to the NFT mania by switching their Twitter profiles to their apes. Experimental projects such as the Novatar aging avatar that grows old over time further explore what the future of PFPs as our online identities in the metaverse could be. 

Experimentation is valued highly within the NFT scene. Built by a small group of digital innovators, its success has come from engagement with a dedicated community. 2017 was the year that launched both Cyptopunks and CryptoKitties into the world. Only 10,000 pixelated punk portraits were made, giving them a cult status and rarity value in 2021 that has seen price values soar to over $11 million USD – for icons minted initially for free. 

The exclusivity of ownership and prevalence of ‘drop’ culture in these projects has been key to their success and replicated by many other NFT entrepreneurs. While the finite number of Cryptopunks boosts their market value, it’s the access to the coveted punk-owners-only Discord channel that many are buying into. Meanwhile, the success of CryptoKitties illustrates the possibilities for NFTs amongst the gaming community, for instance, where blockchain has enabled a play-to-earn gaming model where they can generate revenue through participation. 

NFTs in 2022

If you’re thinking about getting into NFTs, the best place to start is an online marketplace, where you can browse a variety of examples. If you look for work that speaks to you, you’re less likely to mind a piece losing possible financial value if you do decide to buy. Creating your own digital wallet is also a great way to get familiar with the multiple blockchains NFTs can exist on. 

With so much energy and innovation driving widespread developments, the attention surrounding NFTs seems likely to outlast the JPEG summer of 2021. Whether you choose to get involved or not, interest in NFTs and applications for their use will continue to spread across industries.