Thread by @el33th4xor

Today’s #FreeLoveFriday is about a topic that has been seeing a lot of discussion recently. Namely, I want to talk about Non-Fungible Tokens (NFTs) in general, and to make it specific, I’ll focus on CryptoKitties.

https://twitter.com/el33th4xor/status/1357754146875715591?s=20

First of all, there is the impression that NFTs were invented on Ethereum and that the Bitcoin community is just now getting in on the NFT game. This is not actually how it happened.

The very first NFTs were invented and issued on Bitcoin, by layering them on top of Bitcoin transactions. Among the most notable were NFTs centered around Pepe The Frog. I will leave dissecting the social aspect of Rare Pepes alone and focus on the technical side of NFTs.

These early blockchain collectible cards were issued in batches called “Series,” with each card featuring some artwork that crypto folks of the time found topical.

The first pepe series contains around 30 cards. Only a few of them are issued after real people. One of these is Satoshi Nakamoto, another is Luke-Jr, a Bitcoin developer, and I am (un)lucky enough to be memorialized as a Pepe myself.

My NFT in this series is especially rare: the PEPEGUN card is the only one of its kind to have been minted in floating point, so I’m the only divisible Pepe. Welcome to fractional Pepe ownership!

While Ethereum was not the first to create NFTs, the Ethereum community is responsible for their incredible growth since.

In October 2017, we got the @CryptoKitties phenomenon. @AxiomZenTeam released these cute creatures and they went viral overnight. A CryptoKitty is essentially a “kitty DNA sequence” for a cute cat that you own on the blockchain.

No one knew exactly how the kitty DNA mapped back to the cat phenotype, that is, how the cat looked. You could breed your kitty with someone else’s, and get a new cat that blended the DNA of its parents. That gave you clues about the kitty DNA.

So, like Gregor Johann Mendel and his peas, the internet set to task, trying to figure out the kitty DNA and to breed the best, worst, and quirkiest looking cats.

At the same time, people got to trading these weird creatures. They were so in demand that one of them reportedly sold one for $170,000. thenextweb.com/hardfork/2018/…

I remember looking for a CryptoKitty in the early days. The cheapest decent-looking cat cost more than $60, and the very cheapest I could find, which looked ugly as sin, was $42.

I briefly considered which one to get, then decided that, for that price, I would get a real cat from the local rescue, which would at least warm me up on a cold day.

Cryptokitties are still in existence. They are still ticking along, and people have bred some really strange-looking specimens.

There is a lot of confusion about NFTs. One major one is that they can be used to protect real-world assets. This is true, but not in the obvious way. They cannot be used to make a picture on the Internet uncopyable. You can always screenshot what you see in your browser. Obvi.

But what they can do is embody some unique information in each card. That’s what makes these cards non-fungible. Each one is unique. Your dollars, bitcoins, ether, and AVAX are designed to be fungible.

Techies will object to the previous tweet and they are technically right -- dollars carry serials, $BTC and $AVAX UTXOs, $ETH has chain history and so on. But they are designed to be used interchangeably and, most importantly, hold the same value.

NFTs, on the other hand, are designed to carry unique information. And this opens up a world of possibilities.

An NFT can, for instance, carry unique information for a user that enables them to perform some task: act as a fan token for a team or celebrity, carry assets between online games, and even house kitty DNA.

We are seeing the most shallow uses of NFTs right now, as they are used mostly to show solidarity for a cause. But there’s much more to NFTs than simple collectibles and trading cards.

I’m very excited by NFT games in development, where people create Magic The Gathering-like decks on a blockchain. Can’t wait to see what @breitwoman and her stellar team are planning to release on Tezos.

I also have ideas for how NFTs can play a vital role in DeFi on @AvalancheAVAX, but I’ll have to keep those under wraps for now.

Overall, I’m super excited about these new assets. We have seen only the first incarnation, and even those have struck a chord.