Before CryptoPunks: The Pre-History of NFTs
Five years before the Punks, people were already trying to make blockchains hold unique things. The story of Colored Coins, Counterparty, and the Rare Pepes.
Every history of the NFT wants to begin in June 2017, with ten thousand pixel faces appearing on Ethereum. But the idea is older than that — five years older — and its first drafts were written on Bitcoin, of all places.
Colored Coins: the first draft (2012–2013)
In March 2012, Meni Rosenfeld published the first serious proposal for “colored coins” on the Bitcointalk forum. The idea was elegant: take a tiny amount of bitcoin and attach extra data to it, so that this particular satoshi represents something else — a share in a company, an ounce of gold, a coupon, a deed. The coin’s monetary value becomes irrelevant; its identity becomes the point.
By the end of 2012, Yoni Assia, Vitalik Buterin, and others had written the “Overview of Colored Coins” whitepaper, and several startups tried to build on the concept. None got far. Bitcoin’s scripting language was too limited to track colored coins safely — a colored coin that got spent as a regular fee would simply lose its color, and there was no clean way to prevent accidents like that.
Colored Coins died as a product. They survived as a proof of concept: a public ledger could, in principle, distinguish one unit from another.
Counterparty: tokens actually trade (2014)
The next step came in April 2014, when Counterparty launched as a protocol layered on top of Bitcoin. By embedding Counterparty data inside bitcoin transactions, it let anyone create custom assets, trade them on a decentralized order book, and even run a decentralized exchange — all secured by Bitcoin’s mining.
Counterparty mattered for two reasons. First, it made token issuance permissionless: you did not need a company’s blessing to put an asset on-chain. Second, it attracted the first real experiments in what we would now call NFTs. In 2015, the trading-card game Spells of Genesis issued its in-game cards through Counterparty — widely cited as the first blockchain game assets. Its BitCrystals token became one of the earliest examples of a game economy settling on a public ledger.
Rare Pepes: culture finds the ledger (2016)
Then, in October 2016, the internet showed up. Artists began issuing meme trading cards — variations on Pepe the Frog — on Counterparty, with a mock-serious “Rare Pepe Foundation” certifying which cards were scarce enough to count. It was a joke wrapped in a ledger, and it traded like an art market: the legendary Pepe Cash card changed hands for serious money.
The Rare Pepes are the missing link between crypto infrastructure and internet culture. They combined the three ingredients the 2021 boom would scale to absurdity — community identity, meme-grade artwork, and verifiable scarcity — half a decade before Christie’s ever rang a gavel.
Why the pre-history matters
CryptoPunks did not appear in a vacuum. They appeared on Ethereum because Ethereum’s smart contracts finally made uniqueness safe to issue — no colored coins accidentally losing their color, no dependence on a second protocol’s quirks. Larva Labs stood on five years of accumulated attempts.
The next time someone tells you NFTs were invented in 2017, walk them through this room first.