The Early Evolution of (Some) Art On The Blockchain — Part 1
There’s many histories of Art on the Blockchain out there. Here I analyse the thread through gaming assets on Counterparty which lead up to the mass adoption of the idea of the artistic Non-Fungible Token.
Counterparty
Counterparty was a pretty innovative platform in it’s day. It was a very early crypto project, which utilised the Bitcoin blockchain to store it’s own data. The data was a ‘distributed ledger’ protocol, with a decentralised exchange (DEx) and super easy 3rd party token creation, it was regularly a top 10 market cap coin.
With the general positivity and optimism surrounding Bitcoin, crypto communities attracted creative developers and it was inevitable that such interests as gaming and trading cards would be brought to the new technology. And with that came game design, graphic design and art.
Everdreamsoft
Having had prior success with computer trading card game Moonga, Everdreamsoft, inspired with the early idealism of Bitcoin, announced Spells of Genesis some time in early October 2014. Their in-game currency, Bitcrystals, was issued for a crowdsale and their intention was to use blockchain for their in-game assets too.
“I believe that blockchain technology will create a profound change on our society. We are at the dawn of complete change in how people exchange value over the Internet.” — Everdreamsoft CEO, Shaban Shaame, in May 2015
The First Art On The Blockchain?
On March 11th 2015 the asset “FDCARD” was registered on Counterparty and on April 17th Everdreamsoft put up a post on their blog, “What is an FDCARD?”.
This is an FDCARD:

In the game the asset was a healing spell and the card idea was a nod to Folding Coin, another Counterparty project, which rewards with tokens for the Folding At Home project, where users can donate their unused computer processing power to medical research.
As of the date that I’m writing this, an FDCARD will set you back $800. All 300 were distributed within 2 months and remain fairly well distributed.

This asset takes huge influence from the trading card games industry. It can certainly be called the first crypto-collectible, in that sense. As for art? It can’t be denied that this is a graphic design art piece, by an artist, Alejandro Hurtado, tokenised and sold as an asset on a blockchain.
And that was that! For about 6 weeks FDCARD had the whole blockchain art world to itself.
Everdreamsoft decided to forge on and began a steady stream of card releases on 1st June.

And here Spells of Genesis gives a nod to one of the newer platforms on the scene.

Sarutobi
There was the occasional interruption by assets from other projects. Most notably, the first gif card was announced by Sarutobi, a fun little game that rewards players with bitcoin.

Force Of Will
Already an online trading card game since 2012, Force Of Will announced their intention to go blockchain in September 2016, registering a whole bunch of assets in one go. Until that point SOG had released about 70 in-game card assets. Force of Will registered about 150, more than tripling the amount of game related crypto-collectibles to 236.

Again, it was along the same lines as Spells Of Genesis. It’s functional, it’s game related, it’s a crypto-collectible, it’s attributed to an artist … etc
But then …
Rarepepe
“Hey guys I made some rare pepe cards and have associated assets with them. Maybe they will be worth millions one day. I will give shitcoin cards to the first 15 people who paste their Counterparty address.” — @nola1978
In September 2016 a user named Mike, a long time member of the Counterparty telegram chat, posted this message to the group. The cards in question were these:

Pepe had been a meme long before he was blockchainized. The often misunderstood frog cartoon was at the centre of the so called Meme Economy, Reddit’s pretend market forum for buying and selling memes. Blockchain, however, offered true digital scarcity and the genius of utilising it for the meme market was yet another step towards inevitability.
On 17th September, the bespoke currency for all Rarepepe transactions was issued and airdropped to all holders of these first 3 cards.

The community built up reasonably quickly and other users created assets with cards associated. These again took a tongue in cheek influence from trading card games, but this time … no game.
This was a significant step. This was the first time that the art came first. These were no longer game assets. There was no intrinsic purpose driving their existence other than creativity, the creative depictions of a frog cartoon. And the submissions were open to the public with very few constraints.
The cards started out with that strange janky mix of meme art mixed with card game mockery, many crossed with references and in-jokes from the cryptosphere. But as time went on the card template and derivative nature was often bypassed.

But Rarepepe also had great utility. Counterparty was (and still is) extremely easy for user asset issuance. Rarepepe Wallet emerged as a bespoke platform for storing digital images in a crypto wallet. And the Counterparty Decentralised Exchange allowed secure exchanges between any asset.

A Telegram group developed, with a bot that could summon up any rarepepe card and the submission process was streamlined with a Telegram Submission bot. Some assets also became ‘access tokens’ allowing access to bonus content, music, games, websites, where only users who held that particular asset were allowed in.

There’s no doubt that these innovations drove the wide-spread adoption of Rarepepe and led to the value it accrued. Half-jokingly billed as the first real-world use-case for crypto, this was how to do art on the blockchain.
The beginning of Rarepepe saw a very definite ramp up of the number of assets issued on Counterparty.

Early on in the Bullish markets of 2017 the uniqueness of the Rarepepe project finally caught the media’s attention. Articles began appearing in major news and magazine outlets. In February the price of Pepecash started looking bubbly with a tenfold increase. Later in the year it’s market cap rose to around $89mil. It was thought to be in the top gains of the year with a whopping 47,500% increase.

It was Rarepepe that brought art on the blockchain into the limelight.
Immutability
There were some other important innovations to come out of the Rarepepe project. Early on the discussion turned to the true immutability of the images attached to the asset. Although the assets were immutable, were the images? Weren’t the images assigned to the asset just by the fact that someone said they were? How could any one person verify the image really was correct for the asset?
The first leap was made by a couple of users, Goat and Bench. As it turns out you can make a cryptographic hash of an image (after all, a digital image is just a bunch of numbers) and that hash can later be used to verify the image. The same image produces the same hash each time, any different image, even a close copy, gives a different hash. That hash can be inserted into the description field of the Counterparty asset for anyone to verify.
So here is the first truly immutable piece of art on a blockchain:

In the description field is the MD5 hash, https://xchain.io/asset/CHYNAPEPE and you can go to some online tool such as http://onlinemd5.com/ drop the image in and verify the hash is the same.

MD5 hashes, however, have their security flaws and more secure hash functions lead to longer hashes that don’t fit in the Counterparty asset description.
So, the next push towards immutability was by Rarepepewallet developer Joe Looney. Pepechain was made public on 22nd October 2016, only a couple of weeks after the MD5 effort.
“For those that want to secure rare pepe image rareness, check out https://github.com/loon3/pepechain”
Pepechain is a merkle tree of SHA-256 hashes, a much more secure cryptographic hash function. What this means is that each image has a hash linked in a branching tree-like structure to all the other image hashes. Only a single “root” hash needs to be given for verification and you can work back to it from the hash of the specific image you want to verify.

What’s more, Pepechain also has a second merkle tree to verify that the immutable asset names were actually officially accepted into the Rarepepe directory. And it all comes with a script that can download all the images and asset names and verify them for you. Is that immutable enough for you? IS IT?
Post Rarepepe
Anyways, while all this was happening the next big crypto project was chugging through it’s complicated development. Ethereum was second only to bitcoin, but boasting many more features because code itself could now be inserted in the blockchain. These ‘smart contracts’ allowed a much greater scope for tokenising assets and what can happen with them afterwards.
The boom in Rarepepe had caught the attention of the media and subsequently the more serious art marketeers, developers and platforms moved in to solve other digital art problems such as provenance and royalties among others.
But that, boys and girls, is for next time in The Early Evolution of Art On The Blockchain.
Further Reading
Jason Bailey’s excellent interview with Joe Looney: https://www.artnome.com/news/2018/1/23/rare-pepe-wallet-the-birth-of-cryptoart
Goat’s blog with a discussion on many Pepe subjects including the MD5 hash: http://shitco.in/2016/10/09/rare-pepe-fomo-and-the-alt-pump-dump-cycle/
A great explanation of merkle trees: https://medium.com/crypto-0-nite/merkle-proofs-explained-6dd429623dc5
If you have q’s about rarepepe ask here: https://t.me/pepetraders
If you have q’s about Counterparty ask here: https://t.me/Counterparty_XCP
And here: https://t.me/digirare
Also, thanks to Joe, Dan and Bench for plenty of help. You should follow them for more.
Edit
I have edited the intro to this article to reflect the fact that there were many other threads of art and blockchain crossovers going on and this is just one of them.