The first Rare Pepe was a Satoshi Nakamoto card, and the person who made it goes by Mike.

He posted it in the Counterparty Telegram chat in early September 2016. The card paired a Rare Pepe image with a Counterparty asset on the Bitcoin blockchain. It was, as far as anyone has been able to verify, the first time someone successfully tokenized a meme as a tradeable collectible on a public chain. Joe Looney, who would later build the Rare Pepe Wallet, has told the story consistently across multiple interviews. Mike walked into the Telegram, dropped the card, mentioned he had sell orders on the decentralized exchange, and the rest of the group started doing the same thing within hours.

Within a few weeks, dozens of cards had been issued. Within two months, there was a custom currency, a verification system, an artist directory, and a wallet built specifically to trade them. By the end of the year, people were paying real money for cartoon frogs anchored to Bitcoin.

The NFT didn't have a name yet. But it had already been invented.

Why Counterparty made it possible

Counterparty had been running on Bitcoin since January 2014. It's a metaprotocol. It extends Bitcoin without modifying it, by encoding protocol messages inside Bitcoin transactions that regular Bitcoin nodes ignore but Counterparty nodes parse and validate. Per the Counterparty whitepaper, the data lives inside valid Bitcoin transactions on the Bitcoin blockchain, and the rest of the Bitcoin network simply ignores it.

What this meant for art: anyone could issue a token. You broadcast a Bitcoin transaction with the right metadata, you specify a name and a supply, you pay a small XCP fee, and the token exists. It's transferable, it's countable, and its history is anchored to Bitcoin's proof-of-work. There's no smart contract platform to deploy to, no separate chain to bootstrap, no foundation to ask permission from. You broadcast a Bitcoin transaction.

By September 2016, this had been working for two and a half years. The Counterparty community had used it for prediction markets, in-game items for the trading card game Spells of Genesis, and various smaller experimental projects. What it hadn't been used for, at any meaningful scale, was art.

The first card and the cascade

Mike's first card was simple. A picture of Satoshi Nakamoto rendered as Pepe the Frog, issued as a Counterparty asset, listed for sale on Counterparty's decentralized exchange. The DEX has been live since 2014 and matches orders entirely on-chain. Mike's listing was a standard Counterparty order pointing at his new asset.

A few people in the Telegram saw it, asked how it worked, and started issuing their own. Within days the group had renamed itself, the cards had a loose set of conventions (a frog, vaguely card-shaped, often referencing crypto or internet in-jokes), and the volume of new submissions was already enough to need a system.

This is the part that gets undersold in most NFT history coverage. Nobody was building "an NFT project." There was no roadmap. There was no pitch deck. There was a Telegram and a series of jokes that happened to also be tokens on Bitcoin. The collectibility came from people deciding the cards were collectible, and then trading them.

PEPECASH and the currency layer

On September 17, 2016, a new Counterparty asset called PEPECASH was issued and airdropped to holders of the first three Rare Pepe cards. PEPECASH became the native currency for the marketplace. From that point onward, most Rare Pepe trades cleared in PEPECASH rather than XCP or BTC.

This was a fast move. The community had decided, within roughly two weeks of the first card, that this was going to be a thing big enough to need its own currency. It also meant PEPECASH itself functioned as both a currency and a Rare Pepe collectible, because holders of the first three cards got an airdrop that made early provenance financially meaningful.

The Hillary Clinton problem

Roughly three days after the first Rare Pepe was minted, the Clinton campaign published a statement linking Pepe the Frog to alt-right and white supremacist imagery. Joe Looney has been blunt about the timing in interviews: it was almost like, here's this awesome thing, let's do it, and then someone ruined Pepe.

The community kept going. The thing the broader public was reacting to and the thing the Rare Pepe people were building were not the same Pepe. Matt Furie created Pepe the Frog in 2005 as part of the comic Boy's Club, and the character had been a general-purpose internet meme for over a decade before any of this. The Rare Pepe community has consistently disavowed the hate-symbol use, and the Rare Digital Art Festival in 2018 made the distinction explicit on stage and in subsequent press coverage.

Worth being clear-eyed about this. The timing was genuinely terrible, and it shaped how the project was perceived in the mainstream press for years afterward. It did not stop the building.

Joe Looney and the Rare Pepe Wallet

Joe Looney is a mechanical engineer who'd been around the Counterparty community since earlier in 2016. He didn't create the first Rare Pepe and has been consistent in every interview that he didn't start the project. What he did was build the tool that turned it from a Telegram in-joke into something a non-developer could use.

The Rare Pepe Wallet, launched in late 2016, let anyone buy, sell, trade, edition, gift, or destroy Rare Pepes from a single web interface. It didn't take a commission. Anyone could submit artwork for inclusion, choose any supply, and set any price. The wallet handled the underlying Counterparty transactions; the user just saw a wallet of cards.

One feature is worth pulling out: gift cards. You could send a Rare Pepe to a freshly generated address and encode the private key as the gift card's secret code. Joe sent these around before Christmas 2016 with SCHROEPEPE, a card that displays differently depending on the device showing it. The feature mostly stopped getting used once Bitcoin fees climbed in 2017, but it's a small artifact of how much the original design assumed Bitcoin would stay cheap to use.

This is the project Artnome's Jason Bailey credited as the origin point of CryptoArt when he wrote it up in early 2018. By the time of that piece, the Rare Pepe community had cleared over $1.2 million in digital art sales. None of it had gone to a platform fee.

Pepechain and image authenticity

On October 22, 2016, Joe Looney published Pepechain. It solved a problem that nobody outside the community had thought about yet: how do you prove that the image associated with a token is the original image and hasn't been altered?

The earlier approach had been straightforward MD5 hashing, which has known cryptographic weaknesses. Pepechain replaced it with a Merkle tree of SHA-256 hashes. Each Rare Pepe image is hashed, and those hashes are arranged so that any individual image can be verified by walking back up to a single root hash.

The standard NFT pattern that emerged years later (token on-chain, image off-chain, hashed for integrity) was effectively prototyped here. The Rare Pepe community arrived at the structural problem and built a working solution before Ethereum's NFT standards existed.

What had actually been invented

By the end of 2016, Rare Pepes had:

  • A token format for individual collectibles (Counterparty assets)
  • A native currency (PEPECASH)
  • A user-facing wallet and marketplace (Rare Pepe Wallet)
  • A verification system for image authenticity (Pepechain)
  • A submission and curation process (community-curated series, eventually grown into the 36-series catalog)
  • A precedent for attaching bonus content to tokens (DJ J-Scrilla's DJPEPE in October 2016, which gated audio behind token ownership and which is functionally the first music NFT)
  • A market that cleared real money

Every element of what would later be called an NFT existed in working form before the acronym did. CryptoPunks launched in June 2017. The ERC-721 standard that defined Ethereum NFTs wasn't proposed until September 2017 and wasn't finalized until early 2018. By the time most of the people now writing about NFT history had heard of any of this, the Rare Pepe community had already shipped most of what would eventually become 36 series.

That's not a comparative claim about which chain is better or which community has more cultural weight today. It's a historical claim about who got there first. The answer is Mike, on a Telegram in September 2016, with a Pepe.

The 2021 resurgence

For most of 2017 through 2020, Rare Pepes were a footnote in mainstream NFT coverage. The attention moved to Ethereum after CryptoPunks and CryptoKitties launched, then to OpenSea and the broader ERC-721 ecosystem.

In 2021, the resurgence started. A Nakamoto Card Rare Pepe sold for over $500,000 in August of that year, and Sotheby's began publicly discussing a Rare Pepe auction. Joe Looney's frustration from earlier in 2021 is worth surfacing: he watched CryptoPunks get repeatedly branded as if they had invented NFTs, and pointed out that his community had created the first NFTs years before the term existed.

The Rare Pepe market still trades today. The original cards from 2016 are now treated as historical artifacts of the medium, which is what they are, and active trading in rare pepes has continued through every Bitcoin cycle since.