How did open tracking and analytics begin?

Open tracking began in the late 1990s by placing a tiny invisible 1 by 1 tracking pixel inside HTML email. When the email client loaded images it requested that pixel from the sender's server and the sender logged that as an open.

This is why many modern clients ask Display images because loading images also loads tracking pixels.

It was like attaching a small signal device to every letter so the sender would know when it was opened.