The oldest known usage of "nifty" is in an American poem from 1868. If you read the poem at this link, you'll find that that author found it useful to comment on the meaning of the word inside the poem itself. That's an incredibly unusual circumstance.
Should we trust the poem's own interpretation, "nifty" is a shortened, altered form of "magnificat", a Latin word borrowed (in a highly specialized meaning) into English hundreds of years earlier. At the time the poem was written, a Latin-literate reader of the time might perhaps realize that the Latin word "magnificat" is a compound from "magnum facere" ("to make grand", opposite in meaning to "devalue"), and that the "ni" and "ft" parts of "nifty" come from two separate Latin morphemes.
The word "nifty" is unrelated to the much older English word "nift", once a doublet of "niece" which has rather thoroughly fallen out of use by now, making room for entirely new usages of "nift", all the latter derived from "nifty". I am able to find anecdotal usage of nouns, adjectives and verbs, all spelled as "nift"; some of them are listed in the urban dictionary. Sadly, these words being so new, they haven't yet made it into reputable dictionaries and the extent to which they are already established in actual language, as well as their exact meanings, is a rather poorly documented matter at this time.
I think that it's the point of the nift (as a noun) to be mysterious and differently identified on a case by case basis. Being a tongue-in-cheek backformation from "nifty", it is defined as the essence which makes something nifty.
It would be a mistake to think that "nifty" is derived from "nift", though.