What are the Types of NFT? Digital Art, Collectibles, and More Explained

Non-fungible tokens (NFTs) have revolutionized the digital landscape, emerging as a more sought-after mode of digital ownership and investment. As opposed to cryptocurrencies, which are fungible, NFTs are special tokens that symbolize ownership of an individual digital object or asset. These tokens have been in the limelight for their usage in fields such as art, gaming, and collectibles.

In this article, we’ll explore the different types of NFTs, including digital art, collectibles, and more. We’ll also explain how these digital assets work, their connection to cryptocurrency, and what makes them so special. If you’re interested in understanding NFTs better, keep reading!

What is an NFT?

Prior to discussing the types of NFTs, it’s necessary to know what an NFT is. An NFT is a digital asset that proves ownership or authenticity of a particular item, ranging from digital art, music, videos, virtual property, or even game items. These tokens are saved on a blockchain, most commonly Ethereum, that guarantees their distinctiveness and security.
The biggest distinction between NFTs and cryptocurrencies such as Bitcoin or Ethereum is that NFTs are non-fungible. What this implies is that every NFT is different from another and cannot be substituted by another one, while cryptocurrencies are fungible and can be swapped for an identical unit.

Now that we have an initial grasp on NFTs, let us discuss the various types of NFTs that have become popular.

1. Digital Art NFTs

Digital art NFTs are likely the most popular type of NFT. NFTs are a one-of-a-kind digital piece of art, be it illustrations, animations, or even a short movie. Digital artists can make their digital artwork tokenized and be sold on digital marketplaces like OpenSea or Rarible.

By purchasing a digital art NFT, consumers are not just buying the artwork but also gaining ownership of a unique piece. The ownership is then stored on the blockchain, which gives verifiable evidence of authenticity.

For creators, NFTs provide a new method for generating revenue from their work. They can market their work directly to buyers without galleries or intermediaries. NFTs also permit creators to add royalties, so they can receive a portion of sales going forward whenever their work is resold.

Several high-profile NFT sales have made headlines, with digital artists such as Beeple selling their pieces for millions of dollars. These sales have served to raise NFTs’ visibility as a viable method of owning art.

2. Collectibles NFTs

Collectibles is another favorite type of NFT. These tokens are digital collectibles that can be purchased, sold, and traded, similar to traditional collectibles like trading cards, rare stamps, or limited-edition toys.
In NFT’s universe, digital collectibles typically come in the form of virtual trading cards that have anything ranging from sports legends to fantasy characters. The idea is the same as physical collectibles but digitally, so that individuals can purchase and sell them using online channels.

One of the most popular examples of NFT collectibles is CryptoKitties, a game on the blockchain where users are able to purchase, breed, and sell digital cats. The special cats are able to be rare and highly valuable, thus highly desirable among collectors. Some other collectible NFT initiatives include NBA Top Shot, in which users are able to collect official NBA moments as NFTs.

3. Virtual Real Estate NFTs

Another thrilling use of NFTs is in virtual property. Virtual worlds such as Decentraland, The Sandbox, and Somnium Space enable users to purchase, sell, and build on virtual land, and these transactions are made possible through NFTs.

Within these virtual spaces, users are able to create and personalize their virtual land, construct buildings, or even organize events. The ownership of these virtual lands is expressed through NFTs, guaranteeing that each land is one-of-a-kind and owned by a particular entity or person.

The worth of virtual property can differ based on location, size, and development potential. For instance, a piece of land close to a well-known virtual landmark could be more valuable than a piece of land in a less visited area. Players and investors are increasingly considering virtual property as a means of diversifying their cryptocurrency holdings.

4. Music and Audio NFTs

NFTs are also causing a splash in the music world. Artists and sound creators can tokenize their music and sound files as NFTs, enabling them to sell their compositions directly to collectors and fans.

Through producing and selling music NFTs, artists can have complete ownership of their materials and cut out intermediaries like record labels. They can also provide fans an opportunity to own exclusive songs or live performance tracks, forming a direct connection between listeners and creators.

Aside from music, audio NFTs can be other types of sound art, such as audio clips, sound effects, or even podcast episodes. The fact that blockchain technology is used guarantees that every audio NFT is one-of-a-kind and cannot be duplicated or copied, making the buyers feel like they own something special.

5. In-Game NFTs

The video game industry has rapidly embraced NFTs, enabling players to purchase, sell, and exchange in-game items like skins, characters, guns, and more. These NFTs bring a new dimension of ownership and scarcity to digital items, increasing their value to players and collectors.

For instance, in blockchain video games such as Axie Infinity, users are able to obtain rare creatures named “Axies” that could be bred, nurtured, and fought against. Every Axie is described as an NFT, and users are free to sell or exchange their beasts on different NFT marketplaces.

These in-game NFTs have revolutionized gaming, making virtual assets a realizable asset that players can generate revenue from. Moreover, in-game NFTs are usually connected to cryptocurrency, allowing players to receive rewards and trade them for actual value.

6. Domain Name NFTs

Domain name NFTs are another fascinating application of blockchain technology. Similar to website domain names, these digital tokens are unique identifiers for websites or online services.

Blockchain domain names, like those developed by projects such as Unstoppable Domains, are tokenized in the form of NFTs. These domain names can be utilized for websites, online companies, or even digital wallets to hold cryptocurrency.
As domain names tend to be in high demand, having a rare or unique domain NFT can prove to be a sound investment. Also, the decentralized aspect of blockchain makes the transfer and ownership of these domain names transparent and secure.

Conclusion

NFTs have changed the way we approach ownership in the digital era. From digital art and collectibles to virtual properties and music, NFTs provide endless use cases that keep unfolding and developing. There is a unique value and appeal for each category of NFT, and they are all highly connected with the world of cryptocurrency.

As the NFT market expands, more types of NFTs will likely emerge, and they could become an integral part of various industries, including entertainment, finance, and gaming. Whether you’re an artist looking to sell your work or an investor interested in diversifying your cryptocurrency portfolio, NFTs offer exciting new opportunities for digital ownership and investment.

By knowing the various forms of NFTs and their worth, you can make clear choices regarding how to interact with this fast-emerging sector.