/industry-wired/media/agency_attachments/2024/12/04/2024-12-04t130344212z-iw-new.png)
/industry-wired/media/agency_attachments/2024/12/04/2024-12-04t130332454z-iw-new.jpg)
/industry-wired/media/post_attachments/wp-content/uploads/2023/04/Different-Types-of-NFTs-A-Simplified-Guide.jpg)
A simplified guide on different types of NFTs that you need to be aware of in the year 2023
In just a few years, non-fungible tokens (NFT) have transformed from a relatively unknown area of cryptocurrency to one of the most well-known. An NFT is a token that indicates ownership of a distinctive digital artwork, and if you questioned the typical person, they would likely respond that this is one type of NFT.
The number of NFTs has increased along with the NFT market's explosive growth into a multibillion-dollar sector. NFTs are currently emerging across a variety of industries, from fashion to play-to-earn (P2E) gaming, which is forging real-world utility and creating strong online communities in addition to establishing ownership of physical or digital goods such as art, music, photographs, and collectibles.
Here are the various kinds of NFTs you must be aware of.
PFP NFTs
PFPs, or profile picture NFTs, are exactly what they sound like NFTs that are frequently used as a person's digital avatar for their profile photo on social media platforms, particularly Twitter. The first PFP NFTs were CryptoPunks, which were developed by Larva Labs in 2017. Larva Labs produced a collection of 10,000 punks with various characteristics using an algorithm. The Bored Ape Yacht Club (BAYC) PFPs, which were developed by Yuga Labs in April 2021, are the most well-known NFTs in this genre to date. The droopy-eyed ape that fetched the highest price was Bored Ape #8817, which went for US$3.4 million.
Play-to-earn gaming NFTs
GameFi is another name for play-to-earn (P2E) gaming NFTs. Historically, in-game materials such as weapons and armor could be purchased from the game developer or platform to enhance the experience. The difference between P2E and NFTs is that analogous decorative products such as skins or shoes are NFTs, and most play-to-earn games require an initial purchase of one of the game's NFTs to earn crypto for playing. These NFTs are typically available for purchase in-game or on secondary marketplaces such as OpenSea.
Music NFTs
Why would I pay for a music NFT when I can simply play or download the song from an online music service like Spotify or iTunes? The distinction is between purchasing a music NFT, which gives you ownership of the file, and obtaining a license, which only permits you to listen. Artists and their fans might develop new bonds thanks to music NFTs. By purchasing a single or album in full or in part, fans can support and invest in the work of their favorite artists.
Sports collectible NFTs
With a reported current market valuation of around US$1.4 billion, sports collectible NFTs have reimagined how fans buy, sell, and trade sports memorabilia. This includes turning traditional sports collectibles like trading cards into NFTs, like videos that document memorable plays during NBA games.
Generative art NFTs
Creative work NFTs have their origins in a robotically assisted, computer-controlled abstract art movement from the 1960s. A specified aesthetic is developed utilizing a variety of software and artificial intelligence tools using the artist's specifications and an algorithm with randomness built in to produce distinctive works that have a similar appearance and feel.
Fashion NFTs
Connecting real-world apparel with embedded chips to NFTs provides an exciting, one-of-a-kind designer experience that allows consumers to interact in new ways with brands they love. This fashion breakthrough incorporates the use of virtual reality headsets to try on products in augmented reality settings. Major designers such as Tommy Hilfiger and Dolce & Gabbana have developed digital-only collections available as NFTs that may be worn by your avatar within the Decentraland Metaverse platform.
Utility NFTs
Some NFTs, known as Utility NFTs, are used to connect digital tokens to real-world benefits and experiences. Some NFTs fall into one of the preceding categories while also offering usefulness and value, such as club membership, access to IRL experiences, or attachment to actual things. Other NFTs are only intended to provide entry to a physical club, tickets to an event, a nightclub, or other experiences.
This sort of NFT is influencing practically every other type of NFT, including the aforementioned Bored Ape Yacht Club, which now provides exclusive admission to parties and events. PROOF collaborative projects, such as the Moonbirds PFP Project, provide benefits to future drops.