In less than 7 months since the start of 2021, over $700 million worth of non-fungible tokens (NFTs) have been sold. This spectacular rise of NFTs has created a lot of different applications and forms of NFTs which makes it difficult to keep track of all. Therefore, it seems essential to explore the different forms and types the NFTs may take in order to get a better understanding of the exploding world of NFTs.
Why a Non-Fungibile Token?
As the simplest definition, a non-fungible token (NFT) is a unique digital asset that cannot be replaced or duplicated. Although it could be almost impossible to replicate a physical artwork, it is much easier to make high quality of digital collectibles using modern technology, which makes it infeasible to recognize the original digital artwork from the replicas. As the result, there must be a way to make the original digital art unique and win its certificate of ownership. The solution is the concept of NFT.
By ‘tokenizing’ digital artwork, a certificate of ownership and authenticity is created for only and only the original creator. However, this certificate can be sold and passed on to the next buyer/owner so that ownership of the digital asset is guaranteed and cannot be tampered. Therefore, the collectible remains authentic and unique in sense.
But how this authenticity could be verified? Easy, such certificates are publicly available om blockchains. Even in hundreds of years from now, the exact history of an NFT ownership can be traced with no defraud.
Different types of NFTs
The significant discussion on digital assets recently has focused on the different potential aspects of NFTs and the value and risks related to them. Making use of the functionality of the blockchains, non-fungible tokens are able not only to present the true origin of a digital asset but also hold, limit, or deny access to rights of an individual on their assets, and, as the result, ensure exclusivity and authenticity.
Recently various sectors seem to get interested in NFTs due to their developing infrastructure and growing scope for innovation in the domainwhich makes it reasonable to expect the emergence of new types of NFTs. Here, we take a look at some of notable NFT types which are popular at the present.
Artwork , Most Popular Type of NFT
At the present time, art world has shared the widest application of NFTs. Digital artists find NFTs as fantastic innovations to display and market their artwork since NFT marketplaces provide great exposure opportunities. An advantage of NFTs to digital artists includes gaining more ownership over their artworks; for one point, they can receive a percentage every time their work is resold; therefore, when the value of the art piece drastically increases, the artist will now able to benefit from it, without any complications.
As NFTs are widely taking the art world, different digital collectibles are developing, including digital designs, videos, gifs, photographs, memes, social media content, and even pixels.
Video Games/Metaverse applications
It is a fact that a lot of the attention goes to the digital art space, but NFTs have also been applied in video games in form of video game skins, avatars, or collectibles within a video game. As an example, gamers may buy rare weapons or swords in a game, and re-sell once they wish (or even when they are done playing the game). Such video game NFT assets could also be interoperable as well: gamers further may purchase NFT Avatars or items that can be used across different games.
The metaverse, which is a growing virtual universe for those who wish to create their own world, makes it possible to share a lot of opportunities for NFT applications. As the recent forms of metaverse tends to link virtual reality, virtual currency, and non-fungible tokens all together, some courageous gamers are exploring the field for the joy.
As an example a digital house was sold for $500 K in Digital Land, a virtual real estate market. Some projects using these forms of NFTs include Sandbox, Decentraland, Somnium, Cryptovoxels, amongst others.
Most of us have probably collected physical collectible cards, such as baseball cards or Pokemon cards. Trading NFT cards essentially resembles the virtual version of the physical asset sell. A huge section of different trading cards has been currently available on OpenSea, the largest NFT marketplace. Some projects in the field are Sorare, Gods Unchained, CryptoKitties, etc.
Sports teams are currently taking the advantages of creating their own NFT collectibles. The first sports organization that presented its NFT assets was the NBA! NBA Top Shot made it possible for their fans to purchase short video highlights of their favorite basketball team.
Many more different NFT collections have lunched across different sports, such as boxing or Formula 1.
The other groups to join the world of NFTs are singers and composers. King of Leon was the first band to release an NFT album. Many other musicians are also looking for ways to monetize their art through the blockchain and NFTs. Such a change seems to significantly influence the entire music industry.
s far as music market concerns, most of the income from music currently goes to third-party intermediaries, such as distribution platforms or record labels; however, the blockchain may make artists to gain the profit. It is believed that intellectual property rights and improve the distribution of royalties could be better managed using Blochchain technology and NFTs. ASAP Rocky recently auctioned NFT music, too.
One of Newly known types of NFT is using a domain name as NFT, it is much easier for a domain name owner to control his domain with the use of private keys, since traditional domain names require the oversight of an external organization to authorize assets. Domain names NFTs could also be used to link to crypto wallets in addition to websites which creates infinite possibilities for owners. The most expensive NFT domain name ever sold is “win.crypto” blockchain domain NFT sold for $100,000.
Another interesting trend in domain names in the crypto world is a string of emojis. Ens. domains or Unstoppable.domains are good examples of some successful domain names in the field.
Pandemic time, which has shown to cancel every party and close everywhere, makes it almost impossible to wear fancy cloth from famous brands. However, NFTs are here to help. Now you can buy an avatar you’re using in your favorite video game or Metavers!
Seems like the fashion industry is now an NFT item. The connection between NFTs and the fashion world actually makes a lot of sense, no one buys luxurious fashion items because they are useful, they are purchased for the identity, culture, and exclusivity they represent. NFTs share all this features with physical items in fashion world: they are exclusive, scarce, and represent the identity of a brand. On the other hand, some of these virtual luxury fashion items are as expensive as their physical version. A good example is a virtual hoodie by Gucci which was sold for £19K.
All the new categories of NFT assets introduced depict the potential of the NFT ecosystem and it seems that these digital or tokenized assets aim to change the convectional meaning of asset and ownership. Therefore, various types of NFTs available today may actually promise the bright prospect of the market in future.