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Published on July 14, 2022

The Different Types of NFTs

Utility, Art, Games, and Community: Understanding the different types of NFTs and how they are used.

10 min read

It seems like NFTs came out of nowhere, but they've quickly taken the digital world by storm. It also seems like everyone has a hot take on NFTs and cryptocurrency. There is a lot of noise in this space, so the key for any smart NFT investor is to get down to the core of it.
(mfer #9547 by sartoshi)

What An NFT Actually Is

Non-fungible tokens are highly popular crypto-based tokens. Backed by the blockchain, NFTs are not the represented digital assets themselves (such as artwork or in-game items) but the underlying "receipt," confirmed on the blockchain to belong to one owner—and one owner alone.
This marks a historic change in the digital economy, and finally provides much-needed real-world utility for digital assets. Here’s a full rundown on everything NFTs.

Why Are NFTs Blowing Up Right Now?

For many years, the digital economy has been most valuable to monopolistic entities. This Web2 style of engagement has led to an ecosystem where powerful corporations profit off the data we provide—including the content we create. This centralization vs. the decentralization of blockchain technology is a fundamental difference between Web2 and Web3.
It's common for digital artists to gain popularity but not profit from the digital art they create. Without that essential proof-of-ownership, it's incredibly difficult to say who owns anything on the internet—except for the massive platforms and corporations that host and extract value from all the content.
NFTs are the backbone of a new way of thinking, opening up new opportunities for creators, collectors, and communities. So why are so many people still asking if NFTs have real-world utility and purpose?

NFT Functionality

On the face of it, the world of NFTs seems strange to outsiders. Taking a stroll through the Decentraland metaverse might not feel like second nature to those born before the millennium, and the Bored Ape Yacht Club's popular artwork doesn't exactly look like Van Gogh. Because they don't understand it, many people like to criticize NFTs and most blockchain technology.
Yet, anyone can find a use case for NFTs, because the world of NFTs is broader than many realize. There are different types of NFTs, from NFT art to Profile Pictures (PFPs) to avatars to even photography NFTs and gamified NFTs that flow seamlessly with video games.
If you're seeking to buy or even mint your own work into an NFT, take a look through this list of NFT types and see the IRL utility for yourself. Also, make sure to set up a crypto wallet, as wallets are key to securely acquiring and storing NFTs and other digital assets. You'll also need a crypto wallet, like a Coinbase or Metamask wallet to interact with any NFT market or marketplace like OpenSea. And on the topic of digital security, it's essential to understand how to keep your crypto and digital assets safe when collecting NFTs.

What Are the Different Kinds of NFTs?

Some types of NFTs are more popular or well-known than others, but all of these NFT use cases are ripe for exploration and evolution by the next generation of digital artists and creators. Whatever type of NFT you decide to collect, always do your own research and make sure you are confident in the viability and authenticity of the team, artist, or project.

Profile Pictures (PFPs) and Avatars

This type of NFT project defines the space right now. When buyers purchase a PFP NFT, they gain the right to utilize the image across their own social media, such as Twitter or Discord. This early explosion in the NFT space is most likely connected to the fact that users love to build out their digital identities and join online communities.
In metaverse worlds such as Decentraland or Otherside, the very avatars that players utilize can be owned and verified as NFTs. This layer of customization and ownership appeals to many users and has driven the NFT collections featuring PFPs and Avatars. PFP drops are often the first stage of many NFT launches as well.
Other popular PFP projects include CryptoPunks, Azuki, Doodles, Cool Cats, World of Women, and many more!

One-of-one (1/1) Artwork

When NFT artists first entered the space, many decided to mint as many copies of their art as possible. While this spread their work and name brand, it also diluted value. Now many artists, especially the largest ones in the field such as Beeple, XCOPY, Pop Wonder, Trevor Jones, and Pak, instead offer only one NFT for the pieces they create. Much like the IRL art world, one-of-one artwork enhances the prestige and scarcity of their projects.
pop-wonder-world (1).png
(Distance by Pop Wonder)

Generative Art

In a twist that brings new meaning to the term digital art, generative NFT art is produced by AI algorithms or other automated methods. These NFTs have gained popularity due to the surreal and futuristic art that often results.
Projects such as Autoglyphs and Art Blocks projects like Chromie Squiggles and Fidenzas are the best known, but even the PFPs for Bored Ape Yacht Club and CryptoPunks are the result of generative methods.


As NFTs already resemble old-school collectibles such as sports cards and memorabilia, this is a prominent market for NFTs as well. Turning trading cards into digital assets created a big business for NBA Top Shot, and other big-name IP is sure to follow, from comics to film and more. Additionally, sites like Sorare and Draft Kings capitalize on capturing sports moments and collecting sports memorabilia.

Photography NFTs

Much like artwork, NFTs carve out a whole new arena for photographers. Harnessing the passion of the Instagram age to actually profit from their work, there is so much great work to explore: from photographers like Justin Aversano's portrait work to Michael Yamashita's nature photography to Julie Pacino's narrative photography that has now earned her a major film deal.
(Photo by Michael Yamashita)

Gamified NFTs

In the current state of gaming, especially in mobile and online competitive games like Fortnite and Apex Legends, there are already in-game economy elements: loot boxes, collectibles, skins, and more. With NFTs, however, these items now become much more unique—and valuable. Imagine being able to own and trade all the weapons, tools, apparel, and magical items your character collects in-game?
Developers caught on early, and many unified around the concept known as Play-2-Earn (P2E). While the basis of these games is players earning fungible tokens through play, large NFT marketplaces take root in these ecosystems too. The value of gamified NFTs really depends on the overall game itself: its popularity, user base, and expanding fandom.
Popular games in this field include Axie Infinity, CryptoKitties, Splinterlands, and Alien Worlds. This is a major space to watch in the NFT world, as gaming is already the world's largest and most profitable entertainment industry. With gamified NFTs, now players can get in on the action too.

Metaverse Land, Virtual Land, and Digital Real Estate

Much like gaming, this genre of NFT relies on a larger ecosystem. Collectors and traders that purchase virtual land NFTs are usually speculating that the ecosystem being built will attract a larger audience, thus making their virtual land or real estate more valuable. A few of the more popular digital land NFT projects are Sandbox, Decentraland, Otherside, NFT Worlds, and Meta Mansions.

Music NFTs

The music industry is unfortunately infested with a level of corruption and corporate greed that often leaves the actual musicians with scraps from the profits generated by their work. While we all love Spotify, ignoring the disparity between total streams and what it pays out to artists is difficult. With music NFTs, artists take their rights and earnings back.
Justin Blau, also known as 3LAU, created a massive hit album in 2021 that earned him millions. Now, 3LAU is giving back by creating the platform Royal, where fans can invest directly in their favorite rising artists.
While this space is still young, it seems like a no-brainer that many artists will dive in. Due to the structure of NFTs, even when sold and re-sold, the original artist still earns. Sounds like a better system for the artist and musicians, right? Expect a lot more from music NFTs in the future.

Membership-type NFTs

As NFT popularity increases, many are now wondering if an additional utility is the community itself.
Take Bored Apes Yacht Club: by owning a Bored Ape, you now also gain access to an exclusive, online, global group of like-minded individuals.
Some projects are taking it further, creating Decentralized Autonomous Organizations, or DAOs, to build self-governing communities that can make major decisions usually reserved for the Board of Directors. In this way, NFTs can be like Wonka's Golden Ticket to a whole new reality! A few standout communities that operate on the membership-type NFT model are The Proof Collective and Crypto Packaged Goods.

Domain Names

Instead of paying a recurring fee to some faceless entity for your website domain, why not mint an NFT domain that belongs to you directly? As long as you have a wallet, you can mint domains through services such as Ethereum Name Service(ENS) for .eth domain names or Unstoppable Domains (for .nft, .crypto, and more). Many NFT traders also like to collect and trade domain names on speculation.

IRL Utility

There are even NFT use cases for items outside the digital realm! Let's say you buy your dream house—but now it comes with a virtual deed so you can replicate it in the metaverse! Or do the same with your car or luxury items like fashion or jewelry. There have been talks about companies like Rolex using NFTs to certify authenticity. Talk about IRL utility!
One great example of an IRL NFT project is LinksDAO, a blockchain-based country club designed to democratize access to the previously exclusive country club golfing space. It also acts as an online community that brings like-minded golf enthusiasts together.

Which Type of NFT Should You Collect?

Regardless of your interests, you're likely to discover NFTs making inroads into your favorite industry. However, NFTs are still in their infancy and have not yet met their full potential—not even close. It will only be a matter of time before NFTs infiltrate all aspects of our digital lives, from leisure to education to work. By keeping this groundbreaking technology at the forefront of your mind, you have the chance to keep up with one of the most positive developments in the blockchain space. Find your niche, or niches, and start collecting!

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