Which Types of NFTs Are Right For You?
An NFT (non-fungible token) can serve all kinds of different purposes.
At first, it might seem like the only NFTs available are an endless ocean of digital artwork, memes, and scams. But there’s so much more that NFTs are capable of.
The problem is that there are so many different types of NFTs out there, that it’s difficult to navigate the landscape and find what’s right for you.
It can also be hard to understand some of the technical jargon surrounding NFTs. How do you know exactly what you’re getting when you buy one?
Thankfully, there are some main categories of NFTs that most examples will fall under.
In this article, we’re going to show you 17 types of NFTs and what each one has to offer. Then you’ll be able to find an NFT that serves your specific needs and use cases.
Art NFTs
Art NFTs are the most commonly recognized form of NFTs, and most likely what you think of when the term NFT is mentioned. (You’ve probably even seen a few, even if your NFT 101s aren’t great.)
They include algorithmically generated art, 1 of 1 works of art, profile pictures, and avatars.
Owners of art NFTs often use them as their profile pictures on social media, to brag and flex on others.
Popular examples of art NFTs include artwork by Beeple, as well as projects such as Bored Ape Yacht Club and Cryptopunks. But there’s also original digital art by individual artists, like this rendering of Michael Jordan by artist Otha "Vakseen" Davis III.
Music NFTs
Musicians traditionally lose a large percentage of their potential earnings to record labels and other intermediary parties.
Even streaming services like Spotify take a 30% cut from the profits of artists.
Music NFTs are a way for smaller artists to take back control of their income and require them to pay only a few percent to NFT marketplaces for facilitating sales.
To accomplish this, their music is tokenized into an NFT and provided using blockchain technology.
Platforms like Onlymusix and Sound.xyz allow music producers to sell music NFTs directly to their fans.
Some of these platforms even allow for split payments. That way, earnings for each member of the band can be automatically split off and deposited into separate wallet addresses.
Video game item NFTs
After artwork, video game items are arguably the next-largest current use case for NFTs, and the most well-known “utility NFTs” — NFTs that let you achieve something other than just stake a claim as the owner of a piece of art.
Video game NFTs are most commonly used to add DLC (downloadable content) to existing games. They can take the form of unique digital accessories, skins, characters, and other game assets.
They’re most useful for releasing limited edition items as a way to ensure rarity. However, we may one day see companies releasing entire games as NFTs.
One example of video game NFTs are the characters within the game Axie Infinity.
Some NFT-based games like Axie Infinity are play-to-earn. Some people (especially those located in countries with lower costs of living) are earning a full-time living just from playing.
Trading cards and collectible item NFTs
The market for all kinds of memorabilia and sports trading cards has been growing rapidly within the past few years. It’s a logical match, because collectibility and a belief that items will increase in value over time are also big reasons behind why people buy NFTs.
So it’s no surprise that the NFT collectible market is growing quickly as well. One prominent example is NBA Top Shot NFTs, which have generated more than $230 million from basketball trading card NFTs.
NFT collectibles have different degrees of rarity, just like the physical baseball and Pokémon cards from our childhoods. Many of these rare digital collectibles command a price tag in the thousands of dollars.
There’s also some overlap with other NFT categories, as some trading card NFTs can also be used in video games as well.
Meme NFTs
Yes, there is even a market for meme-related NFTs.
You can buy NFTs of some iconic memes like Nyan Cat. But they’ll really set your wallet back. A Disaster Girl NFT (and original photo), for example, sold for $500,000.
Why anyone would pay that amount for a meme NFT when they could use that money to buy a house instead is beyond us. Although the housing market is also volatile, it won’t drop by 99.99% or more!
Does someone need to tell them that you can just right click and save all the memes you want for free? Although the same argument could also be made for art NFTs, at least you’re supporting an artist for their original artwork (unless it’s computer-generated chimps you’re buying).
At least in the case of the Disaster Girl NFT, the proceeds went to charity.
Screenshots, GIFs, and clip NFTs
Along with meme NFTs, a similar category of NFT captures screenshots or clips of historic events.
Under this category, you’ve got things like an NFT of Jack Dorsey’s first tweet, which sold for $2.9 million dollars (but is now getting offers in the 100s of dollars).
In our humble opinion, this is probably the most unnecessary and silly type of NFT of them all.
But maybe we just aren’t sufficiently cultured NFT connoisseurs to appreciate the genius of a screenshot NFT. If you’ve got millions of dollars to spend on screenshots, happy spending, but for the rest of us, it’s probably a good idea to steer clear.
Domain name NFTs
Back into the realm of NFTs that have actual utility, there are domain name NFTs.
One provider of domain name NFTs is a company called Unstoppable Domains.
For as little as $5, Unstoppable Domains allows you to buy an NFT domain. Unlike traditional website domains, you never have to pay a renewal fee. So the domain is yours forever.
You can use your NFT domain as a website URL, a payment address to make it easier for people to send you cryptocurrency, a universal username to use across different platforms, and more.
Some common NFT domain suffixes are .crypto, .nft, .eth, .888, or .wallet.
Virtual fashion NFTs
Fashion NFTs are wearable digital assets. Their use case today is fairly limited, but they’re likely to become more popular as the metaverse becomes more mainstream.
There’s some crossover between fashion NFTs and things like weapon skins in video game NFTs. However, fashion NFTs may also be used in non-gaming settings.
For example, in a few years, we may be at a point where some companies are conducting job interviews in virtual reality. In that case, you’ll likely want to pay for a premium digital outfit to really stand out from the competition.
Software license NFTs
NFTs can also be used as a substitute for things like software licenses.
Think about when you purchase a program like Adobe Photoshop or Logic Pro. You’re often provided with a long serial number that you need to enter into the program, to verify that you’ve legitimately purchased it.
Using NFTs for such licenses provides more freedom in how the license can be used. If the original creator allows it, these NFTs even allow for resale and transferring the license from one person to another.
At Stack Browser, we’re actually launching an NFT of this type to offer a lifetime license to our early backers, as well as other perks like a 100% unique mouse cursor.
Virtual land NFTs
There’s currently a land grab in the metaverse, the likes of which haven’t been seen in the physical world for generations.
Companies are paying millions of dollars for virtual plots of land, and it’s all facilitated using NFTs.
The logic is that now is the time to buy up prime real estate in the metaverse, where you can set up a location for your business in the future.
You might be able to get the metaverse equivalent of having a shop in Times Square today, which will be worth exponentially more when (or if, if you’re a skeptic) the metaverse starts to take off.
The big risk here is that land is being offered on multiple different platforms, including Decentraland, Sandbox, and others. It’s likely that only one of these platforms will emerge as the clear leader in the metaverse, but today it’s almost impossible to predict which it’ll be.
Event ticket NFTs
NFTs can solve a lot of problems surrounding the sale of tickets for things like sports games, Broadway shows, and other major events.
Compared to paper tickets, NFT tickets are nearly impossible to fake.
Event organizers can also set a maximum price that the ticket can be resold for, which should help to reduce the practice of scalping significantly.
Every time a ticket is resold, the original seller will also get a percentage royalty.
Plus, advertisers can airdrop free perks and rewards directly into the wallets of ticket holders, including their own NFTs.
Real-world asset NFTs
It can be either risky or expensive to sell big real-world assets like homes and vehicles.
If you want to transact with someone directly, you’re at risk of checks bouncing, electronic payments being reversed, and other potential scams.
Alternatively, you have to hire expensive lawyers and real estate agents to help safely facilitate the transaction.
NFTs and smart contracts make it possible for things like mortgages and deeds to be seamlessly created and transferred in a trustless way.
Identity verification NFTs
You probably currently use a bunch of different identities online.
On Facebook, you use your real name. On Reddit, you might be lizardboy4921. And on other sites, you might just sign in with your email.
But several NFT projects are trying to revolutionize what it means to have an online identity.
For example, Yat NFTs act like a universal emoji username. So instead of being lizardboy4921, you might identify as 🦎❤️👍. This string of emojis can be used as a website URL in browsers like Opera, as a payment address for cryptocurrency, and more.
In the future, you might use this kind of NFT as a universal authenticator, in the way that many websites allow you to log in with Facebook today.
Community-based NFTs
Communities can use NFTs to grant access to all kinds of different memberships, subscriptions, and other services.
Many NFTs already grant access to exclusive Discord groups, where the most loyal fans of a project can talk and interact with each other.
They can also be used as an alternative to platforms like Patreon to allow access to premium paywalled content and exclusive live streams.
Fundraising NFTs
If you’re debating a staunch NFT hater, you can point them toward those used for fundraising and charity.
UNICEF and the UN launched their largest-ever NFT collection to mark their 75th anniversary in 2021. The money raised from this collection of 1,000 NFTs was used to help students and schools around the world get internet access.
Proof of Attendance Protocol (POAP) NFTs
POAP (Proof of Attendance Protocol) NFTS are tokens that can be used to record notable life experiences or to prove that you attended an event.
In the future, you might receive an NFT for attending the 2032 Olympics, so you can always prove that you were there.
You can download the POAP app from Google Play or the App Store for free and start collecting your own proof of attendance NFTs today. You can keep them for free within the app indefinitely and only pay to mint the ones you want.
It’s not just for big corporations either. You can create your own proof of attendance NFTs to commemorate birthdays and other personal events for free.
Redeemable NFTs
Redeemable NFTs allow you to submit them back to the creator for a physical item at a later date.
For example, Ceilidhs Whisky is creating 4,000 NFTs that can be redeemed for a bottle of whisky.
Each NFT entitles the holder to a bottle of whisky sitting in a cask in Scotland. They can choose to redeem it whenever they want or allow it to sit in the cask as it ages, appreciating in value.
What types of NFTs are right for you?
NFTs are more than just cartoon profile pictures and avatars. Many NFTs have legitimate applications and uses.
It’s best to think of NFTs as a technology to accomplish a goal rather than just something trendy to own for its own sake.
NFTs can be a lot of things to different people. From a speculative investment to an item in a video game, or a universal identity.
We think it’s best to buy an NFT that grants you access to something tangible that you want and need. For example, a piece of software or a community — if you want to get in on the ground floor and secure a lifetime membership to our groundbreaking spatial browser, read more here.
You’re likely to get a lot more value out of that type of NFT, as opposed to just collecting them with the hope they appreciate in value.
