Abstract

• NFT stands for "non-fungible token" and is a unique digital asset that represents the ownership, authenticity and origin of a specific project or content on the blockchain.

• NFTs can be classified based on their use cases, interactivity, token standards, permissions and rights.

• The industry will also classify NFTs based on their rarity, underlying blockchain network, interoperability and their creators.

• The NFT field is currently developing rapidly, and new use cases will emerge from time to time. As NFTs become more popular, more types of new NFTs may become available.

What is right and wrong Fungible Tokens (NFTs)?

NFT stands for "non-fungible token". It is a unique digital asset that represents a unique item. or proof of ownership or authenticity of Virtual Goods. Unlike cryptocurrencies like Bitcoin or Ethereum, which are fungible and have the same value, each NFT is unique.

NFT is created using blockchain technology, and Ethereum is the most common platform for its creation. They can be bought, sold and traded in various markets.

NFT is popular in various fields because it provides a means of exchange and ownership for both creators and collectors A new approach to digital content. These digital assets come in a wide variety of categories, including art, virtual real estate, game items, and collectibles.

Common classification methods of NFT

NFT can be classified according to various standards Classification. Some common ways to classify NFTs include:

1. Classification by use case

Most Common ways to classify NFTs are based on their use cases, including digital art, music, collectibles, games, and virtual real estate.

2. Classification by token standards

NFTs can be classified according to the token standard they are created with, such as ERC-721 or ERC-1155.

3. Classified by platform or blockchain

NFTs can be classified according to the underlying blockchain network or the market in which the NFT is created or listed.

4. Classified by interactivity

NFT can also be broadly classified based on its interactivity, including static presentation, highly dynamic and interactive digital collectibles.

The industry will also classify NFT according to its rarity, interoperability and its creator. Let’s take a look at some of the most commonly used NFT classification methods in detail.

NFT categories based on use cases

According to different use cases, NFT can be divided into For many categories:

1. Profile Picture (PFP)

Using NFTs as profile avatars first became a trend in 2017 with the release of CryptoPunks created by Larva Labs. The Boring Ape Yacht Club (BAYC) is another widely recognized such collectible, which extends the utility of NFT far beyond PFP to include physical goods and offline club memberships.

2. Digital Art

This is One of the most popular NFT categories. It includes digital painting, illustration, animation and other forms of digital visual art. Artists can tokenize their digital art, thereby proving ownership. Digital art NFTs enable artists to monetize their work in new ways.

3. Music

Musicians can tokenize their music, albums and even exclusive behind-the-scenes content to create NFTs. This enables musicians to sell their work directly to fans, provide exclusive content, and earn royalties on secondary sales.

4. In-game items

In-game items are one of the most popular forms of gaming NFTs, including virtual assets such as weapons, armor, or other equipment that can be used in a specific game. For example, Decentraland wearables provide clothing or accessories that can be worn in Decentraland, the Ethereum-powered virtual world. These NFTs allow players to personalize their characters and enhance their gaming experience.

5. Virtual real estate

This category includes virtual lands, properties and spaces in virtual worlds and metaverses. Users can buy, sell and trade virtual real estate in the form of NFTs.

6. Utility

Utility NFTs are associated with various services and goods, including both digital and physical forms. For example, utility NFTs can grant holders access to physical goods, special trading tools, ticketing services, exclusive online content, and memberships. The possibilities for utility NFTs are huge and can be freely customized by the creativity of the issuer.

In the rapidly expanding world of NFTs, many NFTs have a certain degree of utility and can bring innovative uses. For example, the gaming industry can benefit from utility NFTs by monetizing and distributing game content in novel ways and granting ownership and exclusivity to players.

7. Identity

Identity NFTs are specifically designed to represent and verify unique digital identities. They eliminate reliance on centralized authorities for identity verification, enhance user privacy, and give individuals more control over their personal data.

Other use case-based NFT categories include video and film, domain names, fashion, photography, literature and sports-related products. This list is only a small selection, as the NFT space is evolving rapidly and new use cases are emerging frequently.

NFT categories based on interactivity

NFT can also be interacted based on categories, including static presentations, highly dynamic and interactive digital collectibles.

1. Static NFT

Static NFTs represent digital assets with immutable characteristics, such as images, artwork, and collectibles. These assets remain in their original form throughout their lifetime. CryptoPunks is a prominent example.

2. Dynamic NFT

Dynamic NFTs are digital assets that exhibit mutable properties or change over time, often affected by external factors or data sources. Examples include Chainlink’s VRF NFT, which integrates verifiable randomness generation methods to enable programmatic properties; and the Ethereum world’s encrypted collectible creatures, which have evolutionary properties and will evolve based on the user’s interaction with them and a dynamic vary depending on the breeding system.

3. Interactive NFT

Interactive An NFT is a digital asset designed to enable direct interaction with the asset or its properties, typically in a game or virtual environment. Examples include Axie Infinity’s collectible creatures, which can be fought and bred within the game’s ecosystem, and Decentraland’s virtual tiles, which owners can develop and customize to create immersive digital experiences.

NFT category based on token standards

NFT can also be tokenized Categorize according to currency standards.

1.ERC-721

ERC-721 is a widely adopted Ethereum token standard designed for the creation of NFTs. This standard represents unique and scarce digital assets, enabling the secure ownership, transfer, and management of all forms of digital and physical items.

Examples of ERC-721 NFTs include Cryptokitties, a virtual collecting and breeding game where each CryptoKitty represents a Only digital cats with exclusive characteristics and visual appearance.

2.ERC-1155

ERC-1155 is an Ethereum token standard designed for the creation of NFTs and fungible tokens. ERC-1155 is able to support multiple token types in a single smart contract, so various digital assets can be managed efficiently. It simplifies transactions and reduces the complexity of deploying and managing multiple token standards.

Examples of ERC-1155 tokens include The Sandbox (SAND), a virtual world where users can create and own digital assets and gaming experiences and monetize them.

3. Other blockchains

In addition to Ethereum, many blockchains have adopted their own NFT standards to provide alternatives for innovative use cases or solve scalability and cost issues.

Some popular blockchains worth noting include Flow Blockchain, Binance Smart Chain, and Polkadot.

NFT categories based on rights and permissions

Based on different rights and permissions , NFT can also be divided into several types.

1. Open license

Open-licensed NFTs can grant their holders broad rights and permissions, allowing them to display, copy, modify or redistribute the underlying digital assets under various circumstances. Key features include the ability to freely create derivative works, share with others, and reuse content on a variety of platforms without worrying about significant restrictions or copyright-related legal consequences.

Open licensing promotes a collaborative and co-creative approach, hoping to cultivate creativity within the NFT ecosystem. Examples include CryptoPunks and Bored Ape Yacht Club.

2. Closed license

Closed license imposes strict restrictions on the use, distribution and modification of NFT. Most of them will retain the rights of the original creator or copyright owner of the NFT, aiming to prevent unauthorized copying, commercial exploitation, or modification of the content without explicit permission.

Closed licenses are designed to protect intellectual property and maintain exclusive control over NFT rights, distribution and modifications. Dapper Labs’ NBA Top Shot is a well-known closed-licensed NFT project. The owners of the series can only trade within the ecosystem of the platform and cannot use them for commercial purposes.

3. Partial permission

Partial permission NFTs provide a balanced approach, granting specific rights and usage rights to NFT holders while retaining certain exclusive rights of the original creator or copyright owner. Its main features include allowing limited use and distribution, granting licenses for specific commercial exploitation, or allowing certain types of modifications but prohibiting others.

This type of license is designed to accommodate the various needs and preferences of creators and collectors without compromising original rights. Promote cooperation.

Conclusion

NFT has discovered groundbreaking applications in all walks of life, redefining digital ownership and value creation in the digital age. NFTs can be classified based on a number of factors, such as use case, interactivity, token standards, and licensing.

These various types of NFTs offer numerous novel ways to continue to protect creative expression and redefine digital ownership. The ever-changing landscape of NFTs reveals their transformative potential and demonstrates the power they hold in reshaping the digital world.

However, we must also recognize that there are potential risks with this technology and that it is still in its infancy. As we continue to explore the bizarre world of NFTs, we must remain vigilant and cautious in order to explore its unique potential and reduce possible risks.

Extended reading

• Everything you need to know about NFT 7 Things

• How to Create an NFT

• The 10 Most Expensive NFTs Sold So Far

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