So, what types of NFTs are there? 

The in-a-nutshell answer is thirteen — these thirteen types: 

1. non-physical art NFTs
2. collectible NFTs
3. sports memorabilia NFTs
4. video game NFTs
5. virtual land NFTs
6. meme NFTs
7. tweet NFTs
8. domain name NFTs
9. music NFTs
10. literary NFTs
11. physical real estate NFTs
12. physical art NFTs
13. functional NFTs

However, in this post, I’m going to go beyond this in-a-nutshell answer and explain in detail what each of these different types is about, which of them really have traction in the market, where you can buy them, and, also very important, what it is that you are really getting when you buy them.

I’m going to start with the six types of NFT that are already moving significant amounts of money right now. We can call these the established NFT types.

After reviewing those established categories, I’ll move to what I call the ‘tentative’ NFT types. Some of these seven tentative categories are still at the experimental stage, while others are already being actively traded but in such small volumes that can still be considered tentative.

So, based on this, we can divide the thirteen NFT types into these two groups:

The six established types:

1. non-physical art NFTs
2. collectible NFTs
3. sports memorabilia NFTs
4. video game NFTs
5. virtual land NFTs
6. meme NFTs

The seven tentative types:

7. tweet NFTs
8. domain name NFTs
9. music NFTs
10. literary NFTs
11. physical real estate NFTs
12. physical art NFTs
13. functional NFTs

Let’s see now what each of them is really about!

The six established types

1. Non-physical art

I intentionally use non-physical art as an umbrella term that includes all the art that is currently sold on the NFT marketplaces, not just digital art. This comprises true digital art but also traditional photography, traditional illustration, and even photos of actual physical canvas paintings.

As of July 2021, non-physical art NFTs have moved more money and grabbed more headlines than any other NFT category, and the most expensive NFT ever sold across all NFT types belongs to this category. It was an NFT minted by the artist Beeple and sold in March 2021 for 69 million dollars.

Non-physical art NFTs have various subcategories. For example, Beeple’s $69 million NFT is a collage belonging to the subcategory of digital art.

By the way, digital art simply means any artwork created with a computer. It doesn’t say anything about how an artwork will look; some pieces of digital art can look like they were made with a computer but many could be mistaken for a traditional canvas painting or for an illustration. 

Digital artists are the community that has most rapidly adopted NFTs to sell their work. The reason for this is because, before the appearance of NFT certificates, the artists who created artworks on computers struggled to sell them in the traditional art gallery circuit. NFTs have solved this problem for these artists, allowing them to make a living (or even a great living) off their artwork, and so this community is flocking to NFTs with absolute enthusiasm. (I’ve published an entire guidebook on the topic of art NFTs and crypto art if you are interested in the nitty-gritty.)

However, as I said above, under this non-physical art category, you can also find many artworks that are not digital art because they weren’t created with a computer. Notably, photography and illustration. Like digital artists, photographers and illustrators are also flocking to the NFT world for a similar reason to digital artists. That’s because, photographers and illustrators have always shared with digital artists the difficulty of selling their creations in the traditional art gallery/art fair/auction house circuit. 

Another subcategory of art currently sold on NFT marketplaces is traditional canvas art sold as a digital file. To put it simply: selling photographs of actual physical paintings that were created on a canvas. 

This might sound contradictory with what I just said that artists who use the traditional canvas medium have the possibility of selling their artwork in art galleries. However, the fact that canvas artists have that possibility doesn’t automatically mean that they succeed at it. There are only so many good slots in the best galleries, fairs, and auction houses, and there are many, many more canvas artists who want in. As a result, many of these traditional-medium artists are also seeing in NFT marketplaces an opportunity to achieve their dream of living off their creations.

The curious thing is that, although the non-physical artworks that you can buy on NFT marketplaces have these different origins, very often you can’t tell them apart. For example, many people selling photographs of their oil painting canvases won’t necessarily say that there’s also an oil painting original of that digital image they are selling, and from looking at it on a screen, you can’t always notice the difference between a digitally-created artwork and a canvas-created artwork. 

Another example: many digital illustrations that belong to the category of digital art can look indistinguishable from illustrations that were made on paper. So, at the end of the day, how a piece was originally created is not extremely decisive and what matters most is the visual potency of the art. But, as an investor, it is useful to know that the art you see on those NFT marketplaces can have these very different origins.

2. Collectibles

The digital collectible category is now relegated to second place by sales volume after art NFTs, but, a few years ago, collectibles were the category that started it all. The first fully functional NFT project ever launched in the crypto space was a digital collectible series called CryptoPunks. That was back in 2017 when very few people had heard of NFTs. Another of the oldest NFT projects was also a collectible: CryptoKitties, which became very popular during the boom and crash of the crypto space in 2017 even being featured in mainstream newspapers and national television, which at the time was quite a feat.

While CryptoKitties are not as popular today as in their 2017 heyday (probably because their supply is not as limited as that of other collectibles), CryptoPunks have become the number one investment in the NFT collectible space. There are only 10,000 CryptoPunks in existence and they are some of the most expensive NFTs out there, with a punk selling for a record 7.6 million dollars in March 2021.

The collectible scene is burgeoning and, every few days, new crypto collectible projects are launched with ingenious marketing strategies, and some of them (like Hashmasks recently) manage to gain a lot of traction.

Note that the boundary between art NFTs and collectible NFTs is often blurry. For example, CryptoPunks are collectibles but they could also be seen as belonging to a type of digital art called pixel art. Meanwhile, Hashmasks was a collectible project that intentionally wanted to be a bridge between art and collectibles bringing onboard many different artists to create the images for their collectible tokens.

3. Sports memorabilia

Sports memorabilia are in reality a subtype of collectible, but they deserve their own category because their client base and market inner workings are very distinct from the rest of collectibles.

So far, the largest and most successful project in this category is NBA Top Shot, which started in 2019. The idea behind this project is very smart. Instead of just copying the traditional sports trading card model in a digital form, they provide something that a physical sports card could never have: video. 

Each collectible card of the NBA Top Shot project is a video highlight showing a famous play or shot in the history of the NBA. The success of NBA Top Shot has been outstanding. With overall sales of over half a billion dollars as of July 2021, NBA Top Shot has become the NFT project that has the highest volume of sales across all NFT categories (followed by the NFT game Axie Infinity with also over half a billion dollars). 

Interestingly, NBA Top Shot was created by the same team responsible for the success of CryptoKitties in 2017: Dapper Labs. So these guys are worth watching because they clearly know what they are doing. In fact, the next big thing in sports NFTs could be still another project created by them: a series of collectibles for the UFC. And, considering the massive fan base that the UFC has, these collectibles could really explode when they come out. Watch that space if you are interested in investing in sports collectibles.

Another successful sports collectible project is Sorare, which is catered to the fans of soccer, or as it is known in Europe, football. Sorare is special in that it is not just a set of collectible cards but it is also a fantasy sports game that can be played with those same cards.

Lastly, there is a fourth important sports NFT project for fans of the MLB baseball league. It is called Topps MLB, and is backed by Topps (Topps is the most important company in the world of traditional physical sports cards). 

4. Video game assets

A few months back, art and collectible sales dwarfed video game assets. As of July 2021, this category has finally become one of the most successful NFTs. This is mainly due to Axie Infinity massive adoption over the past couple of months.

This has beginning to fullfil the prophecy made by many experts that one day video game NFTs would revolutionize the gaming industry. The reason why there’s so much investor expectation for this category is that traditional video game consumers are already familiar with microtransactions because they frequently buy things inside traditional video games. (For those not familiar with video games, one common example of these microtransactions is buying a special weapon that allows you to cause more damage to your enemies in a game.) So, thanks to this already existing familiarity with in-game microtransactions, adoption of video game NFTs is expected to grow rapidly.

For now, all video games NFTs that exist are related to games specifically created for the purpose of supporting an associated exchange of NFT goods. We can call these ‘crypto-native’ video games. But over time, it is expected that even traditional video games will use NFT platforms to commercialize their own in-game assets.

At present, the most popular video game that makes extensive use of NFTs is Axie Infinity. In this game, you use NFTs to buy Pokémon-style creatures that you can use to play inside the game but also with which you can speculate on the marketplaces as they fluctuate in value. As of July 2021, Axie Infinity has become the second best-selling NFT project of all time (The first one is NBA Top Shot) with total sales volume of over half a billion dollars.

Other popular games are Alien Worlds, in which you can buy many different NFTs (weapons, tools, avatars, minions, and lands), and The Sandbox, which, although still not fully playable, already offers its own NFT marketplace. That marketplace has already seen some good sales volume even before the game is active. The Sandbox is creating this anticipation because it is seen as crypto equivalent to the super successful traditional video game Minecraft.

5. Virtual land

This category partially overlaps with the previous one because many crypto video games also sell land. But the category of virtual real estate encompasses more than video game land; it also includes the land from general-purpose virtual worlds (or as many like to call them now ‘the metaverse’).

General-purpose virtual worlds are distinct from video games in the sense that, although you can use them as games to some extent, their principal purpose is social. They want to partially replace physical reality and the social activities that can be carried out in the physical world.

If they succeed, they will become a parallel immaterial version of our planet in which activities like meeting people, conducting business, teaching, and learning, doing political activism, displaying art, or placing advertising could take place. Imagine the $$$ potential for the owners of the land in such a place.

At present, no virtual world (crypto or non-crypto) has ever gained the traction of say, a Facebook or a Twitter, but the reward for the first virtual world that ever gets that kind of user adoption will dwarf the size of any other social media company that came before.

The most famous virtual world in the crypto space is Decentraland. It is still rather unpolished technically and the user adoption is lacking, but it is gaining a lot of traction as a speculative investment, with investors betting on its future adoption by buying plots of land, which, for now, however, remain mostly deserted. 

6. Meme NFTs

I was considering including this category inside non-physical art because, ultimately, memes are just another type of digital art. But memes also have such a distinct role culturally that they can be analyzed as a grouping of their own.

Even though the crypto market and the NFT market have been in a slump since May 2021, meme sales haven’t stopped and, actually, the largest meme sale of all time was made after that slump began: In June 2021, the original Doge meme sold for 4,4 million dollars on the Zora platform. 

Other famous memes that have sold for staggering amounts in 2021 have been:

Pepe the Frog which sold for nearly $1 million, Nyan Cat which sold for $580,000 Disaster Girl, which sold for $473,000, Overly Attached Girlfriend, which sold for $411,000.

Also, this category made it into the established group by a narrow margin. The reason why meme NFTs are not completely established is that many of the big meme purchases were made by one single person: a collector who goes by the nickname of ‘3F Music.’ So this can be seen as problematic for the category’s real investment potential. Yes, many big sales are being made — but are these prices sustainable if that one collector leaves the market?

The seven tentative types

So now that we’ve seen the categories that already have traction, let’s move to the categories that are still in the tentative or experimental phase.

7. Tweets

Some people will be surprised to find tweet NFTs classified as tentative when the tweet category has already made so many headlines. But I’ve placed it here because all those headlines were about one single sale: Jack Dorsey’s tweet. That’s the only big sale in the entire NFT tweet space in all its (short) history.

That transaction took place in March 2021 and consisted of the sale of Jack Dorsey’s first-ever tweet (for those who don’t know him, Jack Dorsey is the founder and CEO of Twitter). This NFT sold for an eye-popping 2.9 million USD. 

But apart from that mega sale, this space hasn’t seen any other big transactions. For example, if you go to Valuables by Cent (the marketplace where tweet NFTs are bought and sold) and you order all the past transactions by sales value, you get this:

As you can see the first sale listed (Jack Dorsey’s) at 2.9 million dollars is miles away from the second one at just 23,000 dollars. And, from there on, the prices go downhill very quickly: only 2 sales in the 20k range, only 3 sales in the 10k range, only 6 in the 10k-to-5k range, and so on. 

This doesn’t mean that tweet NFTs can’t become a thing in the future; the world has seen weirder things (just think of the joke-coin Doge becoming in may 2021 the 4th most valuable crypto coin by market cap just because Elon Musk found it cute and kept posting on social media about it). So it’s definitely not impossible to imagine tweet NFTs becoming a booming investment asset in the future.

For example, some people think that, some day, every tweet with historical significance will be very valuable (like a politician’s tweet announcing that they’re running for president, a big celebrity coming out of the closet, etc).

Another type of tweet that could become a thing in the future is tweets in which something appeared for the first time; such as the first tweet in which the word ‘love’ was ever displayed, the first tweet in which the word ‘money’ appeared, etc. In fact, a budding example of this occurred recently: it was the sale of the tweet in which Chris Messina invented the hashtag. That tweet sold on Valuables by Cent for $10k. And, if tweet NFTs end up becoming more than a passing fad, then tweets like Messina’s could be resold for much more money in the future.

8. Crypto Domain Names

Crypto domain name NFTs aren’t still very popular. And even the few people who have heard of them frequently confuse them with regular domain names. This is not correct. What you are buying when you acquire one of these NFTs is a new type of domain name called a crypto domain. 

Crypto domains, like their older brothers, can be used to host websites (although browser support is still not quite there yet, read below) but they can also be used as a sort of crypto banking address in which you can receive money. For example, imagine you buy the crypto domain mycoolwebsite.crypto, then, you could use it for both hosting a website and for letting people who transact with cryptocurrencies send you money directly there. 

At present, the most common crypto domain endings are .eth and .crypto.

9. Music

Music NFTs are like tweet NFTs in the sense that they have made a lot of media noise thanks to a couple of high-profile sales. But also, like tweet NFTs, overall they are still hardly moving any money at all and they don’t have specific marketplaces in which they can be bought and sold.

The most high-profile music NFT release was Kings of Leon’s latest album ‘When You See Yourself’ in March 2021. It was hyped as the first time an album was released as an NFT. But that’s not exactly right. What truly took place was that, a few days before they released their new album via the traditional commercial channels, they made a pre-release of a few copies on an NFT marketplace.

So it was not an NFT exclusive by any means. What they sold on the NFT marketplace was a limited edition (twenty copies at $50 each) of their album with the corresponding NFT certificate of authenticity. In addition to those, they also sold some NFTs for accompanying memorabilia, and a set of NFTs for special golden tickets guaranteeing life-long front-row seats in their concert tours. Selling all these different NFTs they made a total of $2 million, which is pretty good for the music NFT category. So far it has been the most high-profile music NFT from a media-coverage standpoint because it was the first time (or almost the first) that an album was made available in that way.

Another musician who also earned a lot of press attention (and dollars) was singer Grime. She was also one of the first musicians to the NFT party, but what she released was more in the realm of video art NFTs than that of music NFTs. Her video creations had some background music, but the focus was on the 3D animations and, in fact, they were sold on an NFT art marketplace.

10. Literary

Probably literary NFTs are the category on this entire list with the least traction at the present moment. However, I can see how this could change in the future. Especially with poetry. NFTs were embraced by the digital art community because they allowed them to monetize a product that they couldn’t easily monetize before. Well, I think NFTs can do the exact same thing for the least monetizable of all literary forms ever: poetry. 

You can probably count with your two hands the number of people in the world who actually live off of writing poetry. Perhaps even with just one hand. By turning poems into unique collectible products, the same could happen to poems that has already happened to digital images, memes, and tweets. Because, in the same way that people are buying the ‘bragging rights’ to owning skillful images, why not buying the bragging rights to owning skillful poems? 

As for other forms of literature, like novels, short stories, or non-fiction, I can see how short stories could also have the potential for tokenization since their writers also make hardly any money from them at present. However, I don’t see them getting as much traction as poetry due to their length. 

Regarding full-length novels and other types of books like non-fiction works, there’s no reason why you couldn’t sell a whole book as a unique ‘autographed’ book NFT. But so far this hasn’t become a thing, and the most common use case for writers has been to sell ‘bonus’ material in the form of NFTs. 

There’s still no famous fiction author, however, who has released bonus material as NFTs. As of today, the only author who has gotten significant media coverage about their NFTs was the non-fiction author Anand Giridharadas who sold several bonus-material NFTs related to his book ‘Winners Take All’.

However, the bonus material subcategory has a lot of potential in my opinion. For example, I can easily see how the bonus NFTs of a famous novelist like J K Rowling could sell for a small fortune. Memorabilia like exclusive photos of the napkin notes she made when she was planning Harry Potter, the alternative book covers she discarded, the chapter she removed from a Harry Potter installment, the first unedited draft of Harry Potter, or an exclusive voice recording of her reading her novel, the list is unending and they would all very likely fetch crazy prices.

But the product that could really be the star collectible related with author NFTs is the unabridged versions of their manuscripts. Due to printing and commercial constrains, many novels are significantly shortened by the publishing houses before being released. Die-hard fans of an author will surely want to get their hands on these original drafts and unabridged versions of their beloved novels, even at premium prices.

11. Physical Real Estate

The tokenization of physical-world assets like physical real estate or physical art (see below) is still in its infancy. For example, there’s not a single platform dedicated to buying and selling them and not even the generalist marketplaces have a section for them. However, a few tentative projects on the space of physical real-estate tokenization have already begun.

But first of all, what is tokenization? In simple terms, to tokenize is to attach an NFT certificate to something to make it sellable in the crypto space. In this way, you can sell a real house or a real plot of land that really exist in the physical world by buying and selling the associated NFT that will act as the proof of your ownership (in these cases NFTs become a sort of fancy techno property deeds). 

However, the tokenization of real-world assets has a second side and that is the reason why this category has so much potential: Instead of selling a house or plot of land as a single entity, you can break them down into multiple NFTs and therefore create something similar to shares for that property. This will enable small investors to invest in very expensive real estate. 

For example, very few people can afford to buy an entire building on Manhattan’s 5th avenue or one of those huge Iowan plots of farmland. By tokenizing and breaking down their ownership, anybody could invest in them. And what’s more, you won’t just profit from your NFT when you re-sell it at a higher price—while you hold your NFT you will also receive the proportional rental profit that the building is making or the proportional farming profit that the land is generating.

12. Physical Art

This category is very similar to physical real estate in how it works: you can tokenize any existing piece of physical artwork by linking its ownership to an NFT certificate. But you can also break its ownership down into many sub-units and attach each portion to a different NFT certificate (and no, the actual physical artwork won’t be broken down, of course) that can be sold individually as if it were a share in a company. 

The tokenization of art could change the world of art investing radically. First, it would allow the average Joe or Mary to invest in super expensive but very profitable artists like Picasso or Leonardo Da Vinci. Second, it would bring enormous liquidity to the art world. 

In the current world of art investment, it is not easy to find a quick buyer for a very expensive work of art, no matter how reputed and scarce the artist is, because there are only so many billionaires and institutions with that kind of purchasing power looking to buy at any given time. But if costly artworks could be broken down into shares and sold on exchanges, then, you can easily see how revolutionary that would be. Art investing would become similar to stock market investing.

13. Functional NFTs

I was tempted to leave functional NFTs out of this list because functional NFTs are an entire whole family of categories rather than one single type. But they all do share one thing in common and that thing differentiates them from the previous 12 types we’ve seen: you can’t use functional NFTs as an investment. They are not assets. 

Functional NFTs are NFTs that are used because their technical characteristics are useful for simplifying bureaucratic or technical transactions rather than because of their value as an investment asset. Some of the many examples that could be mentioned are medical record NFTs, event ticket NFTs, or academic degree NFTs.

Functional NFTs are a very experimental area with very few projects already implemented. But the potential is big and many common activities that require identifying somebody or something in a unique and unforgeable way can benefit from the NFT technology. However, if you are or want to be an investor, this category is not very relevant to you.

---

So these are the 13 types of NFT that exist at present (July 2021). Before finishing this report, I want to say that I’ve left out of this list a few ‘micro types’ of NFTs because they are so specific that they don’t deserve their own category (or at least not yet). For example. The Decentraland virtual world is selling usernames as NFTs. You can create a username when you open an account on Decentraland and then speculate with that name on OpenSea in the hope that due to its originality or significance it will gain value over time.

Another ‘micro type’ of NFT that doesn’t yet deserve a category of its own is historic pieces of programming code. So far, the most significant sale in this category has been the very source code of the world wide web. In June 2021, it was sold by its creator, the star-developer Tim Berners-Lee, for a staggering 5.4 million dollars (and if it hadn’t coincided with the current market slump it could have fetched even crazier prices — bad timing!). Interestingly enough, this piece of code, which represented the beginning of the end of the brick-and-mortar monopoly over culture, was sold via the brick-and-mortar auction house Sotheby’s instead of an online NFT marketplace.

And that’s all for today. I hope you enjoyed the details in this report. If you want more quality insight on the NFT ecosystem, you can join my loop, get one of my NFT books on Amazon or follow me on Twitter.

Invest safely!