Music. Music is a particularly important area for NFTs because web2 pays out very little to musicians – Chris Dixon
Seven types of NFTs 🧵
NFTs are a simple set of blockchain standards that enable genuine ownership in a way that is interoperable, re-mixable, and secure. For the first time, users can now genuinely own digital objects.
We are starting to see different varieties of NFTs emerge. Here are 7 types of NFTs I’m excited about.
■ Art. These can be part of a collection like Punks and Bored Apes, or 1/1 art like you find on sites like Foundation and SuperRare.
People like collecting digital art for the same reason people like physical art, fashion, baseball cards etc – a mix of aesthetics, patronage, status, collecting, and socializing.
■ Access. NFTs make tickets low friction and widely interoperable. You can use them to replace traditional tickets, lowering friction and making them more interoperable. A more native use case is digital access, like a private discord server or video lessons.
■ Game objects. Web2 gamers spend about $40B/year on virtual goods. But users don’t really own those objects, the company does. And the objects cannot interoperate and compose across games.
NFTs allow users to genuinely own the objects, flipping the polarity: games build around user-owned objects instead of users having to depend on the game.
Pioneering games like Axie Infinity and Top Shot kicked off a wave of new web3 game development. Many of these projects should launch next year.
■ Redeemables. Unisocks was a whimsical pioneer of the model where a token could be redeemed for a physical good. This mechanism can be applied to lots of offline goods.
For example, many high-end collectors of physical goods keep their collections in a vault. You could create a digital token representing them, letting them be showcased and traded digitally, reducing friction and intermediaries, and expanding the UX possibilities.
■ Identity. The web2 way of handling personal information has failed. Your sensitive personal information has been hacked many times. Handling passwords is a mess. Long privacy policies and terms of service get changed on a whim.
Contrary to what you might think from reading the news, blockchains like Bitcoin and Ethereum have never been hacked. In web3, users are in charge: there is no centralized database to hack or sell.
■ Web2 databases. Using cryptographic methods and decentralized data stores, you can extend NFTs to anything stored in a centralized web2 database today.
This could be something simple like your viewing preferences or much more advanced things like your entire social graph. This would allow you to switch from one service to another seamlessly – and have full control of your own data, a key part of the web3 vision.
This year we’ve seen an explosion of innovation around NFTs. This will likely continue for many years as it’s still extremely early in the evolution of web3.