a16z partner Chris Dixon: An Overview of the Seven Types of NFTs

Author: Chris Dixon, a16z Partner

Compiled by: Rhythm

a16z partner Chris Dixon summarized the seven types of NFTs currently available on Twitter, which include:

1. Art: These can be collectibles like Cryptopunks and "Bored Apes" BAYC, or digital artworks on platforms like Foundation and SuperRare. The reasons people enjoy collecting digital art are the same as why they appreciate physical art, fashion, baseball cards, etc. — NFT artworks are a mix of aesthetics, patronage, status, collecting, and social interaction;

2. Music: Music is a particularly important area for NFTs, as musicians earn very little in the Web 2.0 world. A recent series of music NFT projects includes arpeggi.io, Sound.xyz, and royal.io;

3. Access: NFTs make ticketing use cases more convenient and interoperable. NFTs can replace traditional tickets, with a more native use case being digital access, such as private Discord servers or video courses;

4. In-game Items: Web 2 gamers spend about $40 billion a year on virtual goods, but they cannot truly own in-game items, which are owned by game companies and do not support cross-game interoperability and combinations. NFTs allow users to truly own in-game items, and future games may be built around items owned by users rather than relying on the game itself. Games like Axie Infinity and NBA Top Shot have already sparked a Web 3 gaming boom, with more play-to-earn games expected to launch in 2022;

5. Redeemable Physical Goods: Unisocks is an innovative NFT use case worth noting, where tokens can be exchanged for physical goods. This mechanism can be applied to many offline products; for example, many high-end collectors of physical goods store their collections in vaults. You can create a digital token representing them, allowing them to be showcased and traded digitally, which not only eliminates intermediaries but also enhances user experience.

6. Identity: The way personal information is handled in the Web 2 space is ineffective, with sensitive personal information easily hacked and password management being a mess. Large companies can arbitrarily change privacy policies and terms of service, while blockchains like Bitcoin and Ethereum have never been hacked. In Web 3, identity information is the responsibility of the user: there is no central database to hack or sell, meaning systems like ENS can be used to log in and identify oneself in an interoperable way;

7. Web 2 Databases: By using cryptographic methods and decentralized data storage, you can extend NFTs to anything currently stored in centralized Web 2 databases. Web 2 databases may handle simple things like your data access preferences or more complex matters like your entire social graph. NFTs enable you to switch seamlessly from one service to another — and have complete control over your own data, which is a key part of the Web 3 vision.

In 2021, we saw explosive growth in innovations surrounding NFTs, a trend that may continue for many years, as we are still in the early stages of Web 3 development.