NFT Classifications... what for?

The NFT division  aims to organize the tokens and designate their most important characteristics. The most common criteria by which tokens are divided are: by practical use, by standard, by blockchain platform or network, by interactivity, or by rights and licenses. The first one is the most common way of classification. Specific practical applications include digital art, music, collectibles, games and virtual real estate. Categories related to the token standard in which NFTs are created are, for example, ERC-721 or ERC-1155. Another type of classification is related to the underlying blockchain network or marketplace where NFTs are created or listed. Interactivity, on the other hand, is related to the issue of the static or dynamic nature of tokens.

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Classification – application and standard

Token categories related to practical uses are: profile pictures, digital art, music, gaming items, virtual real estate, utility, and identity. The trend of setting NFTs as profile pictures began to gain traction with the rise of CryptoPunks in 2017. The art category includes, m.in, digital paintings, illustrations, animations, and other forms of digital visual art. Musicians, in turn, can tokenize music, albums, as well as behind-the-scenes content. Digital collectibles used by gamers are one of the most common categories. They include resources such as weapons, armor, or other pieces of equipment. Virtual real estate includes land, real estate, and virtual spaces.

Utility NFTs are linked to a variety of services and goods, both digital and physical. Those related to identity will represent and verify unique digital data. When it comes to the token standard, the widely adopted one is ERC-721. It allows for the mapping of individually distinct, digitally scarce assets, and provides the ability to securely own, transfer and manage various forms of digital and real-world items on the Ethereum blockchain network. There is also the ERC-1155 standard designed to create both NFTs and fungible tokens. Apart from Ethereum, there are also other blockchain networks with their own standards. The Art Lounge Plus information portal can help people starting their adventure with NFTs to find their way around these issues.

Classification – Platform and Interactivity

NFTs can be classified according to the underlying blockchain network or marketplace on which tokens are created or listed. Online platforms are decentralized places, and some of the most well-known include, m.in: OpenSea, Rarible, SuperRare, Nifty Gateway, Foundation, and Binance NFT. Classification by interactivity includes static, highly dynamic, and interactive digital collectibles. The former are representations of digital assets with immutable properties, such as paintings, artworks, and collectibles. Throughout their existence, they retain their original form.

Dynamic assets have variable properties to represent digital assets with immutable properties, such as paintings, artwork, and collectibles. Interactive NFTs allow you to interact directly with an asset or its properties, often in games or virtual environments. The latest news on this topic will be provided  by the portal on digital collectibles. These include, m.in, Art Lounge Plus. Opinions about the portal among users are mostly positive.

Classification – Rights and License

In terms of law and licensing, NFTs are divided into open, closed, and partial licenses. Open-licensed tokens provide holders with broad rights and permissions, e.g., to present, copy, modify, or redistribute the underlying digital assets in different contexts. This allows the user to create derivative works, share them with others, and reuse the content across platforms without significant restrictions or legal consequences. Closed licenses already come with strict restrictions on use, distribution, and modification. Their main feature is to retain the rights of tokens with the original creator or copyright holder without the possibility of unlawful reproduction, commercial use and alteration of the content if they do not give their consent. Closed licenses protect intellectual property and maintain exclusive control over the rights, distribution, and modification of NFTs.

The compromise is partial licenses, which grant certain rights and usage permissions to NFT holders, while retaining some of the exclusive rights with the original creator or copyright holder. Characteristic in this case is the authorization of limited use and distribution, the granting of permits for certain commercial uses, or the authorization of certain types of modifications while prohibiting others.

NFT classification  allows you to organize tokens according to their distinctive features. Issues related to digital assets are still new, so you have to take into account the dynamic changes taking place in this area. Information about current trends will be provided by a modern graphic portal.