Reasons You Shouldn’t Laugh at NFTs—and Their Utility

The NFT boom deserved some of the ridicule it received. Prices became detached from usefulness. Projects sold vague promises as road maps. Scammers exploited urgency, celebrity, and technical confusion.

But laughing at speculation is different from dismissing the technology underneath it.

An NFT is not automatically art, an investment, or even a JPEG. At its simplest, it is a uniquely identifiable token whose ownership and transfers can be recorded on a blockchain. The ERC-721 standard gives wallets, applications, and marketplaces a common way to recognize and transfer these tokens.

That common language is the more durable idea. The question is not, “Will this NFT go up in value?” It is, “What useful right, access, or experience does this token represent—and is a blockchain actually the best way to deliver it?”

NFTs can make access portable

Most online access is trapped inside a company database. Your membership, ticket, or loyalty status works only because that company recognizes your account.

A token can function differently. A brand can issue a pass that a customer holds in a wallet and uses across participating websites, events, or digital spaces. The token might unlock a private product release, an annual experience, a members-only archive, or benefits that continue when an item is resold.

The U.S. Copyright Office and USPTO’s joint NFT study identifies tickets to exclusive events among current and potential NFT uses. The advantage is not the acronym. It is the ability to verify a specific entitlement without forcing every participating experience into one centralized customer account.

For culture and fashion brands, that could turn a purchase into an ongoing relationship instead of a completed transaction.

They can add a verifiable history to products

NFTs can also support provenance: a visible record of when a token was issued and how it moved between wallets.

That can matter for limited-edition fashion, collectible design, art, authenticated resale, and products with service histories. The same U.S. government study cites authentication for luxury goods as a potential use. A brand-issued token could accompany a physical object, document its origin, record repairs, or unlock owner services.

However, blockchain data cannot magically verify the real world. A trustworthy system still needs an authorized issuer, a secure connection between the token and the physical product, reliable metadata, and a clear process for theft, returns, or replacement. A counterfeit item attached to a legitimate token remains a counterfeit item.

The ledger preserves the record it receives; it does not guarantee that the original claim was true.

Digital products become easier to recognize and transfer

The ERC-1155 standard allows one smart contract to manage multiple types of fungible, semi-fungible, and unique tokens. It was designed partly for environments such as games, where creators may need thousands of item types.

That model extends beyond gaming. A digital fashion item might be issued in a limited quantity, used inside multiple compatible experiences, upgraded after an event, or redeemed alongside a physical product. An e-commerce purchase could include a transferable digital twin, access pass, or collectible layer.

None of this guarantees interoperability. Another platform must intentionally support the token and its media. Still, open standards make cooperation between participating platforms more possible than an item locked permanently inside one company’s private inventory.

NFTs can coordinate creator payments—but not guarantee them

NFTs introduced a compelling creator-economy idea: program royalty information into a token so that creators can participate when it is resold.

The ERC-2981 royalty standard gives compatible systems a standard way to identify a royalty recipient and calculate an amount. This can make payment information easier for marketplaces to read and can help creative collaborators document how revenue should be divided.

But “programmed” does not mean “guaranteed.” ERC-2981 explicitly states that royalty payment is voluntary, and a marketplace that does not implement the standard may not pay it. The Copyright Office and USPTO similarly found that resale royalties can be bypassed through unsupported marketplaces or off-chain sales.

The useful part is transparent coordination. The dangerous part is advertising an unenforceable royalty as permanent income.

Owning the token does not mean owning the copyright

This distinction should be printed clearly on every NFT product page.

Transferring an NFT transfers the token. It does not necessarily transfer the associated image, physical object, trademark, or copyright. The U.S. government’s joint study explains that ownership of the token is not automatically ownership of the underlying intellectual-property rights; a separate agreement is ordinarily needed.

Many NFT-associated files are also stored off-chain. The blockchain may contain a link to artwork hosted elsewhere rather than the artwork itself. If that storage disappears or the link changes, the token can remain while its media becomes unavailable.

Responsible projects should disclose:

• What the buyer receives
• Which commercial or personal-use rights apply
• Where the associated files are stored
• Whether the token or benefit is transferable
• How redemption, returns, and lost-wallet situations work
• How long the issuer intends to support the experience

“Ownership” is not a complete product description.

The risks are real

The U.S. Treasury’s 2024 NFT risk assessment found NFTs susceptible to fraud, scams, and theft, citing weak cybersecurity, intellectual-property problems, price volatility, and inadequate controls on some platforms. The FBI has also warned about fake NFT announcements that direct users to wallet-draining smart contracts.

Wallet compromise, phishing, faulty code, unclear licenses, disappearing platforms, and irreversible transactions are not minor details. They are product-design responsibilities.

Environmental criticism also requires precision. Blockchain energy use varies by network. Ethereum’s 2022 transition to proof-of-stake reduced its energy consumption by approximately 99.95%, according to Ethereum’s documentation, but that does not make every blockchain or application equally efficient.

Not every product needs an NFT

A normal database is often faster, cheaper, and easier for customers. If a benefit is neither transferable nor useful outside one company’s platform, tokenization may add complexity without adding value.

Privacy-sensitive credentials may also be better served by systems designed specifically for selective verification, such as the W3C’s Verifiable Credentials Data Model, rather than a publicly visible token.

An NFT makes the strongest business case when public provenance, user-controlled possession, transferability, or cross-platform verification materially improves the experience.

Laugh at the hype, not the capability

NFTs are not a shortcut to cultural relevance, guaranteed royalties, or investment returns. They are a technical format for recording and moving distinct digital tokens.

Used carelessly, that format can package speculation and confusion. Used deliberately, it can support memberships, tickets, authenticated goods, digital products, creator coordination, and experiences that continue after checkout.

The next meaningful phase of Web3 will not be built by pretending the last one was flawless. It will be built by separating durable utility from hype—and giving people a clear reason to use the technology at all.

This article discusses technology and brand strategy. It is not financial, investment, or legal advice.