The use cases of NFTs

An NFT proves that a given wallet owns a given token, and it lets that token move from one owner to another without a middleman. Everything else depends on what the token is linked to and on what the project behind it promises. Here are the main ways NFTs have been used since 2017, from the best known to the more practical ones.

Digital art

Art is the use that made NFTs famous. Before NFTs, a digital file could be copied endlessly and there was no simple way to own "the original". An NFT gives a digital work a certificate of authenticity and a public history of its owners.

• One of one works sold by artists such as Beeple, Pak, XCOPY or Tyler Hobbs, on platforms such as SuperRare, Foundation or at auction houses.
• Generative art, where the collector mints the piece and an algorithm creates it at that moment. Art Blocks made this style popular with series such as Fidenza or Chromie Squiggle.
• Creator royalties: marketplaces can pay the artist a percentage each time the work is resold. This was one of the big promises for artists. Since 2023, several major marketplaces have made these royalties optional, which shows that they depend on the platforms and not only on the token.

Museums have followed. Institutions such as the Centre Pompidou, LACMA and MoMA have added NFT works to their collections.

Collectibles and profile pictures

Collections of thousands of unique characters, such as CryptoPunks, Bored Ape Yacht Club, Azuki or Pudgy Penguins, are used as profile pictures and as a sign of belonging to a community. Some of them go beyond the image: holders may get access to events, merchandise or, like Bored Ape owners, commercial rights to their character. Pudgy Penguins, for example, turned its characters into toys sold in retail stores.

Sports fans have their own version: NBA Top Shot sells short video moments of famous plays, and many football clubs and leagues have released digital cards.

Games and virtual worlds

In a game, an NFT can represent an item, a character, a skin or a plot of land that the player really owns and can sell outside the game. Early examples include CryptoKitties, Axie Infinity and Gods Unchained. Virtual worlds such as Decentraland and The Sandbox sell land and wearables as NFTs.

The results are mixed. The "play to earn" model, where players earn tokens by playing, attracted millions of users in 2021 and then collapsed when token prices fell. Some big publishers tried the technology, while Valve banned NFT games from Steam in 2021 and Mojang banned NFTs from Minecraft in 2022. The games that last tend to treat NFTs as an optional feature, not the main reason to play.

Music and film

Musicians use NFTs to sell albums, limited editions, backstage access or a share of streaming income directly to their fans. 3LAU, Kings of Leon, Grimes and Muse all released NFT projects, and in 2022 Muse's album Will of the People, sold as 1,000 NFTs, became the first NFT album eligible for the UK and Australian charts. Platforms such as Sound.xyz and Royal were built around this model.

In film, studios have released digital posters and collectibles, and some independent productions have used NFTs to finance a project with their audience.

Tickets and proof of attendance

An NFT ticket is hard to counterfeit, its resale can be controlled, and it stays in the owner's wallet after the event as a souvenir. Organisers can use it to reward loyal fans later. POAP (Proof of Attendance Protocol) applies the same idea to free badges: people collect a token for each conference, meetup or event they attend.

Domain names and digital identity

ENS (Ethereum Name Service) and Unstoppable Domains sell names such as name.eth as NFTs. These names replace long wallet addresses with a readable name and can hold a profile, links and other addresses. Other projects use NFTs as membership cards, diplomas, certificates or "soulbound" tokens that cannot be transferred and prove something about their owner.

Brands and loyalty programmes

Brands have used NFTs to build communities and loyalty programmes. Nike bought the studio RTFKT in 2021 and sold digital sneakers, Starbucks launched Odyssey, a loyalty programme with collectible "journey stamps", and Reddit gave millions of users Collectible Avatars without ever using the word NFT. Many of these projects have since stopped: Starbucks closed Odyssey in 2024 and Nike wound down RTFKT at the end of the same year. They still showed that NFTs can reach people who do not care about crypto when the technology stays in the background.

Physical goods and real-world assets

An NFT can also be linked to a real object: a watch, a pair of sneakers, a bottle of wine or a physical artwork. The token serves as a certificate of authenticity and follows the object when it is sold. Luxury brands use similar digital passports to track their products. More broadly, the tokenisation of real-world assets, such as property, invoices or funds, relies on the same idea of a unique token that represents a right.

What an NFT does not give you

Before buying, it is important to know the limits:

• Owning an NFT is not owning the copyright. Unless the project clearly says so, the buyer owns the token, not the right to reproduce or sell the image.
• The file is often stored elsewhere. Most NFTs only contain a link to the image. If that link is on a normal server that disappears, the token points to nothing. Storage on IPFS, Arweave or directly on chain is more durable.
• Scams exist. Copies of famous collections, stolen artworks minted without permission, fake airdrops, wash trading that inflates prices and "rug pulls" where creators disappear with the money are common. Always check the official collection and never sign a transaction you do not understand.

Used for the right reasons, NFTs are a simple way to prove ownership and to connect creators with their audience. The next article looks at where the market stands today and what could come next.