Are NFTs obsolete? Exploring NFT use cases

What Are NFTs? An Overview of Their Key Features

NFTs, or Non-Fungible Tokens, are a technology that issues unique certificates for digital assets. Unlike traditional digital data—which can be easily copied or altered—NFTs enable clear proof of ownership.

Based on blockchain technology, NFTs store unique identification data for each token, making tampering extremely difficult. For example, minting an NFT for a digital artwork certifies its authenticity. NFTs can also be issued for game items and tickets to boost rarity and value.

The potential applications for NFTs extend beyond investment and are expected to expand into many different industries.

• NFT-Based Certification: Traditional certificates are susceptible to forgery and tampering, but NFTs allow for the creation of more secure and reliable certificates. Blockchain recording ensures transparency and traceability.
• Hometown Tax Donations Using NFTs: NFTs enable municipalities to offer unique digital art and virtual experiences as gifts for donors, providing new ways to showcase local appeal and foster two-way engagement with supporters.
• NFT Crowdfunding: Creators can issue their works as NFTs to raise funds from fans, establishing a new model of crowdfunding. Backers support projects by purchasing NFTs and receive unique rewards in return.
• NFT Games: NFT-based games allow players to own, buy, sell, and trade in-game items and characters as NFTs. This gives in-game assets real-world value and enables players to earn income through gameplay.

NFT technology is still evolving, but it is expected to play a key role in real estate transactions and economic activities within virtual worlds (the metaverse). As the technology matures, we can expect to see even wider and more diverse applications.

Are NFTs Really "Dead"?

NFTs have attracted significant attention as a way to establish ownership of digital assets such as digital art and game items. Still, persistent criticism remains that "NFTs are meaningless or obsolete."

The Boom Is Over—And Many NFTs Lost Value

In 2021, vast numbers of low-value NFTs were minted, and some lacked liquidity, making them hard to sell. This was driven by early market confusion and bad actors. The initial NFT marketplace was marked by speculation, and many projects lacked real utility.

Since then, the market has undergone major corrections, resulting in the elimination of many projects. This process clarified the difference between genuinely valuable projects and those without substance.

Industry Perspectives

BeInCrypto reports that 96% of NFT projects have already failed, and 43% of holders are facing losses. On average, NFT holders have seen losses of 44.5%, and the average NFT lifespan is just 1.14 years. Notably, about one-third of NFT projects vanished in 2023, marking a record-high failure rate.

Despite these challenging statistics, industry leaders remain optimistic about NFTs. Devin Finzer, co-founder and CEO of OpenSea, continues to highlight NFT potential, especially for gaming and physically-backed NFTs, which are gaining market traction. OpenSea is pursuing new use cases and emphasized the importance of becoming the go-to hub for every type of NFT to attract the next wave of collectors.

OpenSea now supports NFTs for games and physical items and offers customizable collection pages to reach a broader range of users.

Other companies also reject the notion that NFTs are finished. In a December 2023 forecast, prominent US venture firm a16z predicted NFTs would become mainstream digital brand assets across companies and communities.

Why NFTs Still Hold Value

Even after the market correction, NFTs remain valuable for several reasons:

• Scarcity: NFTs are recorded on the blockchain, providing proof of unique ownership. This technological feature enables digital assets to have scarcity similar to physical goods.
• Utility: NFTs are increasingly used for practical purposes, such as in-game items and tickets, rather than just as collectibles.
• Community: Many NFT projects cultivate passionate communities and vibrant economies. Shared values among members enhance a project's sustainability.

In Japan, more companies are embracing NFTs. Beyond PFP (profile picture) projects, NFTs are being adopted for hometown tax donations, crowdfunding, and more. Large enterprises and public institutions are expected to increase their adoption as well.

As a result, NFT demand is expected to grow—not diminish. NFTs are not merely a speculative bubble, but a technology with the potential to deliver value across society and industries.

NFTs Are Not Dead: Real-World NFT Use Cases

NFT Use Case 1: Community

NFTs can serve as membership passes for communities of people with shared interests and values. In Japan, numerous NFT projects are focused on community building.

For instance, PFP projects like CryptoNinja and LLAC have built dedicated communities. Holders interact on Discord servers and at offline events, and many projects empower holders to participate in project management.

In these communities, NFT ownership means more than possession—member interactions spark new ideas and collaborations. Benefits of holding NFTs include:

• Networking: Connect with other holders to build relationships and discover business opportunities.
• Information Sharing: Access exclusive and early project updates, supporting better investment and participation decisions.
• Idea Implementation: Leverage NFT IP to launch new projects or events, collaborating with community members on creative initiatives.
• Exclusive Perks: Enjoy holder-only benefits, such as invitations to special events or priority access to new NFT releases.

NFT Use Case 2: Hometown Tax Donations

NFTs are gaining attention as an innovative tool for hometown tax donation programs. They allow local governments to showcase regional appeal in new ways and build interactive relationships with supporters.

In NFT hometown tax donation programs, donors receive NFTs as gifts. NFTs may feature digital artwork or region-exclusive items. Unlike physical gifts, NFTs are easy to store and can be preserved indefinitely.

Local governments across Japan have implemented these programs. Major examples include:

• Imabari City, Ehime Prefecture: Offers NFT art inspired by Imabari towels, blending local tradition and digital innovation.
• Izumisano City, Osaka Prefecture: Releases NFT art featuring the local mascot "Izumisano Daruma," known for its accessible, character-based design.
• Koka City, Shiga Prefecture: Provides NFT art with a ninja theme, reflecting local culture and history.

These programs promote regional appeal nationwide and have succeeded in capturing the interest of younger, digitally native generations.

NFT Use Case 3: Crowdfunding

NFT-based crowdfunding enables creators to mint NFTs of their work and raise funds directly from fans. Supporters back projects by purchasing NFTs and receive unique digital content or rewards in exchange.

Unlike traditional crowdfunding, supporters hold NFTs as assets, which may appreciate as projects succeed—introducing an investment element for backers.

This model has been adopted in projects both in Japan and internationally. Key examples include:

• CNP: One of Japan’s largest NFT collections, CNP used NFT crowdfunding to finance anime production through community support.
• LLAC: Raised over 10 million yen to build "LLAC House" via NFT crowdfunding, allowing holders to participate in the physical project.

NFT crowdfunding is likely to keep expanding as a new way for creators and fans to connect.

NFT Use Case 4: NFT Games

NFT games use blockchain to mint in-game items or characters as NFTs, allowing users to utilize or trade them freely. In traditional games, companies control in-game items and players lack true ownership. NFT games, by contrast, give players real asset control and trading freedom.

In October 2023, Epic Games launched the NFT/blockchain game Illuvium on ImmutableX, signaling the entry of major game companies into the NFT gaming space. This has boosted both awareness and confidence in NFT games.

Because in-game use cases are clear, organic demand arises, increasing liquidity and market stability. Players enjoy gaming while building digital assets—a new and rewarding experience.

What to Keep in Mind When Buying NFTs

Key Point 1: Define Your Purpose

Before buying NFTs, clarify your intended use—collecting, investing for appreciation, or using NFTs in games or art. Purpose matters.

If you purchase NFTs without a clear goal, you risk reacting emotionally to market swings and incurring losses. Speculative buying is especially risky and should be approached with caution.

NFTs also have lower liquidity than many other financial assets, so finding a buyer may take time. Always research the NFT's use case and market value trends before purchasing, and make informed decisions.

Consider the project’s background, team credentials, and the health of its community as part of your due diligence.

Key Point 2: Invest Only Surplus Funds

NFT prices can be highly volatile. In 2021, many low-value, illiquid NFTs were issued, making it difficult to resell. Price discovery was challenging in the early market, with speculation causing drastic fluctuations.

Although conditions have improved, NFT investment remains high-risk—more so than stocks or Bitcoin. Proceed with caution.

The NFT market is still immature, so unexpected price swings and liquidity issues can occur. Only invest funds you do not need for daily living or emergencies. Do not use essential or emergency savings for NFT purchases.

Follow diversification principles by allocating only a portion of your assets to NFTs to help manage risk.

Conclusion: NFTs Are Not Obsolete—Their Use Cases Will Continue to Expand

This article examined whether NFTs are "dead." NFTs offer technology to prove ownership of digital assets, making uniqueness verifiable in ways traditional digital assets cannot.

Previously, many NFTs offered little substance or liquidity and were hard to sell. After a market correction, only truly valuable NFTs remain and robust communities have formed.

Today, NFTs are used for community building, hometown tax programs, crowdfunding, and gaming—demonstrating practical, real-world value beyond speculation.

However, NFTs remain highly volatile compared to other assets. When investing, clarify your purpose and use only surplus funds.

NFTs are still developing, but as the technology matures, more use cases will emerge. As adoption spreads among companies and government agencies, NFTs are expected to become a familiar part of everyday life.

FAQ

What Is an NFT? How Is It Different from Cryptocurrency and Blockchain?

An NFT (non-fungible token) is a unique digital asset recorded on the blockchain. Cryptocurrencies are interchangeable and identical in value, while NFTs represent individually valuable assets such as art, in-game items, or real estate.

Is the NFT Market Really Declining? What Are the Current Trends and Market Size?

The speculative NFT boom has ended, but the market is not in decline. As of 2026, practical uses in gaming, RWAs, and ticketing are expanding, and transaction volumes have stabilized. Sales growth is driving broader user participation, and major corporations continue to invest for the long term. The market is entering a mature phase.

What Are the Practical Uses of NFTs? Can You Give Real-World Examples?

NFTs are used in digital art, in-game items, music, sports content, and fan community building. They verify ownership on the blockchain, and creators can automatically receive royalties from secondary sales. NFTs also enable global trading.

Will NFT Art Maintain Its Value? Is It a Legitimate Investment?

NFT art will continue to hold value in the art market. Institutional investors are increasing their involvement, and prices are expected to keep rising. NFTs have secured their place as investment assets.

What Role Do NFTs Play in Games and the Metaverse?

NFTs prove ownership and scarcity of digital assets within games and the metaverse. Players can own and trade unique items or avatars with assured value. NFTs enable true ownership and stimulate in-game economies.

What Risks and Scams Should I Watch for When Buying NFTs?

Risks include counterfeit NFTs, phishing scams involving fake marketplaces, rug pulls (where project creators abscond with funds), and pump-and-dump schemes (price manipulation). Always verify trusted sellers and avoid suspicious URLs.

What Knowledge and Skills Are Required to Succeed in the NFT Market?

Success requires deep blockchain knowledge, digital art creation skills, market trend analysis, and strong communication abilities. Combining these skills enables you to build competitive NFT projects.

Why Are Leading Brands and Companies Entering the NFT Space?

Brands and companies are adopting NFTs as an innovative marketing tool to enhance uniqueness and build direct relationships with collectors. NFTs create new revenue streams and boost brand value.