Are NFTs obsolete? A detailed look at NFT applications

NFTs Explained: Features and Overview

**NFTs (Non-Fungible Tokens) are an innovative technology that issues unique certificates for digital assets.** Unlike traditional digital data, which can be easily copied or altered, NFTs leverage blockchain technology to clearly verify ownership of digital content.

By issuing NFTs for digital art, creators can certify the authenticity of their works. NFTs also add rarity and distinctive value to assets such as in-game items and event tickets. The scope of NFT applications goes far beyond investment, with the technology being adopted across a wide range of industries.

Key NFT Use Cases:

• Digital Certificate Issuance: Paper-based certificates have historically been vulnerable to forgery and tampering. NFT technology enables secure, reliable digital certificates, advancing the digitization of important documents like diplomas and professional credentials.

• Application in Hometown Tax Donation Programs: By leveraging NFTs, local governments can offer unique rewards such as digital artwork and virtual experiences. This approach showcases regional appeal in innovative ways and promotes interactive engagement with supporters.

• NFT-Based Crowdfunding: Creators can issue their work as NFTs and raise funds directly from fans, establishing a new crowdfunding model. Supporters purchase NFTs to back projects and receive exclusive benefits or content in return.

• Blockchain Gaming Integration: NFT-based games enable players to truly own in-game items and characters as NFTs, allowing free trading and exchanges. These assets acquire real-world economic value, providing new revenue opportunities for players.

While NFTs remain an evolving technology, they are expected to play an increasingly critical role in areas like real estate transactions and economic activities within the metaverse.

Are NFTs Really "Dead"?

NFTs have attracted significant attention for verifying ownership of digital assets like artwork and game items. Yet, skepticism persists, with some arguing that "NFTs are meaningless" or "NFTs are already dead." This article examines these claims objectively, drawing on industry trends and data.

Fact: NFTs Without Value Were Issued, and the Boom Has Passed

Several years ago, the market was flooded with NFTs lacking real value, along with many tokens that were difficult to sell due to low liquidity. These early challenges stemmed from market turmoil and malicious actors during the initial phase of NFT technology. In recent years, the NFT boom has faded, and market dynamics have shifted dramatically.

Industry Status and Perspectives

According to research reported by BeInCrypto, approximately 96% of NFT projects have failed, with 43% of holders experiencing losses. The average loss for NFT holders is 44.5%, and the typical project lifespan is just 1.14 years.

Importantly, nearly one-third of NFT projects have disappeared in recent years, marking an unprecedented failure rate. These figures illustrate the intense shakeout underway in the NFT market.

Nonetheless, Devin Finzer, Co-founder and CEO of OpenSea, remains optimistic about NFTs' future, emphasizing the growing appeal of gaming and NFTs linked to physical assets.

OpenSea continues to see new use cases emerge. Making OpenSea the hub for every type of NFT is vital to capturing the next wave of collectors.

Devin Finzer, Co-founder & CEO, OpenSea

OpenSea supports a broad range of NFTs, including gaming and physical items, and offers customizable collection pages. Finzer predicts the gaming sector will drive NFT adoption, with seamless onboarding for gamers being a key factor for future success.

Meanwhile, a market forecast report from leading US venture firm a16z anticipates NFTs will solidify their role as digital brand assets, becoming mainstream among companies and communities worldwide.

Why NFTs Continue to Hold Value

Three core factors underpin NFTs' ability to retain long-term value:

• Proof of Scarcity: NFTs are permanently recorded on the blockchain, providing technical verification of unique digital asset ownership. This feature grants digital content a level of rarity comparable to physical assets.

• Practical Utility: NFTs are more than collectibles—they serve real-world functions as in-game items, event tickets, membership credentials, and more. This utility drives sustained demand for NFTs.

• Robust Community Building: Successful NFT projects foster vibrant communities and dynamic economic ecosystems, which form the foundation for sustained NFT value over time.

In Japan, an increasing number of companies are adopting NFTs—not only for profile-picture (PFP) projects, but also for hometown tax donation and crowdfunding initiatives. NFT adoption is expected to expand further among large enterprises and public institutions.

As a result, NFTs are not a passing trend; they deliver practical value across a variety of fields, and demand is poised to rise further. Rather than being a speculative bubble, NFTs are a promising technology with the potential to deliver genuine value to digital society and spur adoption in even more sectors.

NFTs Aren't Dead: Highlighting NFT Use Cases

This section offers an in-depth look at practical NFT applications and specific use cases.

Meaningful NFT Use Case #1: Community Building

NFTs serve as credentials for joining communities united by shared values and interests. In Japan, many NFT projects prioritize community building and have developed unique cultures.

Projects such as CryptoNinja and LLAC exemplify leading PFP initiatives that have cultivated active, passionate communities. These projects operate Discord servers for NFT holders, regularly host offline events, and often allow holders to participate directly in project management.

Key Benefits of NFT Community Participation:

• Member Interaction: Connect deeply with others who hold the same NFT project, forging bonds over shared interests and values.

• Exclusive Information Sharing: Access timely, members-only updates and private insights, enabling a deeper understanding of project direction and future plans.

• Engagement in Creative Initiatives: Leverage NFT intellectual property to launch new projects and events, empowering members to pursue derivative works and related ventures.

• Exclusive Rewards: Enjoy NFT holder-only benefits, including rights to purchase limited products, priority event access, and entry to special digital content.

In this way, NFTs function as more than digital assets—they serve as proof of community membership, offering holders diverse forms of value.

Meaningful NFT Use Case #2: Hometown Tax Donation

Recently, NFT technology has emerged as a transformative innovation for hometown tax donation programs. NFTs serve not only as digital assets, but also as powerful tools for showcasing regional appeal and fostering meaningful connection with supporters.

NFT-based hometown tax donation provides donors with NFTs as rewards. These may include digital art, regionally exclusive virtual items, and collectibles celebrating local history and culture.

Leading Examples of NFT Hometown Tax Donation:

• Imabari City, Ehime: Offers NFT art inspired by Imabari's famous towels. This project blends digital innovation with traditional craftsmanship.

• Izumisano City, Osaka: Provides NFT art featuring the local mascot, "Izumisano Daruma," merging regional branding with digital technology.

• Koka City, Shiga: Issues NFT art themed on the area's ninja heritage, digitally preserving and promoting local cultural assets.

These initiatives enable municipalities to highlight regional attractions in novel formats and foster enduring relationships with supporters.

Meaningful NFT Use Case #3: Crowdfunding

NFT-based crowdfunding empowers creators to issue their works as NFTs and raise capital directly from fans. Supporters purchase NFTs to back projects, receiving exclusive digital content or unique rewards in return.

Compared to traditional crowdfunding, NFT-based crowdfunding offers several advantages:

• Verifiable Ownership: Supporters hold unique, blockchain-verified digital assets.
• Secondary Market Liquidity: NFTs can be traded, transferred, or sold to others.
• Long-Term Relationship Building: NFT holders gain access to exclusive communities and perks, strengthening ties between creators and fans.

Notable Examples of NFT Crowdfunding:

• CNP (CryptoNinja Partners): One of Japan's largest NFT collections, CNP used NFT crowdfunding to launch an anime project, made possible by strong community support.

• LLAC (Live Like A Cat): Raised more than ¥10 million for the LLAC House construction project, showcasing the power of NFT communities in creating real-world assets.

Although NFT crowdfunding is still in its early stages, it is likely to become an increasingly popular way for creators and fans to connect.

Meaningful NFT Use Case #4: NFT Gaming

NFT gaming leverages blockchain to issue in-game items and characters as NFTs, granting players true ownership. Players can trade these assets or use them across different games.

Major platforms such as Epic Games have launched NFT and blockchain games like Illuvium, built on ImmutableX, reflecting growing industry interest.

Core Features of NFT Gaming:

• True Asset Ownership: Players own their in-game items independently of game operators.
• Economic Value: Rare items and characters hold real-world value and can be traded for profit.
• Interoperability: Some NFT games enable asset use across multiple games, increasing utility.

As these use cases mature, natural demand for NFTs grows, driving project visibility and liquidity. NFT gaming stands out as a promising sector for building sustainable digital ecosystems.

Key Considerations When Buying NFTs

Key Point #1: Define Your Purpose

It's crucial to clearly identify your reasons and intended uses before purchasing NFTs. The market is diverse, with participants driven by investment, collecting, or practical utility.

Common NFT Purchase Motivations:

• Collecting: Acquiring and enjoying digital art or content.
• Investment: Buying NFTs as a means of asset management, hoping for future appreciation.
• Utility: Purchasing NFTs for specific uses, such as gaming, community access, or event participation.

Trading NFTs without a clear purpose exposes you to market volatility and the risk of significant losses. NFTs often have lower liquidity than other financial assets, making it harder to find buyers when you wish to sell.

Before buying, carefully research the NFT's use case, project credibility, market value trends, and community engagement. Assess the project's long-term vision and roadmap to gauge sustainability.

Key Point #2: Use Surplus Funds

NFTs are highly volatile digital assets. In the past, many NFTs lacking real value saturated the market, and countless tokens suffered from low liquidity and poor resale prospects.

Although more robust projects have emerged recently, NFT investing remains risky. Compared to stocks and cryptocurrencies, NFTs are even more volatile, so prudent decision-making is essential.

Best Practices for NFT Investing:

• Invest Surplus Funds Only: Never use essential or emergency funds—only invest money you can afford to lose.
• Diversify Your Portfolio: Spread investments across multiple NFT projects to reduce risk.
• Take a Long-Term Approach: Focus on lasting project value, not short-term price swings.
• Keep Learning: The NFT market evolves rapidly, so stay up to date with the latest trends and information.

By following these guidelines, you can manage NFT investment risk and participate in the market more safely.

Conclusion: NFTs Are Not Dead—Their Applications Will Continue to Grow

This article has provided a comprehensive analysis of whether NFTs are "dead." NFTs are groundbreaking technology for verifying ownership of digital assets, offering unique proof via blockchain that sets them apart from traditional digital assets.

Although the market once saw a flood of worthless, illiquid NFTs, recent changes have left only projects with genuine value, which have formed sustainable ecosystems centered around passionate communities.

Nonetheless, NFTs remain highly volatile compared to other investment assets. When investing, clarify your purpose and act only within your surplus funds, exercising caution at all times.

While NFTs are still developing, they are already delivering practical value in community building, hometown tax donation programs, crowdfunding, and gaming. Their reach is expected to expand into real estate transactions, digital identity, and metaverse economies.

NFTs are not a fleeting fad—they are a foundational technology for digital society, with growing applications ahead. Use this guide to explore the many ways NFTs can be leveraged, and experience the potential of this innovative technology first-hand.

FAQ

What is an NFT? How is it different from cryptocurrency and blockchain?

An NFT is a blockchain-based digital asset that is uniquely identifiable and non-interchangeable. Cryptocurrencies are fungible and function as digital currencies. NFTs are applied to assets that require uniqueness, such as digital art and gaming items.

Are NFTs actually dead? What is the current market situation?

NFTs are not dead. The speculative phase has ended, and the market is maturing. Practical applications in gaming, ticketing, and RWA (real-world asset) tokenization are increasing, with major corporations steadily entering the space.

What are real-world uses for NFTs? How are they utilized in daily life?

NFTs verify ownership of digital art, music, and gaming items. They are traded and resold as collectibles and used for copyright management, metaverse assets, and ticket issuance.

Is investing in NFTs worthwhile? What risks are involved?

NFTs offer growth potential but come with high price volatility and limited liquidity. A long-term approach and thorough research are essential for success.

What are examples of NFT use beyond digital art and games?

NFTs are used for digital resident IDs by local governments, gifts for hometown tax donations, and regional revitalization projects. They also serve as digital qualification certificates and provide community access rights that connect to real-world benefits.

How do I buy or sell NFTs? What are the beginner steps?

Create a crypto wallet and purchase Ethereum (ETH). Send ETH to your wallet, search for NFTs on a marketplace, and complete your purchase. To sell, list your NFT on the marketplace and sell for ETH. Don't forget to account for gas fees.

Why did the NFT bubble burst? What does the future hold?

The NFT bubble burst due to market saturation, tighter regulations, and a lack of killer use cases. The market is now shifting toward practical applications such as ticketing, memberships, and RWA tokenization. Starting in 2026, expect steady market growth as real-world NFT usage expands.