NFT is one of those phenomena that has become both a symbol of innovation and an object of skepticism. Periods of hype, million-dollar auctions, and the ensuing downturn have created buzz, but not always an explanation. Why are some NFTs worth millions while others disappear into the blockchain without a trace? Why are NFTs valuable?
This question is less about fashion or speculation and more about the nature of digital ownership, demand, utility, and the context in which these assets exist.
Why Are NFTs Valuable
NFTs, or non-fungible tokens, have raised many questions since their rapid emergence into the mass market, from fundamental to market questions. One of the key ones is: why do NFTs have any value at all? To understand this, it is important to move beyond the image of the “expensive JPEG” and look at NFTs as a data structure and legal-technological form designed to represent a unique digital asset.
At the most basic level, the NFT is a way to prove digital uniqueness and establish ownership in the digital space. It is not just a file but a token fixed in a blockchain that references a particular object (digital or physical) and confirms its origin, owner, and, potentially, terms of use.
NFTs’ value does not come solely from the very content to which they can be attached – be it an image, music, in-game item, or digital certificate. Their value is a combination of several factors: technical uniqueness, legally programmable ownership, contextual relevance, and audience and market perception. NFTs may be meaningless outside of a particular cultural, economic, or social context – but in the right bundle, they become a carrier of value, status, access, or function.
So, to explain NFT value in simple terms, it is a mechanism embedded in blockchain that allows any digital object to become a private, transferable, trackable asset. And in a world where digital dominates, NFT becomes a tool for expressing and validating value, even if that value is subjective or symbolic.
Scarcity and Uniqueness in NFTs
Any market starts with scarcity. But in the digital space, where every object can be copied infinitely, classical economic laws are no longer valid. In this reality, NFT economics requires new tools – those that can programmatically specify the scarcity, provability, and logical origin of an asset.
In NFT economics, the key is not the cost of production but the architecture of output. ERC-721 and ERC-1155 standards allow the developer to specify supply parameters at the contract level, including properties like maxSupply, totalMinted, and tokenId. These are not declarations – they are enforceable logic built into the blockchain itself. Therefore, one of the central factors that make NFTs valuable is that the scarcity, visual attributes, and behavioral logic for interacting with NFTs are written as open, executable code. Not a promise – but a rule.
In this system, scarcity and uniqueness in NFTs are the ways how to evaluate NFT worth:
- Issue constraint – the contract explicitly limits the total number of tokens.
- Token individuality – tokenId is unique, and metadata can include non-repeatable attributes.
- Public verifiability – any user can verify the configuration and current status of a token directly from the blockchain or through aggregators such as Etherscan, OpenSea, Zora, and Reservoir.
Hence, what makes an NFT rare: it is either a statistically unique combination of attributes (e.g., 1 out of 3 tokens with a gold frame) or external factors – ownership history (provenance), participation in a certain phase of the drop, peculiarities of mining (e.g., via allowlist, auction, claim). Such data is stored in metadata and often aggregated by rarity calculation systems like rarity.tools or Trait Sniper.
The market reacts to these characteristics in a clear and pragmatic way. How digital scarcity impacts NFT prices is not just a question of demand for price but demand for structure. Collections with an open unlimited mint lose value because it is impossible to calculate the supply cap. On the contrary, projects with clear constraints (maxSupply + burn logic + locked mint) and transparent distribution show more stable pricing and liquidity. Prices rise not on “arts” but on guarantees that this token is rare, verifiable, and non-dilutable.
Therefore, today’s evaluation is based not on emotions but on-chain analytics: rarity rank, uniqueness score, volume velocity, and time-to-resale. In addition, such parameters as availability of royalty logic (EIP-2981), market activity, and decentralization of ownership are important for institutional players. The higher the turnover of a token among unique wallets, the higher the perceived utility and real marketability.
Finally, all these principles are directly reflected in NFT market trends and pricing. Since the beginning of 2024, there has been a growing interest in collections where the issuance architecture is built as a modular system – where each token is not just unique but is part of a broader logic: gamification, multi-level rarity, dynamic attributes (on-chain mutable metadata). Such NFTs become not just objects of the collection but the basis for building complex secondary activity markets.
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Digital Ownership and NFT Value
As you have already realized, in the digital environment, owning an object without owning the infrastructure in which that object lives becomes fiction. This is where NFT comes into play – as a mechanism that, for the first time, makes it possible to explicitly link ownership to the technical ability to validate, transfer, and monetize a digital asset. And this fundamentally changes the very nature of ownership on the Internet.
The central concept here is digital ownership and NFT value. While classic digital ownership (e.g. an account on a platform) depends on a centralized registry and administrator rights, NFT offers a model in which the right to an asset is decentralized, verifiable, and continuously available for verification. It is not just a file or link – it is a token containing a unique identifier, owner address, and metadata, including potential terms of use or license.
This is really what gives NFTs their value. The value of an NFT doesn’t necessarily come from the linked content itself – it comes from transparency, alienability, and enforceability. An NFT owner doesn’t just hold a token – they can transfer it, own and earn royalty, and use it in dApp ecosystems, DAO platforms, or GameFi engines.
One of the most important elements of this structure becomes the logic of NFTs and creator royalties. Standards like EIP-2981 allow royalty parameters to be set directly in the contract – for example, 5% of each secondary sale. These rules do not require platform involvement: if the marketplace respects the royalty logic, it is enforced automatically. This sets a precedent for a decentralized royalty economy, where the content creator gets a share of every transaction regardless of jurisdiction or platform.
But what are the real application benefits for the owner? At the user level, it could be access to a private community, a role in the governance of the DAO, a license for commercial use, gaming functionality, or even renting a token (via ERC-4907). This gives rise to what makes an NFT worth buying – not only the prospect of price appreciation but also the current functional utility. The market is increasingly valuing an NFT not as a “valuable JPEG” but as a token of access, license, reputation, or profitability.
Hence the logical question, which is often heard publicly – do NFTs actually have real value? The answer is yes, if we consider value not as aesthetics, but as an enforceable right embedded in the code. An NFT can be:
- a certification of ownership of a digital object,
- an authorization to access a particular system,
- a license for commercial use,
- a source of royalty or distributable income,
- or an element of a financial contract.
This is not a metaphor for ownership – it is its formalization in a protocol, and this is what gives NFT real, not declarative, value.
NFT Utility vs Speculation
NFT is a tool, but the market often treats it as an artifact. While we’ve covered the technical reasons why tokens can have value, it’s impossible to ignore the flip side: a huge amount of market activity in NFTs is based not on utility, but on speculation.
This is what is at the heart of the NFT utility vs speculation debate. Most of the high-profile headlines involving tens of millions of dollars in sales were not about what the token provided in terms of access, function, or economic mechanism, but what it symbolized. NFT has evolved into a form of social capital – digital status validated by blockchain. While this in itself is a form of value, a legitimate question arises: is NFT value based on hype or utility?
The answer is in the balance. Some projects do provide functionality: access to closed DAO, delegated voting, and cross-platform game assets. However, the majority of market volume is provided by the movement of funds between traders who rely on subsequent resale. This leads to the fact that tokens are purchased not for use, but for profit. Therefore, waves of hype, pump&dump scenarios, and short-term bursts of interest occur.
So, you can ask: why are NFTs worth money if the obvious utility is missing? More often than not, it’s because of the narrative. A collection receives focus from opinion leaders, appears on top marketplaces, quickly disperses in the mint phase – and an attention spiral is triggered, within which the price becomes a self-sustaining effect. In this case, not only demand plays its role but also the expectation of demand. Price ceases to be a reflection of utility – and becomes a reflection of shared belief.
And why do people pay millions for NFTs? In a world where art auctions work as marketing campaigns, this behavior is not unique. Some people buy NFTs for status, some for entry into a social club, and some for the certainty of growth. Price becomes a form of demonstrative participation in future success.
In this sense, NFTs resemble speculative early-stage technology assets: expensive not because they already generate revenue, but because they promise potential. Ultimately, answering why are some NFTs so expensive? – the answer may not always be technologically or functionally justified. Often it’s an artifact of a good moment, meme culture, or nostalgia. Often it’s the result of limited release, successful visual metaphor, and collective speculation.
AI Explanation of NFT Value
When we discuss the value of NFTs, the question naturally arises: can an algorithm provide an objective answer to it in the same way as it performs with regular crypto?
This is where the AI explanation of NFT value immediately faces a limitation. Most models, including LLMs, don’t have on-chain access, don’t analyze contracts directly, and most importantly don’t consider all the user behavioral patterns. They can aggregate information, and draw conclusions based on correlations, but aren’t able to evaluate the asset as a market participant. Consequently, if we ask the question: how does AI understand NFT value? – the answer will be: mainly through the description of secondary attributes: number of mentions, trading volume, and visual context, and not through analyzing the actual structure of the token.
Moreover, predicting the success of a particular NFT is even more difficult than a token. Why? Because, unlike cryptocurrency, NFTs are almost always unique. This complicates model training, makes mass sampling impossible, and calls into question the very idea of a universal “valuation algorithm.” In this sense, can AI tell if an NFT is a good investment? – Rather no than yes. An algorithm can point to market metrics, but not context: meme effect, cultural shift, relevance of visual narrative, hidden community dynamics. And these are the metrics that often determine the outcome.
Can AI explain why NFTs have value? I would say that the right question is different: Is AI alone capable of uncovering it?
NFTs have long been seen as an overrated speculation – because their actual use case has not yet arrived. They were positioned as a solution for artists and collectors, but the early market turned them into a hype tool. However, with the advent of generative AI, it became clear: the problems of verification, authorship, and ethical use of data are systemic, large-scale, and technologically unsolved.
Modern models are trained on unlabeled and unverified datasets. Content is generated in unaccountable volumes. Copyrights are erased, licenses are lost, and provenance disappears. No one – neither the user, nor the regulator, nor the algorithm itself – can determine where the information came from, who has rights to it, and under what conditions it was used.
And this is where NFTs show their true essence. Not just as an investment asset, but as a trust structure:
- that can capture authorship at the smart contract level,
- accompany each piece of data with a license,
- build royalty and terms of use into the access model itself,
- and provide a transparent path from creator to model and back again.
So, I would say that NFTs are becoming not something that AI must evaluate, but something without which AI cannot be ethical, trustworthy, and reproducible. They may have come early. But that doesn’t mean they were unnecessary. I would say the opposite: they were just waiting for their real challenge.
Conclusion
NFTs have survived a rapid takeoff, a market distortion, and a crisis of perception. But all that can be just the first cycle – because their architecture solves much more fundamental problems. The value of NFTs goes far beyond market price to create a capability that combines uniqueness and scarcity, ownership and royalty sharing, verification infrastructure, and automated trust.
With the advent of AI, it is clear: these properties are not superstructures, but something that should be sewn into the digital environment by default. NFTs don’t just fit this future – they were designed for it. And only now are we beginning to realize this.
