Because NFTs are a newer tool, many people wonder how tokens on the internet could be worth money at all, especially when many of them just represent “ownership” of an online image or animation that you could download a copy of for free.

University of Michigan - Ann Arbor

Negatives of NFTs include:
- Value issues
- Scams / Fraudulence
- Rug pulls
- False advertising

Negatives of NFTs

How nfts create value. Harvard Business Review. (2021, November 19). Retrieved April 7, 2022, from https://hbr.org/2021/11/how-nfts-create-value 

How NFTs Create Value

NFT's could bring significant risk to a potential buyer who does not do their research. Scams could include sellers on NFT marketplaces impersonating a famous NFT company. For example, this would happen when the seller makes their username very similar to that of, "Bored Ape Yacht Club" and lists their fake NFT's  for very cheap prices. Buyers must be sure the vendor is verified and they are getting the real deal

Scams / Fraudulence

Value Issues of NFTs

NFT risks and opportunities in the IP, advertising, and Brand Management Spaces. Crowell &amp; Moring LLP. (2021, April 16). Retrieved April 12, 2022, from https://www.crowell.com/NewsEvents/AlertsNewsletters/all/NFT-Risks-and-Opportunities-in-the-IP-Advertising-and-Brand-Management-Spaces

NFT Risks and Opportunities in the IP, Advertising, and Brand Management Spaces

Vendors of an NFT would build a lot of hype through an impressive initial showing of their artwork, funding, or their doxed team (revealed identities of who is behind the project.) However, shortly into the NFT's lifespan, and after the hype has been generated the owner would shut down the project and pocket all the money they made and hide. Leaving the buyers with a worthless product.


Rug Pulls

Because of the technological and legal complexities of NFTs, it's possible that buyers aren't sure what they're getting and what rights they'll get when they buy one. This puts individuals selling NFTs at danger of being sued for false advertising.

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