Beyond JPEG: How NFTs Are Being Used for Tickets, Identity and On-Chain Ownership

When most people hear the word NFT, they picture overpriced cartoon images and celebrity-endorsed collections from 2021. That association is understandable but narrow. Non-fungible tokens are a data structure: a unique identifier stored on a blockchain with a record of who holds it. That structure is useful for any application that needs to prove unique, transferable ownership of something, and the range of applications extends well beyond digital art.

What an NFT Actually Is at the Protocol Level

An NFT is a token that implements a standard interface, most commonly ERC-721 on Ethereum, which defines the functions a smart contract must expose so that wallets and marketplaces can interact with it uniformly. The ERC-721 specification, proposed by William Entriken, Dieter Shirley, Jacob Evans, and Nastassia Sachs in 2018, defines a minimal set of functions: who owns a token, how to transfer it, and how to approve a third party to transfer it on your behalf. What the token represents, whether that is a digital image, an event ticket, a software licence, or a legal document reference, is entirely defined by the contract creator and stored in metadata that the token points to.

The key word is “points to”: most NFT metadata is stored off-chain, on a web server or on a decentralised storage system like IPFS or Arweave. This means the on-chain portion of an NFT is a durable record of ownership, but the asset it references is only as permanent as the storage where that asset lives. Collections stored on IPFS with proper pinning are more resilient than collections stored on a startup’s own web server, which disappears if the startup closes. Understanding where the referenced content lives is basic due diligence for any NFT purchase. Our Ethereum coverage tracks the broader infrastructure that makes NFTs possible.

Event Tickets: The Most Mature Non-Speculative Use Case

Event ticketing is the utility NFT use case closest to mass deployment. The problems ticketing aims to solve with NFTs are genuine: counterfeiting, scalper arbitrage, and the absence of verifiable transfer history. A ticket issued as an NFT can be programmed with rules: it can be made non-transferable (soulbound) to prevent scalping, or it can be made transferable with a royalty that flows back to the event organiser on every secondary sale. The organiser can verify authenticity simply by checking that the wallet presenting the ticket holds the correct token, without a third-party database lookup.

Several music venues and sports teams have run NFT ticketing pilots, with mixed results. The principal friction is not technical but behavioural: requiring attendees to set up and fund a crypto wallet to attend a concert is a significant barrier for a general audience. Projects working on account abstraction, specifically the ERC-4337 standard, aim to make wallet management invisible to the end user by allowing gas fees to be sponsored and accounts to be controlled via email or biometrics rather than a seed phrase. If that abstraction succeeds at scale, ticketing becomes one of the more natural fits for NFT infrastructure. See our NFT category for coverage of on-chain ticketing pilots.

Identity and Credentials: Verifiable Proof Without a Central Database

Identity is the most technically ambitious NFT use case and the one furthest from ready consumer deployment. The core idea is that a university, a government, or a professional body could issue a credential as an NFT to a wallet controlled by the credential holder. The holder could then prove they hold the credential to a third party by signing a message with their wallet, without the verifier needing to call a central database. Ethereum-based identity projects including ENS (Ethereum Name Service) and the various implementations of the W3C Verifiable Credentials standard are building toward this capability.

Soulbound tokens, a concept proposed by Ethereum co-founder Vitalik Buterin in a 2022 paper, extend this idea by making certain NFTs non-transferable. A soulbound educational credential cannot be sold to someone who did not earn it, which is the basic requirement for a credential to be meaningful. The challenge is revocation: a traditional credential issuer can simply delete a database record; revoking a soulbound token from someone’s wallet requires a more careful on-chain mechanism. Several Layer 2 networks are building revocation registries for this purpose. The Ethereum page on TheWeal covers the L2 ecosystem where much of this identity work is being developed.

Gaming: Where NFT Utility Has Seen Genuine Adoption

Blockchain gaming is where NFT utility arguments have the most observable traction. Games that use NFTs for in-game items allow players to own those items independently of the game’s servers, trade them outside the game, and retain them if the game shuts down. Axie Infinity, Sky Mavis’s game, demonstrated both the potential and the risk in 2021-2022: at its peak it had three million daily active users and the internal economy created real income for some players in Southeast Asia; its collapse in value after the Ronin bridge hack wiped out livelihoods built on those in-game economics.

More sustainable models have emerged. Several games now use NFTs for cosmetic items that confer no gameplay advantage but allow players to retain and trade skins they acquire. The Ethereum layer-2 ecosystem has made the transaction costs of in-game NFT transfers low enough to be viable for items worth a few dollars rather than thousands. The long-term question is whether mainstream game developers, who currently derive significant revenue from selling non-transferable in-game items, will adopt systems that allow players to own and exit with those items.

What to Look For Before Buying a Utility NFT

Four questions cut through most utility NFT claims. usd/" class="twl-coinlink">First, what does the token actually grant? Read the specific rights the smart contract encodes, not the marketing description. Second, where is the metadata stored? On-chain, IPFS, Arweave, or a company server have very different permanence guarantees. Third, does the utility require the issuer to stay in business? A ticket for a concert that already happened, a credential issued by an institution with a revocation registry, and a game item playable on a decentralised protocol all have different dependencies on the issuer’s continued operation. Fourth, is the claimed utility already live, or is it a roadmap promise? Our methodology page covers how TheWeal evaluates such claims in its coverage.

Frequently Asked Questions

What is the difference between a fungible and a non-fungible token?

Fungible tokens are interchangeable: one USDT is identical to any other USDT. Non-fungible tokens are unique: each has a distinct ID within its contract, and owning token #47 is different from owning token #48 even in the same collection. The distinction matters because uniqueness is what makes NFTs useful for ownership records, tickets, and credentials.

Can an NFT be copied?

The image or file that an NFT points to can be copied trivially. What cannot be copied is the on-chain ownership record: there is exactly one wallet address that holds each token at any moment. Whether the right-click-save copy has the same value as the original depends entirely on social consensus about what the NFT represents, not on any technical protection of the underlying file.

What happens to an NFT if the marketplace it was bought on shuts down?

The ownership record lives on the blockchain, not on the marketplace. If OpenSea closed, every NFT bought through it would still exist and still be held by its current owner; the owner would simply need to access it through another interface. The asset the NFT points to is a separate question that depends on where the metadata is stored.

Sources

• Ethereum ERC-721 Token Standard — the specification that defines what makes a token non-fungible on Ethereum
• ERC-4337: Account Abstraction — the proposal to make wallets invisible to end users, removing the seed-phrase barrier