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Smart contracts that run on a distributed ledger effectively need to work forever to be useful. Working forever requires maintenance and security—the longer a computer program runs, the more exposure it has to change and the opportunity to be exploited.
NFTs lack the legal and regulatory protection of other forms of property. In the event of a dispute, there is no oversight. This fundamental principle of crypto projects (decentralization, no middle man, zero trust) limits what can be represented as a non-fungible token.