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.
See also:
- An Engineer’s Hype-Free Observations on Web3 literary notes
- Smart contracts are not legal contracts and since NFTs are implemented as smart contracts this might have some bearing on the rights of ownership (but I’m not a lawyer!)
- Web3
Links to this note
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Smart Contracts Are Not Legal Contracts
Smart contracts are not recognized as legal contracts and don’t offer the same protections. They are more like stored procedures in that they are scripts that execute on a blockchain.