In early 2024, 71-year-old artist from Bengaluru, India believed he had finally found recognition in the modern art world. An “art dealer” contacted him, praising his paintings and offering to buy them as NFTs. Negotiations took place over Facebook and email. The price was set at a staggering 42 Ethereum (ETH) — worth around ₹1.09 crore (≈ $130,000) at the time. For an independent artist, this looked like a life-changing opportunity.
The scam began subtly.
On February 1, he made his first payment of 0.115 ETH — ₹21,653 (≈ $260) — as a so-called “gas fee.”
After listing four of his works he waited to withdraw 6 ETH as the first installment. But nothing came. Instead, he was told he had delayed the process and now owed a “delay fee.”
Helpless and eager not to lose the sale, he paid again — this time in Indian rupees. Over several days in February and March, he transferred ₹1.37 lakh (≈ $1,650) through bank accounts and UPI to names provided by the fraudsters. Even after all this, the website kept asking for more payments. When Shivaprasad requested that the “fees” simply be deducted from the sale amount, he was ignored.
By April, he realized he had been conned. The promised ₹1.09 crore (≈ $130,000) never existed. Instead, he had lost savings, hope, and trust. He finally approached Bengaluru Cybercrime police, who filed a case under sections of the Information Technology Act and Indian Penal Code for identity theft and cheating.
His story is not just about one man. It shows how scammers prey on artists’ dreams, using the confusing and poorly understood world of NFTs as bait.
To understand why scams like this succeed, we first need to answer a simple question: what exactly is an NFT?
What Is an NFT?
NFT stands for Non-Fungible Token. The words sound technical, but at the core, the idea is simple once you break it down.
Token: Think of a token as an entry in a giant notebook. This notebook is digital, public, and permanent. Once something is written in it, it can’t be erased or altered. That notebook is called the blockchain.
Non-Fungible: This just means unique. A ₹100 note is fungible — one note can be swapped with another without changing its value. But your childhood photo, your grandmother’s handwritten recipe, or the Mona Lisa — those are non-fungible, because there’s only one original.
Put together, an NFT is a unique record on the blockchain that proves ownership of a specific digital asset.
A Digital Certificate of Authenticity
To really understand why NFTs matter, let’s compare them with the physical art world.
Imagine a painting in a gallery. Anyone can take a photo of it, or even try to copy it brushstroke by brushstroke. But experts have ways to tell whether a painting is genuine or fake:
They examine the brush strokes, since no two artists paint with exactly the same motion and pressure. They study the layers of paint, sometimes using X-rays to reveal underdrawings or corrections. They analyze the materials: the pigments, the kind of canvas, even how the paint cracks with age. They check the provenance — the chain of ownership records tracing back to the artist. All of these clues make it possible to declare, “This is the original, authentic work.”
But with digital art, none of that exists. A file is infinitely copyable. If an artist posts a painting online, anyone can right-click and download it. Every copy looks exactly like the original because in the digital world, copies are perfect. If someone reposts it claiming, “I made this,” there’s no visible way to prove them wrong.
This is where NFTs come in. They act as the digital equivalent of provenance and authenticity. Instead of brush strokes and aging pigments, the blockchain acts as the ledger of truth. It records:
This artwork was minted on this date.
This specific wallet address is the original creator.
This other wallet is the current owner.
Anyone can still copy the image, just as posters of the Mona Lisa are everywhere. But only one person can hold the blockchain-verified “certificate” that proves theirs is the original digital asset.
Why People Care
At first glance, it seems silly to buy something that anyone else can see for free. But people have always cared about authenticity and originality:
A signed baseball card is valuable even though anyone can print the same photo.
Or
A designer handbag has worth not because it holds things better, but because it’s authentic.
Or
A painting’s value lies not in the image itself but in the fact that it’s the real one created by the artist.
NFTs try to give that same sense of authenticity to the digital world.
NFT vs Copyright: Clearing the Fog
Here lies the heart of the confusion — and the trap scammers use. Many people assume that buying an NFT means they now “own the art.” The reality is less glamorous.
Think first about the physical world. Suppose you buy a painting by Artist X and hang it in your living room. You certainly own the canvas, the paint, the frame — the physical object itself. But that does not mean you automatically own the copyright. Unless Artist X has formally transferred it in a contract, the copyright still belongs to them. That copyright gives them the legal power to decide how the painting is reproduced. You can proudly display your canvas or even resell it, but you cannot legally print it on T-shirts, sell posters of it, or publish it in a book without permission.
Now imagine someone photographs the painting in your living room and publishes it in their magazine. Who has the right to sue? Not you, the buyer. It is Artist X, the copyright holder, who can take legal action. You own the object — but not the right to control how it is copied.
NFTs work in much the same way. Buying an NFT is like buying the painting: you own the token, the “digital canvas” recorded on the blockchain. But unless the creator explicitly transfers copyright, the rights to the artwork remain with them. That means you can resell the NFT or display it in your digital wallet, but you cannot automatically use the art commercially, prevent others from screenshotting it, or sue for infringement.
This is the critical difference: NFTs prove ownership of a token, while copyright determines ownership of the work itself. They are not the same thing. And it is precisely in this fog between token and art that scammers thrive. They tell artists: “Mint your work as an NFT and no one can steal it again.” Or they tell buyers: “Buy this NFT and you own the art.” Neither is true.
What Is Minting?
When people talk about “minting” an NFT, what they really mean is recording a token on the blockchain. The token itself lives securely on the chain, but the actual artwork file — whether it’s an image, video, or audio clip — is usually far too large and expensive to be stored there directly. Instead, the NFT holds what is called metadata. This metadata includes details like the creator’s wallet address, the creation date, and most importantly, a URL or a hash that points to wherever the artwork is actually hosted.
Where that artwork lives can vary. Sometimes it sits on centralized servers, such as Amazon Web Services, which is risky: if the company shuts down or simply stops paying for hosting, the image tied to your NFT could vanish. Other projects use decentralized storage systems like IPFS or Arweave. These spread the file across a peer-to-peer network, which makes it much harder to lose, though it still requires someone to keep “pinning” or hosting the file. In rarer cases, the artwork is stored directly on the blockchain itself — a method known as on-chain storage. This option is the most durable, since the image will last as long as the blockchain does, but it is also very expensive, which is why it is not common.
Even large, trusted platforms such as OpenSea and Rarible don’t store the artwork on-chain. On OpenSea, your NFT is minted on Ethereum or Polygon, but the underlying file usually remains off-chain — often hosted on OpenSea’s own servers or on IPFS. Rarible leans more on IPFS, which is safer than central servers, though it still depends on someone maintaining the file on the network. In both cases, the blockchain secures the token and its metadata, but the artwork itself is not on the blockchain.
Licensing vs NFTs: What Are You Really Buying?
Long before NFTs arrived, digital artists were already selling their work — but what they sold was usually a license, not the art itself. A license is essentially permission. For example, if you commission a portrait, you normally get the right to use it for personal purposes — as a wallpaper, a profile picture, or even as a print on your wall. But you don’t automatically get the right to resell it, print it on T-shirts, or use it in an ad campaign. For that, you would need a separate commercial license.
There are different kinds of licenses: royalty-free licenses (where one payment lets you use the art multiple times), rights-managed licenses (where the cost depends on how and where you use the work), and exclusive licenses (where the artist promises not to sell it to anyone else). In rare cases, a buyer may even purchase the copyright itself — but that usually costs much more, since the artist is giving up all future control and revenue from that piece.
NFTs work very differently. When you buy an NFT, what you actually own is the token recorded on the blockchain. That token might point to an artwork, but it does not grant you usage rights by default. Unless the artist explicitly includes licensing terms in the NFT’s smart contract, you don’t have the legal right to reproduce the art, print it on merchandise, or stop others from copying it. You own the token, not the copyright.
This is the heart of the misunderstanding. Traditional art sales make the boundaries of ownership clear through licensing agreements. NFTs, on the other hand, often blur those boundaries. Buyers think they are purchasing the art, when in reality they are purchasing proof of token ownership — a very different thing.
When Even Big Players and Elon Musk Call NFTs Dumb
The weakness of NFTs isn’t limited to small scams. Even global giants have left their buyers stranded. When Nike acquired RTFKT, a startup known for its virtual sneakers and digital collectibles, the hype was immense. People rushed to buy “CryptoKicks” and other NFT drops, many spending thousands of dollars in the hope they were buying into the future of fashion. But by late 2024, Nike began winding down its virtual operations. Support dried up, promised perks disappeared, and the value of those NFTs collapsed almost overnight. Buyers who had believed they were purchasing the keys to an exciting new world suddenly held tokens that were little more than expensive souvenirs. Some were angry enough to take Nike to court, filing a class-action lawsuit that accused the company of misleading them and leaving them with worthless assets.
This isn’t just a corporate misstep — it cuts to the heart of the NFT problem. Elon Musk once ridiculed NFTs as “just a URL to a JPEG,” pointing out that most NFTs don’t actually store the image on the blockchain, only a link to wherever the file is hosted. If that server disappears, your NFT might end up pointing to nothing at all. His criticism highlights a deeper flaw: what you own isn’t the art itself, but a fragile pointer to it.
No wonder so many people have begun asking the blunt question: are NFTs simply dumb? On the surface, the answer looks obvious. More than 90 percent of collections have lost most of their value. Scams, failed promises, and abandoned projects dominate the headlines. From speculative bubble art to corporate rug pulls, the wreckage is everywhere.
And yet, the technology itself isn’t inherently dumb. At their core, NFTs offer something powerful: digital provenance — a way to prove who created a digital work and when. They allow artists to bake in automatic royalties on resales, something traditional art markets have never achieved. They can serve as tamper-proof tickets, membership passes, or even verified records for property and identity. In gaming, they could allow players to truly own and trade in-game assets across platforms.
The problem is not the idea of NFTs, but how they’ve been sold and abused. Right now, the noise of scams and failures drowns out the potential. But the Nike collapse and Musk’s sarcasm remind us of one hard truth: until NFTs are built with real durability, utility, and honesty, most of them are little more than fragile tokens tied to promises that fade away.
Protecting Yourself: Building a Bridge, Not Falling for a Trap
The Bengaluru artist’s story is a painful reminder of how easily hope can be twisted into fraud. He only wanted what every creator dreams of — recognition and fair reward. Instead, he was left with debt and regret. His mistake wasn’t creating digital art, but walking blindfolded into a system he didn’t fully understand.
The lesson is clear: in the NFT world, knowledge is your only shield.
Here’s how to build that shield:
Separate copyright from NFTs: Copyright is your legal power. An NFT is only a digital token. Don’t confuse the two.
Beware of upfront fees: Real collectors don’t ask you to pay before they buy. If a buyer insists on having the art minted on the blockchain, common sense says they can pay the minting fee themselves and simply deduct it from the offer. You shouldn’t have to pay anything upfront.
Check platforms and buyers: Stick to established marketplaces and verified accounts. A glossy DM is not proof of legitimacy.
Guard your wallet: Phishing links and fake sites can wipe out everything you own. Never click on links from strangers.
These aren’t just technical precautions — they are stepping stones. Each one helps you cross safely from the shaky ground of hype and scams to the solid ground of informed choices.
NFTs are not useless by design. The technology has promise: secure ownership records, built-in royalties, and potential in gaming, music, and beyond. But that promise is still far from reality for most artists and buyers. Today, scams outnumber success stories.
So, are NFTs dumb? Maybe the way they’ve been hyped, yes. But the underlying idea isn’t. Like the early internet, most of what we see now will collapse, but a few foundations may survive and shape the future.
Until then, walk carefully.