Four Major Challenges to NFT Mass Adoption

Amid the Covid-19 pandemic, a new class of digital assets, known as non-fungible tokens, or NFTs – have gained increasing popularity and global attention as artists and investors generate millions of dollars trading them.

The NFT boom in the creative industry started to gain traction when a Miami-based art collector Pablo Rodrigues-Fraile showed in February this year how lucrative the NFT market can be. He has resold a piece by Beeple for almost 1,000% profit at a record-breaking $6.6 million USD.

While NFT trading may generate impressive profits for dealers and present a new horizon for the art and creative industries, there are some fundamental challenges that need to be addressed before mass adoption can really happen. I’ve summarised these key challenges in this article. So hopefully it can give you a better understanding of the current NFT landscape and what innovations may emerge in the coming months.  

What is an NFT?

NFT stands for Non-fungible Token that’s stored on a digital ledger called a blockchain that proves its ownership and trail of exchanges. It’s commonly used to represent digital assets, such as photos, videos, audio, and other files, although it can also be used for real-world physical objects. 

An NFT asset needs to be unique, hence the name ‘non-fungible’. This is different from fungible assets, such as currencies. For example, a Bitcoin is a fungible digital asset – you can trade it for another Bitcoin, with exactly the same attributes and value. On the other hand, an art piece is non-fungible and one of a kind – if you exchange it for something else, you’d have something different from the original.

Key Challenges of the Current NFT Ecosystem

1. High & Hidden Fees and the Environmental Impact

What many first-time NFT buyers and sellers aren’t aware of is the hidden high fees with NFT transactions, called “gas fees”. Most of today’s NFTs are based on the Ethereum blockchain tokens (ERC-20, ERC-721 or ERC-1155, ETH token standards used for creating and issuing smart contracts on the Ethereum blockchain). Since blockchain miners need constant power to generate tokens, each NFT transaction comes with fees called ‘gas fees’, which may significantly cut into your profit margins. Some NFT transactions may even result in a loss if the buyers and sellers aren’t aware of the hidden gas fees.

But what’s causing the high gas fees, you may ask. Major blockchains – especially Bitcoin and Ethereum (used in NFT trades) – use a protocol called “proof of work” to determine their value. To create a bitcoin, Bitcoin “miners” task their specialized computers to solve those proof of work puzzles and compete with one another to validate blocks on the blockchain. Although this may change in the very near future, as Ethereum is expected to shift from “proof of work” to “proof of stake” later this year, but as of right now, each ETH transaction still requires a lot of computational power and energy.  

As The Verge reports, the NFTs are “at least partially responsible for the millions of tons of planet-heating carbon dioxide emissions generated by the cryptocurrencies used to buy and sell them.” 

2. Fragmented User Experience & Steep Learning Curve

See my other article back in 2018 – Why Blockchain adoption is a UX problem?

Like most blockchain creations, NFT was created by developers and computer engineers before it was adopted by the art community. Popular NFT trading platforms such as OpenSea and Nifty Gateway still have a very humble bootstrap look & feel. Navigation and on-site copies are written in tech jargon without much instruction or explanation. A new taxonomy is needed.

To start buying or selling NFTs, first, you need to understand the concept of a crypto wallet and sign up for a MetaMask or CoinBase wallet, which in itself is quite a task for a newbie. 

Users often have to jump between multiple crypto Websites and go through lengthy signup and verifications, giving up detailed personal information such as an address, phone numbers, and government IDs (KYC) in order to obtain a user account, before trading NFTs. 

None of the popular NFT platforms provide an onboarding tutorial or intuitive contextual help, leaving users struggling to figure it out by themselves. 

This steep learning curve may result in a huge drop-off rate of potential users (I estimate over 70-80% of users may drop off just on the wallet sign-up and connection flow itself). It would be interesting to conduct some detailed user testing to obtain actual KPIs and measure the impact of UX issues on the adoption rate of NFTs. 

For many artists and collectors, taste is as important and personal as the arts themselves. Therefore the design and style of the NFT Websites are also a critical aspect of convincing creative users that the NFT marketplace is truly built for art and creativity.  

3. Lack of Creative Freedom & Expression for Artists

At its core, NFT was supposed to allow artists to sell their artwork directly to fans. But not everything went as planned. Most NFT marketplaces have moderation and censorship, not allowing artists to express their creative freedom as what the blockchain decentralization movement has promised. The future of the NFT ecosystem may very well be more personal and decentralized as opposed to resorting to a few behemoth platforms that model Amazon. A well-designed, intuitive, and truly decentralized NFT marketplace engine is needed to enable any artist / creative to take advantage of blockchain digital art exchange.    

4. Little to No Copyright Protection

There’s an argument that NFTs are good for digital artists because it enables creatives to get paid for their work. However, since images can be easily duplicated and spread online, often no credit is given to the original creator. Also, there is a lack of legal framework and precedence to validate and reinforce the true copyright and ownership of NFTs. Unfortunately, there’s currently nothing stopping people from tokenizing someone else’s art, claiming it, and profiting off it. This poses a huge threat to both buyers and sellers, as a buyer of an NFT art could be unknowingly sued for copyright infringements. 


Although I’m a firm believer that NFT is changing the world of art and design forever, there are still multiple challenges we need to solve before mass adoption can occur. In a new era of the ‘digital double’ – a virtual economy that mirrors the physical world, new innovations are needed from a collaboration of different industries and communities. That is why, Ocher, a startup platform founded by fintech entrepreneurs, real-world artists, and the creative community, is committed to creating a next-generation decentralized, non-censored creative exchange marketplace, tailored for artists and creatives. Ocher aims to protect digital copyrights while offering an intuitive and delightful user experience. To learn more, follow us on LinkedIn for the latest updates. 

Boz Zou

Founder of Ocher – Incubator, Entrepreneur, Angel Investor, Fintech/Blockchainer

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