Years after CryptoKitties were released to the masses, the non-fungible token (NFT) sector is finally on the rise.

Coveted collectibles sell for millions of dollars in some of the best auction houses in the world. Top-class soccer and basketball teams publish unique moments that fans appreciate. Film studios are also starting to release NFTs as memorabilia, opening up new sources of income when they are most needed.

It’s no wonder that NFT-focused companies are attracting staggering reviews. Just take a look at Sorare, which is well on its way to raising a minimum of $ 3.8 billion in funding through its latest round of funding. While there have been endless proclamations that a bubble is forming in this nascent space, big brands believe these assets will last. Let’s not forget the myriad of use cases for NFTs that are also yet to be discovered.

Unfortunately, a dark cloud hovers over the horizon – and it risks holding back the NFT sector. Right now, blockchain technology doesn’t offer nearly enough value proposition to motivate a user to own these crypto collectibles. If the market is to multiply and attract everyday users, the industry must address three key design issues.

The delicate question of property

Let’s imagine you have an NFT that is a beautiful work of art by a famous painter. In all likelihood you would have paid a pretty penny for it.

But here’s the problem: this crypto collectible is completely worthless without the existence of the underlying asset it is supposed to represent. Permanent storage of the high-resolution image data that give such NFTs their value is currently associated with enormous costs. The problem is compounded when you consider videos.

Related: NFTs enable gamers to have digital property rights

Without the right incentives, blockchain nodes responsible for protecting these files may not function as they should, and this could result in irretrievable loss of NFT data. It’s one thing to pay $ 1 million for a rare, non-fungible token – quite another to lose that investment due to circumstances beyond your control.

The best approach to solving this problem is to ensure that when selling NFTs, economic incentives are spread more widely – beyond the original creator of the token, the seller, or the marketplace that enabled the transaction. Nodes should also receive a portion of the profits.

Protect content

Even if this design flaw is quickly corrected, others will emerge that could undermine the value of a rare NFT. Currently, most of the content protection mechanisms used for digital assets are either absent or weak. The data underlying digital collectibles is typically stored on centralized file servers, increasing the likelihood of hackers – or exclusive data that is illegally shared.

Related: To change the art industry, NFTs need to be safer

For an NFT to be truly valuable, only its owner should be able to see and enjoy the data it contains. Implementing digital rights management (DRM) would help protect an investment and could help alleviate some of the concerns about actual sales from marketplaces. This approach would not be too dissimilar to Apple’s approach when it launched its iTunes Store, adding DRM to the music to make sure it was rightfully the owner’s track, not someone else’s.

Ownership tied to identity

Last but not least, we have to keep in mind that NFTs cannot be replaced – and that means that if they are lost or stolen, the damage is permanent.

If non-fungible tokens become a dominant force in the decades to come, we need to create a mechanism by which NFTs can be inherited – so that coveted digital assets can be passed on from one generation to the next. We shouldn’t tie ownership of an NFT to a private key – instead, a blockchain should tie those rights directly to a person’s identity. This will help future proof this asset class and ensure that control is never lost.

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We already live in a world where information is being lost at an alarming rate. Millions of web pages – filled with living stories, photos, and videos – have already been deleted and lost forever. Letting the same thing happen with NFTs would be a travesty.

Now is the time to act. The NFT industry is still at an early stage and there are huge improvements that can be made before we get to mass adoption. Failure to fix these design flaws could ultimately slow the size of this industry for years and create a significant headache for those who have invested in tokens worth more than houses.

This article does not provide investment advice or recommendations. Every step of investing and trading involves risk and readers should conduct their own research in making their decision.

The views, thoughts, and opinions expressed herein are solely those of the author and do not necessarily reflect the views and opinions of Cointelegraph.

Phantom Seokgu Yun is CEO and Senior Scientist at SWN Global. He has over 25 years of experience in cryptography, algorithms and security architectures. Phantom has provided security solutions for Davos and G20 summits, LG, Samsung and Yahoo and other multinational companies. He currently leads the MetaMUI CBDC and NFTs platform, the first identity-based blockchain.