Wearable biosensors have been of interest for their wide range of uses, varying from recording biological signals to measuring strain of bending joints. Carbon nanoparticles have been utilized in biocompatible polymers to create nanocomposites with highly tunable mechanical and electrical properties. These nanocomposites have been demonstrated to be highly effective as wearable sensors for recording physiological signals such as electroencephalography (EEG), offering advantages in mechanical and electrical properties and signal quality over commercially available sensors while maintaining feasibility and scalability in manufacturing. This review aims to provide a critical summary of the recent literature on the properties, design, fabrication, and performance of carbon-based nanocomposites for EEG electrodes. The goal of this review is to highlight the various design configurations and properties thereof, manufacturing methods, performance measurements, and related challenges associated with these promising noninvasive dry soft electrodes. While this technology offers many advantages over either other noninvasive or their invasive counterparts, there are still various challenges and opportunities for improvements and innovation. For example, the investigation of gradient composite structures, hybrid nanocomposite/composite materials, hierarchical contact surfaces, and the influence of loading and alignment of the dispersal phase in the performance of these electrodes could lead to novel and better designs. Finally, current practices for evaluating the performance of novel EEG electrodes are discussed and challenged, emphasizing the critical need for the development of standardized assessment protocols, which could provide reliability in the field, enable benchmarking, and hence promote innovation.