Litecoin Creator Charlie Lee: NFT Market Will Eventually Collapse

Non-fungible token art lacks scarcity, like „real art,“ Lee said.

Non-fungible tokens are currently a big topic in the crypto space. The category is becoming increasingly popular among creators and collectors alike

However, Litecoin ( LTC ) creator Charlie Lee believes the hype can’t last long. In a tweet on Monday, Lee said that unlike “real art,” NFTs have “zero cost”.

According to Lee, artists are limited in terms of time and effort in the real world. He compares this restriction with the proof-of-work. For Lee, this limitation creates scarcity, and therefore value, for works of art created by famous artists.

„NFTs, on the other hand, create an artificial scarcity,“ said Lee. He added, „Since it costs almost nothing to make another Bitcoin Future, the market will ultimately be inundated with NFTs from artists trying to capitalize on this craze. Supply will exceed demand and prices will eventually collapse. “

Lee thus reflects common criticisms of NFTs. However, there are arguments that the art scene, in both the real and digital worlds, is inundated with reproductions. The value of the piece often depends on the artist. Collectors pay attention to the creator of a work of art to distinguish it from other imitations.

The ability to cryptographically sign works of art is another benefit of NFTs that is often mentioned. Artists can incorporate metadata, file links and other necessary copyright elements

With NFTs, the scarcity is something of a consensus. That is why an extremely rare alien CryptoPunk was sold for 605 Ether ( ETH ) in January . While it would be possible to recreate this rare piece, it would not be part of the collection created by Larva Labs in 2017.

Hashmasks is another NFT collection and has created 16,384 „maps“ that sold for over $ 10 million in the first four days , Cointelegraph reported.

Lee also apparently restricts NFTs to art in his criticism, ignoring the collectibles scene with its in-game assets and digital land. In early February, nine digital land on the virtual world Lunacia for around 1.5 million US dollars sold .