Litecoin creator Charlie Lee has criticized the non-exchangeable token (NFT) industry, comparing it to the ICO boom in 2017.
Lee believes that the surge in popularity of NFT has a lot to do with the ICO mania in 2017 and even with the altcoin craze in 2013. According to Lee, the similarity of NFT, ICO and numerous forks of 2013 is the absence of barriers to their creation, and all this is aimed at mass attraction of people to the cryptocurrency market. These three cryptocurrency “phenomena” are characterized by a huge hype-potential buyers are afraid to miss out on possible profits, so they invest in NFT, forgetting about caution. However, only a few projects really have value.
“Given the zero cost of creating an NFT, the market will be flooded with tokens of artists and singers trying to cash in on this hobby. The supply will exceed the demand, and eventually the prices of such tokens will collapse, ” the creator of Litecoin is convinced.
The president of the Nakamoto Institute, Michael Goldstein, called non-replaceable tokens “ICO of 2021”, which are becoming especially popular among celebrities. For example, recently, the Canadian singer Grimes sold a digital art collection called “WarNymph Collection Vol. 1” for $6 million at a cryptocurrency auction. The collection includes images, as well as unreleased music tracks and videos.
In addition, this month, the vocalist of the rock band Linkin Park Mike Shinoda (Mike Shinoda) also released his own non-replaceable token. According to cryptocurrency investor and co-founder of Mechanism Capital, Andrew Kang, celebrities can scare off their fans, who may think that their favorite stars are only looking for profit.
According to NonFungible and L’Atelier, in 2020, the turnover of transactions with NFT was about $250 million, while in 2019 this figure reached only $62 million.