- Litecoin creator Charlie Lee has warned of an influx of NFT art as creators try to “cash in” on the craze
- Like any art however, NFT art is entirely subjective, with it being worth what someone wants to pay for it
- Whether something is free or expensive to create, it is only extrinsically worth what someone is willing to pay for it
Litecoin creator Charlie Lee has claimed that a boom in the NFT token market is going to result in an equally big bust as the market gets flooded with substandard digital art. Lee took to Twitter to warn that artists will soon be flooding the NFT marketplace with pieces created at no cost purely to make money while they are hot, but this ignores the concept that art is in the eye of the beholder and whether the market is flooded or not, pieces will only sell if they have value to someone, with that person deciding what they are willing to pay. This is, of course, the whole point of art in any form.
The problem with NFTs is that they are Non-Finite Tokens. There is zero cost to create unlimited number of tokens.
Sure, Justin Roiland’s NFT is unique and awesome. But what’s stopping Matt Groening or Mike Judge or thousands of other artists from creating millions of new NFTs? https://t.co/anlEmfhmPW
— Charlie Lee [LTC⚡] (@SatoshiLite) February 15, 2021
NFTs “Create Artificial Scarcity”
Lee says that NFTs “create artificial scarcity” because only one of each is produced, adding that the NFT art market will be “flooded with NFTs from artists trying to cash in on this craze”. The reason why the market will be flooded, he says, is because NFTs cost “near zero” to create, meaning, as we have seen with the thousands of shitcoins that have plagued the crypto space, there is nothing stopping anyone creating an NFT.
The key difference between NFTs and cryptocurrencies however is that cryptocurrencies find value in their utility, be it as a currency or a way to interact with a platform. The purpose of an NFT is just to look good, at least good enough for someone to buy it, which is entirely down to the individual. If they want to pay a few ETH for a crappy cartoon drawing of a dog eating a banana, then let them – no one is forcing them to buy it, and they’re not getting caught up in a craze of any sort.
Time Will Tell on NFT Market Quality
When it comes to creating NFT art, Lee is also not taking into account the time and talents of the artist in question, as well as the cost of the equipment they have bought in order to create their art. Of course if the market is flooded with knock offs of existing works or illegal uses of copyright then of course there is a problem, but the space will quickly devalue such pieces as a market always does. A market being “flooded” by works that are eagerly snapped up is a sign of a healthy market, so we will have to see how many pieces remain unsold as the NFT space develops.