LATOKEN experts: Scam or not? What’s wrong with NFT art
For the last couple of months, news of the “new era of digital art,” sales of memes and works of digital artists for hundreds of thousands, no, millions of dollars, has been heard everywhere! This is both an opportunity for digital artists to make money finally and for collectors to show off a collection of GIFs. Sounds cool? Maybe. Or maybe not.
The desire to buy something arises from the awareness of the value of what is being bought. With crypto art, “ownership” of an object on the blockchain is claimed. But we still live in a legal world that regulates such relationships between people. NFT is nowhere and in any way regulated or recognized as a means of designating ownership. If we draw an analogy from a legal perspective, then buying crypto art is the same as buying a plot on the moon or calling a star by your own name. Simply put, marketplaces equate a blockchain token with the legal meaning of owning something.
Hype in the media
Let’s take a closer look at high-profile sales: who bought the crypto art and why? Christie’s 69 million lot was bought by an anonymous crypto investor from Singapore. On the same day, tethers were nominated on the TRON blockchain platform equivalent to $1 billion. A billion is, by the way, a record.
Justin Sun, the founder of TRON, also participated in the bidding for the crypto art. He also bid for the very first tweet, along with Sina Estavi, also a TRON affiliate. If we turn to other high-profile purchases, it turns out that the majority were bought by anonymous investors who are large holders of ETH and are interested in raising its rate. Alternatively, you can buy NFT from yourself and announce this deal to the media.
What if it’s a pyramid, after all?
If you look at crypto art and NFT from an economic point of view, then there is a suspicion of a standard pyramid scam.
The US Securities Commission (SEC) has even issued a simple checklist on recognizing a pyramid scheme. Let’s go through its points in the context of crypto art:
✅ No genuine product or service: it is proposed to pay for a token that does not give real ownership.
✅ Promises of high returns in a short time period: examples from the media show that any digital artist can sell their work for millions of dollars.
✅ Easy money or passive income: marketplaces offer “perpetual” income.
✅ Buy-in required: everyone who wants to sell their digital art object, or any other digital product, must pay for a transaction and more than once.
✅ No demonstrated revenue from retail sales: the value of “owning” a crypto art is not obvious
✅ Emphasis on recruiting: a strong desire to create a lot of high-profile news stories so that many people have FOMOs and run to sell their digital objects.
More claims to NFT
- Anyone can download any art and sell it as NFT. It would probably be possible to speculate about copyright and ownership in a legal manner, but this does not make sense because NFT does not give any ownership.
- NFT carbon footprint. It has been compared to the carbon emissions of an entire country, and there is a big wave of hate on Twitter on this topic. Well, let’s count it as a problem.
Non-fungible tokens are the trend of 2021. The explosive growth in their popularity is attracting more and more public attention. In the future, they may become a pathway for the development of the copyright market. NFTs are also capable of serving as personal identifiers and authenticating contracts and documents.
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LATOKEN crypto exchange does not provide any investment, tax, legal, or accounting advice. This article is written for informational purposes only. Like other assets, cryptocurrency is subject to market risk. Please do your own research and trade with caution.