Litecoin creator predicts NFT crash

Litecoin creator Charlie Lee believes that non-fungible tokens (NFTs) will depreciate over time because of the ‘zero cost’ of creating them.

NFTs, on the other hand, create artificial scarcity. Because of the near zero cost to create another NFT, the market will eventually be flooded with NFTs from artists trying to cash in on this craze. Supply will overwhelm demand and the prices will eventually crash.

— Charlie Lee [LTC⚡] (@SatoshiLite) February 15, 2021

“Unlike NFTs, authentic works of art have value. Creating them requires effort and time. This, essentially, is Proof-of-Work,” wrote Lee.

What is the Proof-of-Work (PoW) algorithm?

Lee is convinced that NFT issuers are deliberately ‘creating artificial scarcity’. The situation will lead to more artists trying to earn money amid the hype around NFTs.

‘Supply will prevail over demand. Ultimately, prices will crash,’ Charlie Lee predicted.

The Litecoin creator created an NFT with his avatar and noted that it cost him nothing. Lee put the piece up for auction and asked to prove that he is wrong. At the time of writing, the highest bid stood at 1 WETH, or $1,797; four days remained before the auction ends.

With all that said, I’m willing to be proven wrong. I created a unique NFT with my profile pic. It cost me nothing (well except for the ridiculous ETH gas fee) and no effort at all. Prove me wrong and show me that this has value: https://t.co/ucmu8KB1Us

😂

— Charlie Lee [LTC⚡] (@SatoshiLite) February 15, 2021

In January 2021, the collectible developer Topps Digital presented 18 NFT cards featuring Senator Bernie Sanders in mittens.

In early February, actress Lindsay Lohan sold a Lightning NFT at auction on Rarible for $70,000.

As noted, billionaire Mark Cuban has said that NFTs could become incredibly popular in the next 10 years.

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