Source: Charlie Delingpole Blog
Non-fungible tokens (“NFT’s) were born with the advent of Crypto-Kitties in 2017, operating on Ethereum. The point about NFT’s is that they are both scarce and more importantly can be unique, unlike a fungible commodity such as Bitcoin. Buyers can thus purchase individual NFT’s, and then resell them, much like pieces of art.
They have had a resurgence in the past few weeks. Since then, social media stars such as Logan Paul have been able to raise $3.5m in one day from NFT sales.
Like Ethereum or Bitcoin, NFT’s are a store of value. Much like specific pieces of art, they can be used as a high value good that be used to exchange physical value. Unlike art, the data on the ownership is stored on the NFT ledger, and thus is public and verifiable. Unfortunately, it is also anonymous.
Therefore NFT’s represent another vehicle for both speculation and money-laundering.
This whole blockchain fueled crypto-currency thing (and now NFTs) are going to cause people to lose large amounts of money.