Why Crypto Veteran Charlie Lee Is Sounding Alarm Against NFT Craze

Litecoin (CRYPTO: LTC) creator Charlie Lee, is warning about the frenzy surrounding non-fungible tokens.

What Happened: Lee, a former engineer at Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG) search unit Google, sounded the alarm on the parallels between the ICO rush of 2017 and the current NFT craze in a Twitter post on Tuesday.

I see a lot of parallels between 2021's NFTs with 2017's ICOs and 2013's altcoins:

- easy to create new ones with no barriers
- simple to understand & explain
- brings tons of new people into crypto
- high prices & pumps create hype/FOMO
- few will hold & have value, most won't

— Charlie Lee [LTC] (@SatoshiLite) March 2, 2021

The cryptocurrency veteran described NFTs as “Non-Finite Tokes” and pointed out that there is “zero cost to create [an] unlimited number of tokens.”

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In a separate tweet, he cited the example of Justin Roiland of “Rick and Morty” fame and his NFT artwork and questioned what’s stopping others such as “Simpsons” creator Matt Groening or animator Mike Judge from creating millions of new NFTs.

Lee also threw a challenge and asked to be proven wrong.

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

Lee clarified that while digital artwork takes time and effort to create, NFT is not the artwork.

Why It Matters: NFTs are akin to digital certificates of authenticity and can be used for digital assets such as games or artworks.

NFTs have attracted several artists, with the latest being Grimes, the partner of Tesla Inc (NASDAQ: TSLA) chief Elon Musk, who sold digital artworks for nearly $6 million, reported the Verge. 

See Also: Tesla Invests $1.5B In Bitcoin, Expects To Accept Crypto As Payment In The Future

Others that have jumped on the bandwagon reportedly include Beeple who sold $3.5 million worth of art last year and actress Lindsay Lohan. 

Meme Nyan Cat and electronic musician 3LAU are some other notables that have profited from the trend.

Price Action: LTC traded 3.4% higher at $182.23 at press time, while the apex cryptocurrency Bitcoin (CRYPTO: BTC) traded 2.09% lower at $48,624.08.

See also: What is a Non-Fungible Token (NFT)?

Photo by Paul Sableman on Flickr