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Why the NFT Craze Is a Bubble Waiting to Pop

The latest collectible boom is fueled by speculators, not enthusiasts

James Surowiecki

Marker, 2021

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The desire for wealth – more than a passion for collecting – is driving the boom in nonfungible tokens (NFTs), journalist James Surowiecki finds in this handy explainer of the latest thing in investing. Creators use the attributes of blockchain to produce one-of-a-kind digital items that speculators are bidding up in frenzies that recall past investment booms. But as Surowiecki discovers, the big winners in this new marketplace may well end up being the service providers that facilitate all the hubbub.

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Nonfungible tokens (NFTs) are the newest new thing in the digital world.

Born of the blockchain’s digital ledger, NFTs are cyberassets emblematic of the modern era. Their existence on a blockchain creates a historical record, and this nonfungibility is the source of an NFT’s value, as each one’s identity is unique, precluding its exchange with another. Many are produced in a limited run, just as an artist creates a set number of a particular work. In early 2021, a digital artist named Beeple sold an NFT of a 10-second video for $6.7 million.

Since early 2020, collectors have traded pieces of art, basketball hoop shots, music&#...

About the Author

James Surowiecki is a financial journalist and the author of The Wisdom of Crowds.

Why the NFT Craze Is a Bubble Waiting to Pop

The latest collectible boom is fueled by speculators, not enthusiasts

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Nonfungible tokens (NFTs) are the newest new thing in the digital world.

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