It’s a trick as old as the market itself and it is one that the newest of forums is not immune to it seems.
NFT trading is being called out for some of its more nefarious practices, among them the practice of wash trading wherein the buyer of the NFT is the owner himself, creating a false trade and artificially inflating the value of the trade. Purchasers not part of this nefarious loop will be in possession of something with an inflated value, something they will learn once they attempt to sell these NFTs themselves.
In other words, caveat emptor or buyer beware is always a good word of caution to keep in mind.
Endgadget cites a report from data research firm Chainalysis that identified “a group of 110 NFT traders” that made some $8.9 million from the scheme. Evidence used to buoy this argument were the trades of the NFTs themselves, some of which were sold back and forth some 25 times.
Why does any of this matter? Well, people (photographers among them) are glomming on to NFTs in huge numbers. The current market could rise to as much as $45 billion in the near future hence why so many people are paying attention to this emerging market.
Yet, as with any relatively unregulated marketplace, there are more than a few reasons to exercise caution when it comes to NFTs – especially here in the beginning. How any kind of regulation is going to be implemented, if at all, is beyond this writer’s paygrade but there’s no way it’s going to go very far without some kind of guardrails to protect end buyers. After all, from wine to art to stocks and more, collecting valuable things is an art and a science that, depending on the field, has more than a few experts, institutions, and ancillary organizations to help protect people from this kind of thing.
What’s your stance with regard to NFTs? Let us know your thoughts in the comments below.
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