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Here's why NFTs are crypto's latest pump-and-dump scheme designed to make crypto insiders rich

Here's why NFTs are crypto's latest pump-and-dump scheme designed to make crypto insiders rich

5,000 everydays artwork by Beeple, which was sold at Christies auction house for $69 million.
Reuters




An NFT owner doesn't have any copyright or legal rights to the piece if there isn't a contract.




The digital artwork lives on the internet where anyone can still "watch, listen to, or copy" without paying.




When buying an NFT, the actual object isn't being purchased.




See more stories on Insider's business page.


Non-fungible tokens have taken the world by storm, becoming the hottest thing in the cryptocurrency market within only a few months. They are touted as a way to revolutionize the way digital art is bought and sold. But a closer look reveals NFTs are no more than a pump-and-dump scheme designed to make a few crypto insiders rich. NFTs are one-of-a-kind tokens that live on a blockchain. Whereas fungible tokens, like bitcoin, can be swapped out one for one, NFTs are unique and can be used to reference images, sound clips, videos, and more.The speculative mania for NFTs peaked in March when Christie's sold an NFT linked to "Everydays: The first 5000 days," a digital collage by Mike Winkelmann (more commonly known as "Beeple"). The token claiming to represent the massive JPEG sold for $69.3 million with fees, paid for in ether, the native cryptocurrency of the Ethereum blockchain. But the craze didn't begin there. Beeple NFTs were being pumped by crypto bros months beforehand, only to culminate in a large sale that brought a media storm to NFTs and the world's attention to a graphic artist who few people previously had ever heard of.
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