Artificial Scarcity

The abstract notion of creating an asset whose supply is artificially determined and set by the issuer instead of by its physicality or underlying whose demand curve would be generated by a use value or income cashflows.

Products like crypto asset, NFTs and sometimes art are artificially scarce.

Financial instruments like bonds, stocks and derivatives are not artificially scarce because of their underlying cashflows. Commodities are not artificially scarce because of their physicality and intrinsic value.

There is an infinite number of non-physical artificially scare assets that can be created, thus leading to a paradox where unless demand is also infinite their market value should trend towards zero.


  1. Mims, Christopher. n.d. ‘NFTs, Cryptocurrencies and Web3 Are Multilevel Marketing Schemes for a New Generation - WSJ’. Accessed 14 March 2022.
  2. Anonymous. n.d. ‘Why NFTs Are Bad: The Long Version’. Accessed 21 March 2022.
  3. Bodó, Balázs, Alexandra Giannopoulou, João Quintais, and Péter Mezei. 2022. ‘The Rise of NFTs: These Aren’t the Droids You’re Looking For’.
  4. Çağlayan Aksoy, Pınar, and Zehra Özkan Üner. 2021. ‘NFTs and Copyright: Challenges and Opportunities’. Journal of Intellectual Property Law & Practice 16 (10): 1115–26.
  5. Diehl, Stephen. 2021. ‘The Tinkerbell Griftopia’. 19 November 2021.
  6. Fairfield, Joshua. 2021. ‘Tokenized: The Law of Non-Fungible Tokens and Unique Digital Property’. Indiana Law Journal, 1–99.
  7. Gibson, Johanna. 2021. ‘The Thousand-and-Second Tale of NFTS, as Foretold by Edgar Allan Poe’. Queen Mary Journal of Intellectual Property 11 (3): 249–69.
  8. Guadamuz, Andres. 2021. ‘The Treachery of Images: Non-Fungible Tokens and Copyright’. SSRN Electronic Journal 16 (12): 1367–85.
  9. Kim, Soyeon. 2020. ‘Fractional Ownership, Democratization, and Bubble Formation - The Impact of Blockchain Enabled Asset Tokenization’. 26th Americas Conference on Information Systems, AMCIS 2020, 0–5.
  10. Kong, De-Rong, and Tse-Chun Lin. 2021. ‘Alternative Investments in the Fintech Era: The Risk and Return of Non-Fungible Token (NFT)’. SSRN Electronic Journal.
  11. Low, Kelvin F K. 2021. ‘The Emperor’s New Art: Cryptomania, Art & Property’. Art & Property.
  12. Mackenzie, Simon, and Diāna Bērziņa. 2021. ‘NFTs: Digital Things and Their Criminal Lives’. Crime, Media, Culture, 17416590211039796.
  13. Nadini, Matthieu, Laura Alessandretti, Flavio Di Giacinto, Mauro Martino, Luca Maria Aiello, and Andrea Baronchelli. 2021. ‘Mapping the NFT Revolution: Market Trends, Trade Networks, and Visual Features’. Scientific Reports 11 (1).
  14. Olson, Dan. 2022a. Line Goes Up – The Problem With NFTs.