The Security Change That Would Make Digital Asset Scams as Rare as NFTs
With the NFT industry gaining more traction from mainstream media, it's imperative that creators and collectors have a secure platform to protect their digital assets.
Like most things in the blockchain ecosystem, the NFT industry has cycled through periods of intense and mild interest. But with this year’s surge in adoption from artists, athletes, celebrities, influencers, musicians and others looking to issue their own digital creations, we have no doubt entered an era of expanded and sustained NFT proliferation.
In addition to the influx of big names and well-known figures like Mark Zuckerberg, Ashton Kutcher, Tom Brady and Tiger Woods who have entered the space with much fanfare, lesser-known digital art creators and collectors have also been able to find their niche within the industry as NFT marketplaces continue eliminating barriers to the peer-to-peer trading of collectibles and fine art. In the first half of last year, total sales volume for NFTs increased to $2.5 billion from $13.7 million in the first half of 2020.
With NFT marketplaces experiencing record increases in traffic and users seeking to trade and store digital art growing in lockstep, there is a burgeoning demand for platforms that can deliver secure, trustless and reliable service that protects against a raft of NFT scams and fraudulent hackers who threaten to disrupt this thriving ecosystem. One of the greatest threats to growth in the NFT space is a failure to protect both creators and collectors from rampant theft and fraud.
Robust verification systems appear to be the ideal solution for comparing NFTs and preventing fraud. Technology that compares two photos against one another to determine if they are the same does exist. The problem doesn’t lie in the computer’s ability to tell if two images are exactly the same or not, but in its ability to determine how similar they are.
For example, let’s say a creator mints an NFT of a green plant with a blue background, and a malicious user wants to take that NFT and make money off of it. The user changes one pixel and resells it on another platform. To the naked eye, these two images look identical. To a computer verification system, they are different because they have one tiny difference. Now let’s assume that the user decided to make the modifications more obvious, and changes the plant and background colors. A human can tell those two images are the same with minor differences. The second one would not be considered unique.
Related: NFTs Are So Much More Than JPEGs
What NFT marketplaces need is a sophisticated verification system that can mimic the human eye and recognize that subtle differences do not make artwork unique. A more accurate measurement for such protocols would be a rareness score rather than a binary “similar” versus “different” output.
While a rareness score would not prevent an NFT that is not unique from being sold on a platform, it would allow users to determine how rare the assets they want to purchase are. As we all know, rare art is more valuable and expensive than its commonplace counterparts. The same goes for original art. Rareness scores would allow users to better navigate the NFT space and make more informed decisions about the assets they decide to purchase.
In addition to understanding how rare an NFT is before purchasing it, users should be aware of red flags they may face on marketplaces. Some hacks are preventable if users don’t fall into the traps laid out by scammers. The solution isn’t a complicated one — educational tools and resources on popular marketplaces are needed for helping users navigate this nascent world as safely as possible. NFT marketplaces and other dApp developers should also be on the lookout for emerging technology that provides robust verification systems, which add a layer of security for users looking to purchase unique, digital assets.
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