NFT: property limits, practical considerations

12.05.22

Although blockchain is applied in several circumscribed types of activities, such as money collection (both via ICOs/IFOs/IEOs/etc.) and decentralized finance in particular, its applications have been limited to a number of events.

With NFTs, the opportunities have been greatly amplified due to factors such as uniqueness, ownership and liquidity, which in fact have made it possible to connect real, everyday cases to the Blockchain.

NFTs are essentially decentralized applications that enjoy the benefits and properties of the underlying public ledgers, so NFTs can be verified, minted, sold, and purchased with publicly verifiable data and business records stored in a theoretically persistent manner without being manipulated once transactions are deemed confirmed.

Thanks to the NFT has literally exploded the gaming industry and several are the “crypto-games” that are depopulating, not only among young people, there are many opportunities for both fun and gain (just think of breeding games) and thanks to digital collectibles have established and enhanced the industries of trading cards, digital images, virtual real estate, domain names, diamonds, and much more.

The future of NFTs and the Blockchain also addresses the Metaverse industry by creating a shared virtual collective space that enables different types of digital activities, in a decentralized environment ideal for the online virtual world.

FRAUDULENT ACTIONS AND INTELLECTUAL PROPERTY

Although the blockchain allows the verification of records minted to generate NFTs, most (almost all) of these are pseudo-anonymous, malicious users can hide even partially their identity and exploit this opportunity for personal interests that are not always legal.

The case of artist Derek Laufman has recently been well documented.

On Rarible, a site where people can buy NFT, a verified profile had appeared that supposedly came from him, meaning that someone took the time to impersonate him throughout the verification process on the platform .

“I was basically annoyed that someone had verified me on that platform,” Laufman says. “For years I’ve been dealing with the theft of my art. And I’m kind of numb to that. But when someone claims to be you … that you know, it pisses me off !”

But only after a few people reported the theft and Laufman launched a few messages on Twitter did Rarible remove the profile, but not before one of his fans had purchased an NFT.

 

This is 100% NOT me. I thought the point of NFT was that the artwork and artists needed to be verified? Apparently super easy to scam people. What a joke that platform is. https://t.co/FrBy4zuhQy

— Derek Laufman (@laufman) March 13, 2021

 

OTHER CASES

A hacker returned $336,000 to a British collector after tricking him into buying a fake Banksy NFT advertised through the artist’s official website.

Recently Karan Singh, a Brooklyn-based digital artist who has also worked with companies like Apple, reported a fraudulent copy of his work also on Rarible.

According to Ilya Komolkin co-founder of Rarible, another user pretending to be Singh got the artist’s work and then put it up for sale on the platform… things that happen :-( .

So the creation of NFTs on the blockchain mint and sell digital works (but the example could be extended to any form of NFT produced), but since anything on the blockchain can be tokenized through an immutable record, any person could impersonate who they are not, to copy it, create an NFT, and sell it online.

As we have seen at the current stage the ownership of NFTs is still poorly studied, most transactions are mainly based on the Ethereum platform, which only provides pseudo-anonymity.

Users can actually partially or completely hide their references, since the links between their real identities and the corresponding public addresses are unknown to the public.

DATA ACCESSIBILITY

Next to privacy and intellectual property, an issue that should not be underestimated ( as written HERE ) is data accessibility.

In major NFT projects, instead of using the physical copy of the file, the cryptographic hash of that file is taken into account and used as an identifier.

Several NFT projects integrate their system with a specialized file storage system such as IPFS in which IPFS addresses allow users to find a piece of content so long as someone somewhere on the IPFS network is hosting it.

When users “load” NFT metadata onto IPFS nodes, there is no guarantee that it will be replicated across all nodes, in fact these can suddenly become unavailable if the resource is stored on IPFS and the only node storing it is disconnected from the network. Read here decrypt .

An NFT could point to an incorrect file address and in that case, a user would no longer be able to prove that they actually own that NFT.

In practice, the inability to prove full intellectual property ownership of a work and relying on an external system as the main component (storage), is another proof of vulnerability for an NFT system.

TICKETINGOFF

TicketingOff is a startup, a case of success, that leveraging the uniqueness, ownership and liquidity of Technology, created Ticket NFT.

When we buying tickets for events, consumers must trust the sellers, so there is always the risk of buying fraudulent or invalid tickets, which can be counterfeited or cancelled at any time.

The same ticket can be sold many times or fraudulently obtained by extracting the online image from the ticket, in an extreme case.

In contrast, the ticket based on NFT Technology is unique, and consumers can buy and sell the crypto ticket from the smart contract reliably, rather than relying on third parties.

Using the Smart Contract and blockchain, TicketingOff generates a unique Ticket associated with the Public Key of the wallet, providing a transparent exchange platform for the event organizer and the end customer.

TAKAMAKA NFT.

As you know Takamaka allows you to pay Smart Contracts and perform Upload of files on the Blockchain also paying with stablecoin, which is always worth 1 USD.

Whoever decides to pay transactions and expenses with the stablecoin, with the advantage of having certainty and stability of costs, certifies his identity on Takamaka, with the KYC procedure and registers a public key with 1000 aliases.

Takamaka NFT is in its final stage, the project bases its complexity and its structure on the resolution of the current problems highlighted and not yet resolved by other technologies undoubtedly more emblazoned.