“The future of NFTs depends on measures to combat fraud”

Art and music found in non-fungible tokens (NFTs) a way to thrive in the new normal, but this nascent ecosystem requires fighting fraud to protect artists and consumers. This was the conclusion of the panel discussion that analyzed the boom in collectible tokens at the MIT Bitcoin Expo, one of the most important academic conferences on blockchain in the world, which this year took place between April 3-4.

The debate on the NFT was in charge of the artist and musician André Allen Anjos, better known as RAC; Miles Anthony, leader of the Decentraland project and Eric Pino, president of the Blockchain Education Network, an organization that helps students interact with cryptocurrencies.

The trio of specialists agreed that NFTs represent an evolution of the cryptocurrency ecosystem that is powering the world of games, art and music. But, like all disruptive technology, have unresolved issues, such as scams that have already been revealed.

Many of these scams have to do with forgeries or plagiarism that copy both the NTFs presented on a platform, and the website dedicated to the trading of these assets. The way fraud is spreading across the web it would end up affecting the community that in a short time has grown at an accelerated rate, as noted by the panelists.

To combat fraud, Eric Pino proposes to adopt a formula introduced by Satoshi Nakamoto in Bitcoin to incentivize trust in decentralized systems where anyone can read and write data. Based on its zero trust model, Bitcoin encourages its community to verify rather than trust.

Everyone can start creating NFTs to participate in this ecosystem, but on the other hand, there is fraud and there are copycats, so let’s take advantage of the benefits of blockchains and check if the data is registered. We must also eliminate all fraudulent. Trading platforms and galleries have to assume their responsibility, so they should not allow users to find on their sites publications that do not meet the technical requirements ”.

Eric Pino, president of the Blockchain Education Network.

At this point, Miles Anthony spoke of the Decentraland gallery, where he believes they have found a way to prevent fraud. “When you display what you want, such as your artwork in NFT, an interested user can click on it and learn the details of the purchase, but the actual artwork and the artist’s data are also linked there. I have seen that more and more galleries of digital art are appearing and I believe that it is important that all consider that it is important to integrate security in their systems, “he said.

The panel also mentioned domain name registration on the blockchain, another use case for NFTs that can be useful to protect the ecosystem itself. When a name is registered on a blockchain, it remains there as a one-of-a-kind asset, which it would prevent the emergence of thousands of registries that copy the names of platforms of commerce or galleries already known as Rarible and OpenSea.

Many of these duplicate domains from well-known platforms end up becoming fake or replica sites that bad actors are launching to catch unsuspecting users to whom they sell knockoffs or fake tokens.

However, “blockchain domains function as unique assets, do not allow duplicates and are issued as NFTs with the owner’s name to offer greater security and reduce the chances of fraud,” said Eric Pino.

Ecosystem insiders such as the CEO of Decentraland, the musician RAC and an educator from the world of blockchains participated in the NFT panel discussion. Source: Screenshot mitbitcoinexpo.org.

NFT, an ecosystem without copyright

Manish Kumar, a member of the MIT Bitcoin Club family, who was the moderator of the conference, asked the panelists if they thought it was necessary to go to the institutions to regulate the NFT ecosystem and decide what the rules will be to protect. to the consumer. None agreed that this was the way, rather they agreed on the value of verifying the data and that the artists themselves protect their reputation in the digital world where blockchains bring transparency.

It happens that the NFTs include information about a certain artist and his work, but that information is not usually registered on the blockchain itself. Therefore, the blockchain does not guarantee the copyright of artists, nor are there bodies or institutions that grant rights to works that exist in the digital world. Therefore, the recommendations revolve around the authors protecting their creations, according to the panelists.

I actually think there is a huge disincentive for artists to protect their reputations. It may be that many have not realized that their reputation is at stake and that it must be protected for all this to be long-term. What I have personally tried to do is basically be very public with my audience so that they can be in tune with everything I do and when they decide to purchase one of my creations, they have a way to verify it.

André Allen Anjos, artist and musician.

The specialists also raised the idea of introduce decentralized digital identity into the NFT ecosystem. They believe that doing so would create a framework of trust in which artists could integrate their unique identifiers into their works. In this way, the verification of any information is facilitated, as well as the exchange of data using blockchain and distributed ledger technology to protect creations and carry out secure transactions.

Decentralized digital art?

The NFTs represent a work of digital art, but the image itself is hosted on the servers of the platform on which it was created. Then the Traditional URLs pose real problems for collectible tokens. It means that if the website somehow goes down or the domain owner forgets to pay their hosting bill, everything will just go away.

“I think that, just as we must introduce decentralized digital identity into this ecosystem, we must also introduce decentralized storage systems. All these revolutions that are happening at this time, do not occur in isolation, taking advantage of them together will be convenient to get more out of the NFT ecosystem ”.

Eric Pino, president of the Blockchain Education Network.

They mentioned that some NFT creators are turning to a system called IPFS, or Interplanetary File System. Rather than identifying a specific file on a centralized server, this p2p method allows you to store and share data on a distributed file system. It means that instead of depending on a platform or market, a digital art creator can make sure their NFTs stay online by hosting it anywhere on the network.

Despite the recent popularity of this market, the current problems with NFTs are due to the fact that the ecosystem is still in an experimental phase. There are many use cases that have emerged and others will emerge in the immediate future “because we are just seeing the tip of the iceberg of this revolution, according to the specialists.

While new use cases are being discovered, due to the interest in NFTs, there are around 800,000 new addresses on Ethereum. As CriptoNoticias reported recently, there has also been an unwanted effect, with transaction fees being a “growth pain” from using the network. As a consequence, many users see Binance Smart Chain as an escape route.