We need NFT authentication systems yesterday.
2021 was quite an eventful year. It has seen the second year of the pandemic, President Biden’s inauguration, the Afghanistan and Ukraine Crisis, and the Omicron variant among others. 2021 has also seen constant headlines of a new technology called NFT. It is a scene that is still in its infancy, yet NFTs are already being traded for millions of dollars. With this much money at stake, it is surprising that there is no dominant authentication system out there to prove both NFTs’ legitimacy and originality. With every headline of another multi-million NFT being sold, there is another one of an artist finding his work stolen and sold as NFT, or an innocent NFT trader figuring out his or her NFT is illegitimate. Scammers use the open-source nature of blockchain, that NFTs are based on, to claim ownership of content that isn’t theirs. What is the state of NFT security as of writing this article?
Every NFT comes with metadata to authenticate ownership. While metadata does list a lot of helpful information, it does not help you link the NFT to a real person. In addition, it also lacks information about whether the NFT creator owns the NFT or has the rights to it. Some NFTs come with digital certificates. Digital certificates list the NFT’s creator and signature. Yet not all NFTs come with certificates and not all certificates are authentic. On top of that, the biggest NFT trading platform, OpenSea, does not do any authentication whatsoever. There is no NFT verification protocol, instead you, the user, have to research its legitimacy on your own if you so desire. In conclusion, oftentimes there is no way to determine if the NFT one is purchasing is legit.
What would an implementation of an NFT authentication system look like? In a perfect world, every existing artist would be registered in some form of authentication database. Now every NFT could be linked to an artist thereby having a flawless authentication system. In a not-so-perfect world, aka our world, we could still see the implementation of one or multiple competing authentication systems with only a limited number of registered artists, however, that would already be enough to cover high-profile purchases.
There needs to be a clear visual distinction between NFTs and authenticated NFTs on big trading platforms. A visual distinction could be a blue checkmark or even better a watermark. This would help authentication to increasingly get noticed by the NFT userbase, then sooner or later be the preferred choice if not even demanded. We see the same timeline across various Big Tech companies that couldn’t be more different but have all shown the same results. Gaming giants like Nintendo have in the Wii-era introduced “Nintendo Selects” to prove a game’s standard of quality. Amazon has introduced Amazon Basics, a “seal of quality”, and official statistics now show these products outperform the competition. And Dating-platform Tinder has introduced a blue checkmark to verify if a user’s pictures are real. In all these different cases verification systems have quickly established themselves.
It is just natural that any industry that grows profitable will concurrently attract scammers as well. Being there, it is now about time to introduce authentication systems. Let us future-proof the NFT scene and make it resilient so that it transcends the trend cycle and benefits us for many years to come. I am confident that this will be attainable.
About CenterPrime
The CenterPrime project uses a hyperledger private chain to share an open banking API to apps, connecting centralized finance to decentralized finance. Also making smart pairing data for loan, remittance, exchange, payment, and exchange rate information possible to be included in fintech oracle networks.
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