Eliminating NFT Pain Points Should Be A Top Priority

Although NFTs have been around for several years, they’re only now gaining traction among the public. Last quarter, the NFT market recorded $2.4 billion in transactions (up from $210 million for all of 2019). Artists and gamers have reaped most of this wealth, and they continue to propel the market with voluminous NFT for sale.

Unfortunately, the market is still experiencing growing pains. For instance, NFT collectors are finding it necessary to authenticate NFT tokens with due diligence. Those that don’t often end up feeling cheating and aggrieved when they’ve been scammed.

Last year, a British art collector inadvertently purchased a fake NFT from Banksy, the world-renowned graffiti artist. The NFT, valued at over $335K, had been replaced with a digital copy.

Unbeknownst to Banksy, someone had hacked into his website. Once the collector realized it was not an NFT, he contacted the artist. Fortunately, the hacker returned his money to him by the end of the day.

And earlier this year, a digital artist named Monsieur Personne created copies of the NFT “ Everydays: The First 5000 Days “ (by Mike Winkelman). Personne succeeded in having several NFT platforms accept the copies as an original.

Although the original NFT had just sold at Christie’s for $69 million, the copies remained on sale until the platforms were notified they had a fake.

While prolific incidents like these make headlines, enterprising scammers are more likely to resell lesser-known artwork illegally as an NFT.

This type of theft is common for DeviantArt, a website that hosts amateur artwork. The website has recently resorted to using artificial intelligence to find NFTs that copy their content. Other artists are exploring the use of authenticity markers for their NFTs. Apparently, the NFT industry has yet to confront such security issues head-on.

DRM and Data Ownership As A Solution

Eliminating these pain points would help to ensure secure content delivery of NFTs. One way to do this would be to capture any data related to accessing or transferring an NFT. That would help to ensure that the NFT was appropriately verified and transferred via a smart contract.

Another problem facing NFT owners is that their tokens are not subject to any digital rights management (DRM) system. Without a DRM system, there is no way to ensure that any view of an NFT is limited to the owner and no one else’s.

In practical terms, this means that NFT owners cannot restrict viewing access to their tokens (as there is no exclusivity).

Consider an NFT nominated as “Worst NFT Ever.” An authenticated jpg image of Grumpy Cat, the world’s most famous feline. Although it sold for $77,000 last March, the new owner does not retain exclusive viewing rights to the photo.

One way to get around this problem is having NFT owners retain full ownership over their NFT data. They should also have complete control over who can view their NFT (as well as for what purpose in any particular context).

If the NFT market is ultimately to succeed, it needs to instill NFT buyers with confidence. Ensuring that the assets they purchase are the “real deal” should be the first order of business. The NFT industry is only now beginning to recognize this need, however.