To change the art industry, NFT must be safer

2021 has witnessed many notable milestones. Irreplaceable tokens (NFT) market, increase Value has increased by 2,100% starting in the fourth quarter of 2020, and consumer spending has exceeded US$2 billion. Although the headlines have been dominated by record-breaking sales, what is often overlooked is the growing demand from new investors. according to For NonFungible, which tracks NFT transactions, there were 73,000 NFT buyers and 33,000 NFT sellers in the first quarter. Although these numbers look impressive, they are actually relatively small compared to the global art market. Pay attention to In 2018, it was 64.7 billion U.S. dollars, of which the United States, China and the United Kingdom accounted for 84% of the global market.

The traditional infrastructure of the art market dominated by dealers and auction houses seems to be outdated in an increasingly online and globalized world, and the demand for such assets in emerging markets will only grow. People may view the COVID-19 pandemic as a catalyst to destroy the existing art market infrastructure. At the same time, the NFT market does give us a glimpse of how to apply smart contract technology to ensure that third parties and middlemen who usually require reductions can be removed. However, as far as the current situation is concerned, the current infrastructure has too many defects and the possibility of user error is too great to actually replace the current verification, distribution, auction, and ownership verification methods.

related: The hype is over: how NFTs and art will benefit from each other

Today, there is no way to determine who the real human creator is by looking at the data contained in the NFT. The result is more and more cases of NFT counterfeiters and scammers creating NFTs and presenting them as works by specific well-known artists. A quick Google search on the subject revealed that NFT forgery is a rapidly growing problem. In some cases, scammers will obtain images of actual works of art from artists, convert them into NFTs, and then sell them as the artists themselves.

In addition, when the NFT has important related content or data (such as images), the data will not be stored on the blockchain. In contrast, NFTs contain links to data, most commonly via hyperlinks on the Internet. If the data (for example, an image) at the end of the hyperlink changes or disappears, it is impossible to know or prove from the blockchain data what the actual image is associated and purchased with the NFT.

Therefore, there is no way to protect the permanence of NFT data. Shocking, but it is true. This means that the actual images or data related to the NFT may be changed or deleted, thereby destroying the value of the NFT. There is also the possibility of user error, that is, people mistakenly copy long and complex addresses or suffer man-in-the-middle attacks, which may cause millions of dollars to be sent to the wrong address or be stolen forever.

Authenticity verification

In the real art world, artists sign their works to verify their authenticity, and the owners of the artwork ensure its permanence by storing it safely in a place they trust. In order for NFT to achieve long-term success, blockchain technology must be able to achieve similar functions and be implemented in a decentralized and autonomous manner.

We don’t know what the long-term impact of the ongoing COVID-19 pandemic will be on the art world. Looking back on the past, people may find that it is a catalyst for a long overdue disruption and greater competition against a cartel that is still essentially composed of high-end auction houses and dealers with different reputations. Smart contract technology has shown how NFTs can reduce these middlemen; however, despite the clear demand, the operational risks and the possibility of fraudulent transactions make the current transaction model too risky to expand.

NFT forgery prevention and permanent protection are critical to leveraging the continued growth of NFT in the entire blockchain ecosystem, ensuring a fairer, more transparent and fairer system for art buyers and sellers. The future art ecosystem is obvious, and we as an industry need to start building it.

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