By Vijay Pravin Maharajan
The history of non-fungible tokens (NFTs) can be traced back to 2014, but has been one of the most important use cases of blockchain technology since the concept first exploded in 2020. .. NFTs are immutable like any other artifact. , Rare, and transferable, but so are digitally preserved items that can be verified using blockchain technology.
Today, NFTs are gaining momentum in the gaming and entertainment sectors. From celebrities approving tokens to gamers earning NFT rewards through play-to-ear games, digital artist Beeple sells his artwork “Everydays – The First 5000 Days” at Christie’s in March 2021 for $ 69 million. Since then, NFT has become a phenomenon.
However, when it comes to security and privacy concerns commonly associated with the current crypto ecosystem, inventions that are not yet mainstream are not far from the tree. Words like counterfeiting, theft of personal information, soaring price levels, and clothes trading are thrown daily even by the most common proponents of the cryptocurrency industry.
The problem goes deeper. The centralized NFT marketplace is prone to cybersecurity and identity fraud because the platform collects the private keys of anyone who wants to buy, own, or sell NFTs. Unless the market deploys tamper-proof solutions, hackers could find vulnerabilities in smart contracts and steal NFTs from users.
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In addition, given the translucency of blockchain technology, it’s easy to find all transactions connected to a user’s wallet by revealing their association with a single NFT. Wash trading is a commonly known phenomenon in the NFT ecosystem, where a trader buys and sells the same digital item several times to artificially inflate its value.
As we see today, the ecosystem is full of privacy and security concerns that can be seen as a major setback in its adoption. On the other hand, denying the possibility of NFT may not be the correct answer. Just as blockchain technology has revolutionized the world economy, non-fungible tokens have the ability to solve real-world problems such as ownership, authentication, and authentication.
For example, NFTs can be used in the medical industry to protect medical records from tampering. In the entertainment industry, tickets can be sold in the form of NFTs for movies and concerts. On the other hand, in the real estate sector, NFTs and blockchains can be used to efficiently check the ownership history.
Questions and concerns about NFTs are valid, but they are not without solutions. Several companies and data analytics companies are working to provide tools and solutions to protect the industry from illegal activities and operations. Top Marketplace OpenSea recently introduced measures to improve NFT authentication, updated the account validation and collection badge system, and provided an automated system claiming to identify, delete, and prevent instances of “copy mint”. I am.
Necessity drives innovation. Technology, at various stages, entailed a unique set of challenges that were identified and eradicated to enable widespread adoption and progress. It should be noted that NFTs and blockchain technologies may require significant development, but their benefits far outweigh the solvable concerns.
(The author is Bit Crunch Founder and Chief Executive Officer.. The above views are the views of the author, not necessarily the views of financialexpress.com)
(Cryptography and NFTs are not regulated in India. The risk of investment is considered to be very high. Please consult your financial adviser before making an investment decision)
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