NFTs Cybercrime: “Non-Fungible Tokens (NFTs) are revolutionizing the art world“. We have heard this many times and noticeably more often since the industry’s substantial growth in 2021. Without a doubt, NFTs have unlocked new opportunities for revenue generation for artists and creators. However, as NFTs become increasingly popular, their use has expanded beyond the art market. Entertainment, gaming, healthcare, real estate, and multiple other industries are seeking to benefit from NFT development. According to a recent report by Grand View Research (GVR), the market is expected to grow to $200 billion by 2030.
Non-Fungible Tokens are unique digital items that store information in an online ledger called a blockchain. Blockchains are immutable; hence, NFTs provide complete ownership and authority over a particular digital or physical asset to their owner. When NFTs are traded, it becomes essential that the technology remains safe from cybercrime and fraud. Cyber security hence has become a core part of industries and sectors worldwide.
NFT fraud as a major problem
Unfortunately, illicit activities are commonplace in the NFT market, with many NFT collectors, artists, and projects suffering as a result. Phishing scams, wash trading, fake projects, and price manipulation are other common forms of malicious activities that harm the industry’s credibility. While NFTs offer a true sense of ownership to their buyers, counterfeit NFTs have become so ubiquitous that nearly 80% of the NFTs minted on OpenSea, a popular NFT marketplace, are fake.
Quite a few NFTs are sold at exorbitant prices, and while some NFTs are indeed that valuable, a lot of them have increased price tags due to unchecked hype around NFT projects and wash trading. That term refers to an illicit activity where a trader sells and buys back their product to create artificial demand and increase prices. The utility of tokens is then misrepresented, which results in collectors paying more than the fair market value of the NFT. Also, a bunch of fake NFT projects is on the rise that tries to forge the style of popular projects to sell their tokens at disproportionate prices.
All of this, combined with a lack of market regulations, has resulted in the loss of trust in the industry as a whole. However, given the NFTs growing adoption and utilization in many industries, abandoning the technology altogether is not an option. The benefits far outweigh the challenges that come with NFTs, though measures are needed to prevent cybercrime and manipulation.
BitsCrrunch – Nfts Cybercrime
In this context, bitsCrunch offers risk mitigating, intelligent tools that prevent investors from investing in wash traded NFTs, counterfeit digital artwork, and price-inflated NFTs. Aiming for more trust and transparency, the company offers an intuitive NFT analytics dashboard called Unleash NFTs that provides in-depth analysis and research into the NFT space.
Founded by four data scientist professionals with over 25 years of experience, bitsCrunch is working towards a more transparent NFT ecosystem where data is more accessible and accurate for the benefit of both investors and artists. Along with Unleash NFTs, the firm offers risk management tools such as Liquify, which estimates the true value of NFTs; Scour, which detects if an NFT has been wash traded; and Crunch DaVinci, which detects counterfeit NFTs. All tools are powered by artificial intelligence and machine learning to carry out a valid fraud investigation.
bitsCrunch collaborates with big names in the industry, such as Coinbase Ventures, Animoca Brands, HashKey Capital, and, lately, ChainLink. To reach global awareness, the startup has also ramped up its community initiative to build more awareness of NFT security. Through a community of over 10,000 Discord members, 8,000 Telegram members, and 10 regional ministers across the globe, bitsCrunch aims at educating the wider Web3 community.
For the future development of the NFT ecosystem, bitsCrunch strives to detect and eradicate the most prevalent security issues, intending to create a safer and more enjoyable experience for new and existing members of the web3 community.