How to prevent fraud in NFT marketplaces

Thursday 7 April 2022 08:49 CET | Editor: Alin Popa | Interview

Vijay Pravin, CEO of bitsCrunch, talks about the power of data and next-gen AI to act as a valuable control authority on the NFT market and create trust

What is bitsCrunch?

bitsCrunch is an AI-based company that focuses on NFT-blockchain analytics with its headquarters in Munich. They specialise in building core products that safeguard the NFT ecosystem. The aim is to solve problems in the NFT space, such as wash-trading, inefficient asset valuation, and digital art forgeries. 

bitsCrunch offers the following AI-enhanced products: Unleash NFTs, Scour, Liquify, and Crunch DaVinci. 

Unleash NFTs: A real-time portfolio tracker/analytical dashboard for NFTs.

Scour: An AI-based wash trading detection solution.

Liquify: Using AI to determine the fair value of NFT assets.

Crunch DaVinci: A digital forgery detection system that uses the next-gen AI.

The company, with modest beginnings, has now expanded to turn into one of the top 4 AI companies In Munich. 

Please explain what NFTs are, as if I were 5 years old.

NFT stands for Non-Fungible tokens. The term Non-fungible can be explained through the concept of fungibility. Any item is said to be fungible when it is easily replaced and interchangeable. For example, one dollar is worth one dollar and can be replaced easily with another dollar note or coins for the same value. Whereas an asset is non-fungible when it is unique and cannot be replaced easily. 

An NFT is a piece of data, usually in the form of art, that anybody can view or listen to. The fact that an NFT is stored on a blockchain defines it. A blockchain is a secure collection of data blocks that are mathematically linked together. It is incredibly difficult and expensive to break or change a blockchain. As a result, the NFT comes with a guarantee of authenticity, rarity, and provenance. That is, we know who owns it, where the current owner got it from, how many copies there are, and how much was paid each time.

Why are they relevant now?

NFTs are stored on blockchains that run under certain conditions. These conditions are termed Smart Contracts. Since NFTs are unique items, collectibles, or art projects, royalties can be incorporated into the smart contract for collectible art projects. When the NFT is purchased, a portion of the proceeds is automatically sent to the original creator's wallet. Thus, the original inventors are permanently linked to their creations. It is known as provenance. The best part is that artists will benefit as their work grows in popularity. 

It is one of many reasons why artists, creators, and developers find themselves allured to the world of NFTs.

What are bitsCrunch’s target customers? What do they aim to achieve by tapping into blockchain analytics services?

With the NFT marketplaces evolving like never before, the industry is attracting venture capitalist firms and celebrities to invest large sums of money. One of the important factors is the industry's readiness to develop faster on the technological front. 

The issue that comes along with such an advancement in technology is the potential for fraud and scammers within the space. Plus, a correct estimation of the value/price of such NFTs is not easy to come by. The solution for which has been provided by bitsCrunch.  

bitsCrunch uses the next-gen AI for its analytics, caters to the needs of a variety of people from a beginner to a professional in the field of NFTs, blockchain, and functions as a resourceful tool to steer clear away from scams and forgeries. 

Following JP Morgan’s announcement of entering the metaverse with a virtual lounge, has any traditional financial service provider wanting to expand into NFTs showed interest?

The most recent entrant into the Metaverse is the American Financial giant Mastercard with the idea of making NFTs more accessible to everyone. Their idea is to bring in a broader base of customers to the metaverse and be able to purchase NFTs or cryptocurrency with their Mastercard. And bitsCrunch will be incubated into the Master Start Path program shortly. 

Currently, users require a digital wallet, through which they buy digital currencies and then spend them in the NFT marketplace. Mastercard is seeking to change this and expand the number of choices for customers on how they can pay for NFTs. 

Another financial giant, American Express, has also begun exploring the opportunities where they get people to use their cards with networks that have stablecoins. 

How can we apply blockchain analytics to NFTs?

The way companies function evolves as technology develops. Organisations now compile and analyse data to make informed strategic decisions thanks to data analytics. This is especially true in the realm of network forensics and security; wherein early detection of security problems is vital for minimising damage. Experts can improve the security of their networks from vulnerabilities and identify unauthorised or malicious activities by applying data analytics. 

  1. Keeping track of which NFTs are transacted and what their exchange values are;

  2. Analysing user activity on NFT-using apps to better understand how they are used and what improvements should be made; 

  3. Keeping track of the origin of digital art to assure the authenticity and avoid fraud. 

A follow-up on transaction data, transaction history, digital assets, digital artwork, and all public data is required to verify that NFT initiatives are complete.

How do you see the space around NFTs evolving over the next 5 years?

NFTs have almost a limitless number of applications. Some predict that in ten years, all purchases will include NFTs. Others believe that smart contracts will eventually supplant legal paperwork. Many people believe that NFTs are a gimmick or that they are too esoteric to be broadly adopted. Major companies like Meta, Twitter, Reddit, and Visa are paying attention to the trends of the industry keenly and are working to ensure that they don't miss out on the NFT craze. The latest and upcoming trends in the world of NFTs are: 

  1. NFT Ticketing

  2. Financial NFTs

  3. Scaling blockchain and websites

  4. NFT streaming

  5. NFT Gaming

  6. NFT Art 

About Vijay Pravin Maharajan

Vijay Pravin Maharajan is the founder and CEO of bitsCrunch, a startup based in Germany and India. The company was launched in May 2020 in India, then later established in Germany in 2021. Young Vijay is a Blockchain/NFT expert who sees tremendous growth in these new areas requiring cutting-edge technologies. 

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Keywords: NFT, blockchain, data analytics, artificial intelligence, smart contracts, metaverse
Categories: DeFi & Crypto & Web3
Companies: bitsCrunch
Countries: World
This article is part of category

DeFi & Crypto & Web3


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