After hearing about NFTs for weeks on end, you finally decided to look into the phenomenon and learned that NFT stands for non-fungible token. If that didn’t give you any more clarity on the topic, you’re not alone. Thankfully, we’ve got you covered.
Non-fungible essentially means that something is unique and can’t be replaced. So, there’s only one Nyan Cat NFT, and only one autographed tweet from the founder of Twitter, and so on. NFTs can really be anything digital, and it has been touted as an evolution in fine art collecting.
NFTs and Unique Ownership
With a lot of current excitement around using the tech to buy and sell digital art, like this 50-second video by Grimes that went for close to $390,000, people are confused about the fact that you can technically still download files that others have paid hundreds of thousands or sometimes millions for, at no cost. But NFTs are designed to give you something that can’t be copied; ownership of the unique work.
While anyone can buy a Picasso print, only one person can own the original, and NFTs are designed to work very much the same way. There is, however, a clear difference here when compared to traditional art. While each NFT is unique in a technical sense, it could also serve as a trading card of sorts, where there may be a bunch of numbered copies of the same artwork. This, naturally, would then impact the perceived value.
Explosive Interest in NFTs and the Road Ahead
Whether you think that NFTs are the future of fine art collecting or just a fad, both the interest in the concept and the number of transactions taking place on a weekly basis continues to grow at an explosive and unprecedented rate, with seemingly no end in sight. With the increased interest and massive amounts of money exchanging hands comes well-known risks, like theft and the potential for money laundering. While some of the allure of blockchain, which NFTs are a part of, is that it stores a record of each time a transaction takes place. How safe a transaction might be depends on the measurements taken by the parties involved.
Many popular NFT marketplaces, which specializes in the buying, selling, and discovery of rare digital items, does not currently seem to have KYC (Know Your Customer) solutions in place, nor do they have anti-money laundering (AML) systems or proper screening procedures for buyers and sellers. With the traditional art world already being infamous for its money laundering problem, it seems as though the NFT industry could shortly be destined for a similar fate and reputation.
Making NFT Transactions & Ownership Safe
Thankfully, strict regulation of KYC/AML and proper implementation of Know Your Customer and Anti-Money Laundering standards can curb this rising problem and create a safer environment for the ever-growing phenomenon to reach unprecedented and dizzying new heights. With the world of NFTs still in its infancy, tackling these problems head on early could help push the digital tokens further into the mainstream spotlight and lead to more widespread acceptance of both the concept and the value of it.
We, at ZignSec, offer a plethora of best-in-class safety solutions for online ID verification and digital transactions like buying and selling NFTs. Whether it’s through Electronic IDs or other online ID verification solutions, we create user-friendly, automated, and easy to implement workflows for KYC/B & AML checks. Always with real-time results.
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Contact us today at sales@zignsec.com to learn more about how you can implement automated and compliant workflows for your NFT transactions and other digital experiences!
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