AI Can Detect Fake NFTs
With the rising prevalence of fake non-fungible tokens (NFTs), artificial intelligence is a key factor in quashing this problem. In our Crypto Tax article, we explore how AI can trace these counterfeits and make sure to eliminate them from circulation. So keep on reading on!
The permissionless internet holds great promise, but it also has a dark side: anyone can easily create fraudulent nonfungible tokens (NFTs). There are roughly 90 million of these fake NFT copies in circulation.
A mere 20 of the most replicated NFT projects account for a whopping 8 million fake replicas circulating throughout various NFT marketplaces.
NFTs are only valuable due to their originality, and replicas of these digital tokens offer no tangible worth for consumers. Not only do they present a financial loss, but also put creators and buyers in an unfavorable light – something particularly damaging during the beginning stages of the burgeoning NFT industry.
The concept of ‘nonfungibility’ and rarity are what make NFT assets so attractive to long-term adopters. As these digital tokens can be one-of-a kind, they create a certain level of reliability that many people find desirable. However, the data linked to them through metadata can still be susceptible to manipulation or removal; this is one of the primary technical issues faced by creators in this space today.
In this modern digital age, it is paramount that NFT marketplaces take decisive action to shield both buyers and creators from counterfeits, duplicates, and infringements of intellectual property.
As NFTs skyrocketed in popularity, Copyminting has been growing right alongside them. In 2022 alone, sales counts surpassed the 101 million mark and were 67% higher than the 2021 figures—defying all expectations during a year of bearish tendencies. January 2023 saw an impressive surge to reach over $1 billion across marketplaces monthly as trading volume spiked. Predictions have pointed towards this industry becoming a spectacular$231-billion market by 2030! Furthermore, trademark filings related to NFT also hit new heights last year—solidifying that its expansion is only accelerating at unprecedented speeds.
As the demand for NFTs rises, so too do malicious actors looking to exploit unsuspecting buyers. One of their most frequently used tactics is “copyminting” – duplicating popular NFTs and misrepresenting them as originals. Bored Ape Yacht Club serves as a salient example of this; while they have just 10,000 certified original assets, more than four million counterfeit copies are in circulation!
Copymints typically update originals with small adjustments, such as highlighting, mirroring and adding borders or pixelating effects. Other modifications consist of resizing images, changing color palettes and incorporating dissociated texts or emojis.
Scammers are taking advantage of filters to craft false NFTs. It’s become tough for users to know the difference between genuine and fake collections since copyminters have begun producing pixel-by-pixel replicas with spoofed blue check marks and brand logos that aren’t authorized. With hundreds more NFTs being added every day, manually verifying them is becoming a herculean task.
Artificial Intelligence (AI) can be leveraged to bring authenticity and uniqueness back into the realm of Non-Fungible Tokens (NFTs). Restricting access to mint NFTs would go against Web3 principles, hence posing a difficulty for NFT marketplaces. To circumvent this issue, AI technology is an ideal solution that offers unparalleled authenticity with no loss of autonomy.
NFT marketplaces, brands and creators require solutions that can effectively detect counterfeit items without hindering access or controlling these platforms. Artificial Intelligence-powered content recognition and fraud prevention systems are making a remarkable impact toward this goal.
AI models are a revolutionary anti-counterfeiting force, capable of detecting counterfeit goods with an accuracy that surpasses the capability of any human eye. This technology can analyze hundreds of millions of assets in one day and guarantee 99.9% accuracy – particularly relevant as NFT projects become more commonplace.
In addressing the problem of counterfeits in the NFT space, pioneering solutions are paving a more optimistic future by using immutable on-chain data to identify genuine and counterfeit NFTs. With authenticity and dependability restored, investors can maintain faith in these assets which will draw increasing institutional capital investment as well as encourage adoption into an established mainstream industry for years to come.
Crypto Tax Calculator Australia is an important and useful application, which takes the hassle and stress out of crypto calculations. Customers simply upload their CSV file into the application and moments later recieve their tax report. This report can then be used at tax time by either lodging it themselves or their tax agent lodging it for them. We encourage all our Australian customers to use this tool to make tax season less stressful.