NFTs are authentic. They have to be authentic. That’s the whole point of NFTs, isn’t it? To own digital items without having to worry about originality or authenticity.
But the thing is, someone can manipulate the authenticity and put it for sale. So checking the authenticity is a very important step to ensure its legitimacy and value. And that’s what this article is all about.
NFTs & Authenticity: The Why
As NFTs continue to gain popularity in the digital art and collectibles space, it becomes crucial for NFT buyers to ensure they are investing in genuine and original pieces. And I can give you quite a few reasons why you should check the authenticity:
- Avoiding Counterfeits: Just like in the physical world, there is a risk of counterfeit or fake NFTs. Without proper verification, you might unknowingly purchase an NFT that has been copied or plagiarized. Verifying authenticity helps you steer clear of these fraudulent copies and supports the original artists or creators.
- Preserving Value: Picture this – You excitedly purchase what you think is a legendary CryptoPunk, only to discover later that it’s just a punk collection I’ve created. So you’ll end up losing the value of that JPEG coz it ain’t from a genuine collection, thanks to my creation.
- Preserving Utility: Most NFTs act as a key to something. It can be token-gated content, a ticket to a real-world experience, a subscription to an online tool, etc. But only the actual and the original ones will or can act as the key and not the duplicate ones.
Behind NFTs: The Blockchain & Smart Contracts
The blockchain aka the magical book that keeps on updating itself forever aka the book of truth is the foundation for NFTs.
NFTs exist on the blockchain, and each NFT that exists comes with a particular ID. For example, my NFT sujith.eth has a token ID of “6788060….2” and that ID is unique.
Now, all of these NFTs (.eth names) came from a Smart Contract. These contracts automatically facilitate the creation, ownership transfer, and enforcement of NFTs. All you have to do is ‘mint’ by paying $$$ (of course, in crypto) for that NFT to be yours.
This brings us to some really important questions…
- How do I know if I am minting from the right smart contract and not from some fake ones?
- What’s the gaurantee that someone won’t mint the same picture again and again on the blockchain?
- How do I know if something is original or just a copy?
Verifying The Legitimacy
Each NFT is linked to a specific smart contract, which dictates its ownership, transfer, and attributes. To ensure you’re interacting with the genuine smart contract, follow these steps:
- Source Verification: Research the official website or social media channels of the project or artist. Avoid clicking any links sent via DMs!
- Blockchain Explorer: Utilize blockchain explorers like Etherscan (for Ethereum-based NFTs) to verify the smart contract’s address. This ensures you’re interacting with the legitimate contract.
Researching The Project
Thorough research is key to identifying reputable NFT projects. Take the following steps to evaluate a project’s legitimacy:
- Creator Identity: Verify the identity of the creator or artist associated with the NFT. Genuine creators often have a digital footprint, portfolio, or social media presence that can be cross-referenced.
- Community Engagement: Legitimate projects tend to have active and engaged communities. Look for official social media profiles, discord channels, and platforms where the project’s team interacts with supporters.
- Project Details: Understand the project’s goals, vision, and roadmap. Legitimate projects provide transparent information about their intentions and plans for the future.
Understanding the Risks and Red Flags
Being aware of potential risks and red flags can help you avoid falling for fraudulent schemes:
- Too Good to Be True: Be cautious of NFTs that promise unrealistically high returns or overly extravagant features. If something seems too good to be true, it might be a scam.
- Unclear Origins: If the origin of the NFT or its associated smart contract is vague or difficult to trace, consider it a potential red flag.
- Lack of Information: Projects with minimal online presence or vague documentation could be suspicious. Always verify the legitimacy of a project before investing.
Validating the authenticity of NFTs is a crucial step to ensure that you’re investing (or collecting) in genuine and original digital assets. By examining the smart contract, and researching about the project more online, you can make informed decisions while supporting legitimate artists and creators.