NFT Authenticity

Three Compelling Arguments about Digital Authentication

Here’s a shocking statistic — According to the Organisation for Economic Cooperation and Development (OECD) it is estimated that counterfeit and pirated goods account for between 3–5% of global trade each year. That’s upwards of $500 billion flowing around the world in imports and exports. That’s the physical goods. If you add in the value of pirated digital services like streaming film and music, plus software piracy, that figure grows closer to the $1 trillion mark, with almost $225 billion accounted for by domestic US piracy alone. Which means authenticity — and proving it — might just be one of the most valuable things in the world.

The Strange Psychology of Consumer Trust

The problem with authenticity is trust, and how humans develop trusted relationships. This creates some really complex psychological dilemmas for most people when it comes to knowing who to trust. Here’s some examples of why we need to re-evaluate our assumptions of who to trust in the commercial world.

Museums?

It might seem unlikely, but in a number of high profile museums, investigators have found almost 20% of artworks on display to be either counterfeits or misattributed to the wrong artists. Notable works by Goya, Rembrandt, Modigliani and Terrus have been the subject of high profile scandals, and some art experts estimate around 50% of all museum inventory could be counterfeit or misattributed. But we all trust museums, don’t we?

Vintage Icons?

High profile brands like Rolex, Ferrari and Gibson Guitars have well known problems with duplicate serial numbers on vintage products, leaving owners unsure of their authenticity. These are expensive, rare items from pre-digital record keeping that come under scrutiny at auctions all the time. For example, I own a Gibson 345 Stereo that was made in 1969 with the same serial number as one made in 1972. They made a lot of serial number admin errors at Rolex, Ferrari and Gibson USA (to name but a few brands) which make vintage counterfeits even harder to identify. But we trust iconic brands, don’t we?

Online Marketplaces?

In 2019, research conducted by Incorporo and Sapio in the US and UK revealed that around 30% of online shoppers had mistakenly bought counterfeit goods in online marketplaces, averaging $79 per person. But we trust Amazon and eBay, don’t we?

Do We Trust NFTs?

One statistic that probably won’t surprise you was reported in April this year, when OpenSea estimated around 80% of its NFT sales were artworks using stolen IP. Oddly, this seems less shocking than museums or famous brands with authentication problems. That is because we naturally trust established, long-lived, familiar things like museums and manufacturers over digital newcomers.

If you consider email spam, phishing scams, so-called fake news and social media chat bots, we hold the digital world to a pretty low standard when it comes to trust. Nobody is shocked to hear about a counterfeit Bored Ape, but it’s an international news story if someone buys a counterfeit Rembrant at auction. But that is arguably the opposite of how we should feel about it.

The Ironic Digital Twist in the Trust Tale

Here’s the strange thing about the psychology of trust. Most people don’t have the technical skills to authenticate an artwork, or a vintage watch, classic racing car or 1960’s guitar. Luxury goods, fast moving consumer fashion, gems, tickets and bank notes are difficult to verify and require expert knowledge to do so. However, NFTs are actually easy for anyone to authenticate and therefore, more trustworthy than your local museum.

Autentica has pioneered authentication tools for creators that mint unique IDs into each piece, proving NFT authenticity. Nobody can copy Autentica minted files, even if re-mint with the copied artwork on the same blockchain or another, their certification app will spot the counterfeit. Autentica creators make art that can’t be counterfeited. You can see for yourself with their authenticity checker here.

Of course, blockchain records and wallets IDs are matters of public record too, and vital when it comes to authenticating NFTs minted without Autentica protection, providing more ways to check if that NFT is genuinely from a legitimate source or not.

That’s right. I just argued that NFTs beat museums, iconic brands, auction houses and about 5% of global trade when it comes to being easy to prove authentic or not. Which means the thing we value most of all isn’t the item itself, but the ability to authenticate it. So should we value authenticated NFTs higher than we currently do?

Join the Autentica Telegram channel or Twitter feed and tell us what you think (yes, I’m on it) — and what you need to secure your own copyright IP artworks…

Written by Andrew Keith Walker for Autentica.