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NFTs: Buzz, Fakes and complications

Updated: Mar 21, 2022

In our previous article on NFTs (non-fungible tokens) we discussed the different uses of this technology while highlighting the risks of counterfeiting and misappropriation of intellectual property... Today we invite you to enter the detail of this problem through this article.

Femme avec des jetons NFT autour d'elle
NFTs buzz and fakes.

The NFTs madness

Reminder: An NFT (non-fungible token) is associated with a good and attests to its ownership. It is the proof that a physical good (a work of art for example) or a digital one (like an existing object in a video game) belongs to you… An NFT can only have one owner at a time. Non-fungible tokens are carried by blockchain technology which allows them to be timestamped.

Buzz, trending, however you want to define the current situation related to NFTs, today it is hard to deny that a frenzy has gripped some individuals but also companies. Gucci, Louis Vuitton, Roksanda, Givenchy, Bulgari, Burberry, Bugatti, Dolce & Gabanna (to name a few) are among the many brands to have embarked on the NFT adventure. Beyond attracting media attention, non-fungible tokens are now seen as marketing assets. Indeed, the blockchain and the NFT allow luxury brands (or not) to create a special contact with their customers and to cultivate it over time. Moreover, Eric Briones in an article for the Journal du luxe explains that web3 and luxury are made for each other because they share many characteristics such as exclusivity and rarity.

So everything seems to be just fine ?

Portrait d'une femme tenant un téléphone portable
Beware of scams !

Not really. NFTs are no longer, like a few years ago, a barbaric term known by a few insiders. Admittedly, the term remains vague for many of us but it is on more and more lips. If some are still trying to grasp (rightly) the tenants and the outcomes of what an NFT is, the number of buyers is growing. According to a study by Ifop, already 3.5% of French people hold non-fungible tokens. It is enormous! Still, buyers and future buyers of NFT should beware as more and more scams come to light. These scams have a beneficial effect for all players in this market: brands and creators whose creations are Used without their consent to create NFTs, buyers thinking of acquiring rare and authentic NFTs, and trading platforms who see their reputation undermined.

Brands don't hesitate to step up and that's what Hermès and Nike are doing. Hermès has filed a complaint against an artist who created and sold in the form of NFT fur bags proposed MetaBirkin and strongly inspired by the Birkin bags of the famous Maison. Hermès accuses the artist of getting rich quickly through the use of the Birkin brand and of actually being a digital speculator. The artist denied and retorted that his art even if it remains digital is similar to that of Andy Warhol and his canvases representing Campbell tin cans. For its part, the comma company has filed a complaint against StockX, an online sales and auction platform specializing in basketball. Nike accuses the e-Commerce site of having sold at least 550 NFTs with its logo without the sportswear company's consent. These two cases are a drop in the ocean of "counterfeits" present on NFT marketplaces.

Trois lettres N,F et T et une tête de statue de style antiquité grecque ou romaine
Fake NFT art are legions!

In 2021, artists have seen a boom in plagiarism of their works in NFT according to TheVerge. This organized and automated plagiarism is done in part by robots that extract images using keywords on Google Image and create NFTs from automatically generated text. These plagiarisms can be detected thanks to different tools, but the task of denunciation for the artists is heavy. If this plagiarism takes place on OpenSea (a very popular NFT marketplace) which recently recognized that more than 80% of the NFTs created for free on its site were fake, spam, or plagiarized works, artists must file a claim for each NFT created from their works! Some artists have identified up to several thousand fraudulent ads, the task promises to be daunting. OpenSea has announced that it wants to limit the listings of NFTs created for free on its platform to prevent this endemic plagiarism from continuing. But faced with the dissatisfaction of its community, the marketplace quickly changed its mind and reversed this decision.

cadre contenant un téléphone écran blanc avec l'inscription NFT en jaune. le cadre est entouré de billets de 100 dollars
Marketplaces can act!

Other platforms dedicated to non-fungible tokens are affected by this circumvention of intellectual property. The Cent marketplace, which sells NFTs (and officiated the sale of the Twitter co-founder's first tweet for $2.9 million), suspended its NFT sales in February 2022 (only tweet NFTs are still available). The co-founder and CEO of the platform explained that many NFTs listed on their site were unauthorized copies. The platform is now looking for a way to protect content creators and is considering centralized control in the short term. Rarible, another marketplace, implemented in early 2021 the possibility for sellers and creators to link their social networks to their account and made ads from unverified accounts invisible during searches on the platform. In addition, a moderation and verification system by humans has been created. Since then, complaints have dropped by 90%.

Many today talk about NFT platforms which have become the new digital Wild West. It's not that simple... Solutions exist to limit the dangers, but they often require human and financial costs that not all marketplaces are ready to bear. Buyers should also exercise caution. Indeed, brands that are already creating their own NFTs can assure buyers of ownership of genuine digital goods. We find the same problems of counterfeiting and violation of intellectual property rights that we have suffered online and in traditional/physical commerce for a very long time.

What should you do if you want to buy NFTs?

Ordinateur portable ouvert avec une inscription sur l'écran "non fongible token NFT" et des piles de jetons éparpillées sur le clavier
Go beyond the speculation.

First, don't trust too-good-to-be-true ads on social media. Only buy from verified sellers and do some research: Has the brand or artist I admire announced that they are launching NFTs? If not, flee (or close the tab)! If the answer is positive, follow the links recommended by their official sites. You greatly reduce the risk of facing a scam.

But why are you being told all this? Beyond the desire to alert you, we also want to remind you that NFTs are not just for speculation. Used in the form of an unforgeable digital duplicate of a physical product, it becomes its digital passport, its "gray card", thus certifying its authenticity, ownership, and origin. As the product passes from hand to hand, from owner to owner, its story continues throughout its life cycle. This is where Trust-Place's mission takes on its full meaning. Trust-Place works hand in hand with brands, allowing them, through NFTs linked to their physical products, to create a unique link with all their customers, including those they do not yet know. The Trust-Place solution allows everyone to verify the authenticity of the property, whether physical, digital, or virtual, and of its real owner, regardless of the acquisition channel.

Trust-Place, will of course informed you of future developments through insights like this article. To not miss anything, follow us on social networks and subscribe to our newsletter!



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