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James Carter

May 9, 2023

Is the NFT market needs AI power to combat forgery and inflation?

With the rise of nonfungible tokens (NFTs), a new age of digital investment and ownership began. In 2022, a record number of new NFT lines came out, and for the first time, the NFT market reached $50 billion in sales. But since the NFT business is a fast-growing digital market, it didn’t take long for fraudsters to take advantage of it.

Is the NFT market needs AI

In 2022, more than half of the NFT trades on the Ethereum blockchain, which is the most famous network for NFT trades, will be fake, according to a recent report. From wash trading to copycat collections, the NFT market went into 2023 with a number of important problems that could only be solved with advanced market data and analytics. It’s already hard to figure out what a good price is for an NFT since the difference between the floor price and the ceiling price can be huge. On top of that, bad market action only makes it harder for NFT users to decide how to invest or trade their NFTs.

NFTs from famous collections like the Bored Ape Yacht Club (BAYC) have a lot of value on the market, but it’s easy to use image files to copy the way the apes in the collection look and then make fake NFTs based on the copycat material. The BAYC collection will sell $1.53 billion worth of items in 2022. This is a good market for fake NFTs.

What happens when NFTs are fake

There are economic, legal, and social effects of fake tokens on the market for NFTs. If fake NFTs make investors lose faith in the community, they are less likely to invest again. If there isn’t much desire for NFTs, their prices will have to go down.

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Without the right tool, it would be difficult for NFT collectors to find a genuine NFT on the market and figure out where it came from. NFT buyers can no longer purchase fake material thanks to recent advancements in artificial intelligence (AI). bitsCrunch, a company that analyzes NFTs, just put out an AI-powered tool that checks major blockchains and markets for possible fake or copycat NFTs.

AI catches fake NFTs

bitsCrunch looked at the top 40 NFT collections on the Ethereum blockchain and compared them to the more than 800,000 assets on the top NFT marketplace, OpenSea. They found that 144 copycat NFTs look exactly like the BAYC collection. Also, 231 NFTs were marked as near-exact matches, and 814 NFTs were “extremely similar” copies.

The fake NFT problem is not unique to BAYC. AI-powered analytics have found tens of exact copies of other popular collections, such as Azuki, Otherdeed, and CloneX. bitsCrunch looks at real-time data to find fake information across blockchain networks and to flag newly created and already existing fake NFTs.

NFT price estimations based on AI

When users want to set a fair price for an NFT they want to sell, they often don’t have a good idea based on the floor price, which is the lowest-priced item mentioned for a certain collection.

When deciding the end price of a digital collectible, many things are taken into account, such as how often it has been traded, how much it was last traded for, and who bought it before. But the NFT Price Estimation tool by bitsCrunch uses AI to help buyers and sellers. The Price Estimation tool analyzes past data and metadata for an NFT, as well as the buzz around the collection on social media, to come up with more accurate price estimates. The goal is to find out what an NFT is really worth.

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The AI-driven machine learning tool has looked at more than 30 million NFTs from more than 2,200 groups in order to use advanced data and analytics to help the user decide whether to buy or sell.

The NFT space can only reach its full potential with tools that fight against problems like wash trade and forgery that have been plaguing the market for the past few years. Users require advanced analytics and intelligence that are AI-driven and displayed on simple-to-understand screens in order to get the most out of market data.

With UnleashNFTs, bitsCrunch gives people accurate NFT analytics and forensics to help them get a good understanding of the market. The platform gives buyers and sellers in-depth study, analysis, and statistics about the NFT ecosystem, which helps them make better decisions with each NFT trade.

bitsCrunch has also started its startup program as part of its plan to make the NFT community better known and more open about data. Companies that work with NFTs can join this effort to get easy API access to tools from bitsCrunch for analyzing and managing risk. With AI-powered analytics, NFT creators, traders, and companies can spot and avoid bad behavior while making transactions, which will help the NFT ecosystem grow in a healthy way.

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