Beating NFT fraud using blockchain tech

By Leon Gettler, Talking Business >>

ONE OF THE BIG PROBLEMS now facing NFTs – or non-fungible tokens – is fraud. This is happening world-wide.

NFTs are unique digital assets that represent ownership of the brand. NFTs are virtual records of ownership of either physical assets or digital assets, such as digital artwork, concert tickets, or access to games. The value of NFTs differs based on the unique characteristics of the underlying asset.  

Now a lot of NFTs have drawn large amounts of fraudulent criminal activity. The impact of NFT fraud for individual buyers can be significant, as criminals take an average of $300,000 per fraud event. These fraud instances also cause reputational damage to the NFT industry.

Enter Paiverse, a Dubai-based platform that uses blockchain to ensure the NFTs have a provable provenance and are free of fraud. Now these NFTs seek to be the primary destination for luxury brands to market and for consumers to buy and sell their luxury goods via blockchain technology, in a secure and transparent manner.

“We are quite unique in our solution in that we’re giving an asset-backed NFTs,” Tim Bhatnagar, co-founder of Dubai-based Paiverse told Talking Business.  

“We work directly with the brand-owner. We take possession of the asset, we transfer it into a digital form.

“So now you are trading an NFT but it’s always being backed by something physical. So yes, you can buy and sell and trade it. We insure it, we ship it, but technically you are always connected with the brand and you are trading their asset rather than something I created on my computer.”

Fraud is a major issue

Mr Bhatnagar said fraud has become a huge issue with NFTs.

“To create a company in this environment has been a real challenge,” he said.

“What we are trying to assert it is the individuals understand the brand. What we are doing on our platform is giving a digital title to a physical asset. So you know the brand has released a luxury item, you are trading its digital title and you can redeem your digital title at any given time.”

Paiverse operates in 37 countries but it relocated from the Bahamas to Dubai for regulatory reasons

“We decided to move to Dubai because the regulator here is putting a lot of precedence on getting the right kind of ecosystem developed because so many people have been burnt of late and lost their savings,” Mr Bhatnagar said.

“A lot of regulatory agencies globally have seen this as a negative thing.”

Why the blockchain works

Mr Bhatnagar said one of the key ways Paiverse addresses this problem was through the use of blockchain because it offered full provenance and traceability.

“It’s about due diligence and I think the regulators are starting to catch up and we are trying to help as many regulatory agencies due to our background and to understand how to develop these kinds of regulations,” he said.

“There have been mainstream companies that have been doing this for decades and for generations, like Christies.

“What we are mirroring now is and trying to do exactly the same thing but on blockchain.”

Mr Bhatnagar said blockchain allowed people to do due diligence to ensure there would be no fraud.

“By its very nature, you can go an trace everything,” Mr Bhatnagar said. 

“It’s one of the most remarkable technologies.” 

www.leongettler.com

Hear the complete interview and catch up with other topical business news on Leon Gettler’s Talking Business podcast, released every Friday at www.acast.com/talkingbusiness

https://shows.acast.com/talkingbusiness/episodes/talking-business-26-interview-with-tim-bhatnagar-from-paiver

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