8 Ways NFTs Can Help Eliminate Forgeries and Fraud

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Forgery and fraud are a constant threat to supply chains and institutions as trust, accuracy, and reliability are paramount. Traceability is one of the key mechanisms that help ensure that products are genuine and have not been altered in any way. NFTs offer a number of advantages in ensuring authenticity, as well as a multitude of potential use cases. Here are six ways NFTs can help eliminate forgeries and fraud.

Track and verify product usage

One of the most effective ways of ensuring authenticity is to tie authenticity to usage. This could be done through the use of blockchain technology and tracking devices. Combined with verified purchase logs, this can tie the digital product to the real-world consumer, giving an assurance that it was indeed used and is not a fake.  It is important to note that this will not work if the product is digital. Nevertheless, consumers might still be willing to sign up to a service that tracks their usage of select physical products.

Enable instant payments

One of the biggest challenges in digital payments is the fact that there are limited options for verification. In particular, payments that need to be verified quickly, such as online gambling, pay-per-use (PPU) app payments, and peer-to-peer payments, can be difficult to verify. However, the use of NFTs could help solve this.  NFTs such as CryptoKitties are used to purchase or trade digital collectibles. These collectibles are unique, due to the fact that they do not have a genetic or DNA link. Each CryptoKitty can be assigned a unique number, determined by the blockchain where they are stored. Collectors can then purchase, sell, or trade these collectibles using any digital wallet that supports ERC-721 tokens.

Reduce fraud in lending

One of the biggest challenges in the lending industry is ensuring that borrowers repay loans. This is made more complicated when there are a large number of lenders, no standardized guidelines, and the potential for fraud. There is a potential to use NFTs in instances of peer-to-peer (P2P) lending. Borrowers can collateralize assets such as NFTs, assets, or real-world assets. This makes it possible for the lender to receive repayment immediately. In addition, the amount that is needed to collateralize is significantly lower than traditional lending products. The use of NFTs in P2P lending could also help reduce fraud.

Prevent bad quality goods from entering supply chains

One of the most effective ways of preventing bad quality goods from entering supply chains is to employ traceability. Using blockchain technology and tracking devices, it is possible to tie the digital product to the real-world consumer. This means that it was indeed used and is not a fake.  One significant advantage of using NFTs in this manner is the fact that it is difficult to alter the product. This makes it possible to trace it back to the consumer and, hence, eliminate bad quality goods from supply chains.

Help manage compliance requirements

Many organizations have compliance requirements that have to do with reporting and auditing. These requirements could be particularly challenging when dealing with products and services. Thus, the use of NFTs could help manage these requirements. This is made possible through the fact that NFTs can be easily linked to the real-world consumer.

Help prevent fraud in payments

One of the biggest challenges in the payments industry is fraud. There is a potential to use NFTs in instances of peer-to-peer (P2P) payment. Borrowers can collateralize assets such as NFTs, assets, or real-world assets. This makes it possible for the lender to receive repayment immediately.

Help prevent fraud in tickets

One of the biggest challenges in the ticketing industry is ensuring that consumers get a fair value for their tickets. This is made more complicated when there are a large number of ticket sellers, no standardized guidelines, and the potential for fraud. OTickets are used to purchase or trade physical tickets. These tickets are unique, due to the fact that they do not have a genetic or DNA link. Each OTicket can be assigned a unique number, determined by the blockchain where they are stored. Collectors can then purchase, sell, or trade these tickets using any digital wallet that supports ERC-721 tokens.

Conclusion

The use of NFTs has the potential to help eliminate forgery and fraud. This is made possible through traceability, instant payments, reduced collateralization, and the ability to track usage. These can be particularly effective when used with digital products, such as digital collectibles. The fact that NFTs are easy to create and use makes it possible for people to buy and sell these products on their own.

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