The Super Bowl of NFTs, NFT.NYC
Everything You Need to Know -2-
I wrote about the first day of NFT.NYC, the Superbowl of the NFT world, in this article. I can say that the second day was as impressive as the first one. But the second day, panels I attended, were mainly about the technical concerns. Especially the security of blockchain technology and ways to increase it were on the table.
Without further ado, let’s get started to go into details.
Content:
→ Security of NFTs
→ Cross-Chain Technology is Necessary
→ What Are the Layer 1 and Layer 2 blockchains?
→ Brand New NFT Projects
→ DAO Must Be Improved
→ NFT.NYC in a Nutshell
Security of NFTs
Cases like NFT frauds, scam projects, and fake accounts, which have been on our minds for a long time, were discussed at NFT.NYC 2022 in depth.
The measures to prevent the Sky Mavis incident, a $600M hack, were mentioned one by one. I’ll write about these topics at length in future articles, but for now, I’d like to talk about the most common types of scams, which were mentioned also at the event, and what we can do individually to protect ourselves from them.
Most Popular Types of NFT scams
Impersonation
Rug pulls
Pump and dump schemes
Phishing scams
NFT giveaway or NFT airdrop scams
5 Simple Ways to Avoid Most Common NFT Scam
Do a detailed research on the project
Don’t open files from unknown senders
Beware of giveaways
Don’t ever share the seed phrase of your crypto wallet with anyone
Always check for official sites / links
Cross-Chain Technology is Necessary
At NFT.NYC 2022, everyone agreed that cross-chain technology needs attention to improve the blockchain security system and avoid causing NFT frauds. So, what is cross-chain technology?
Briefly, cross-chain is a technology that allows information and value exchange to improve blockchain network interconnections. While doing so, it creates a nested distributed ecosystem by disrupting the siloed nature of blockchains.
Another fundamental concept for cross-chain technology is, of course, interoperability. This word implies the ability of different blockchain networks to exchange and leverage data and move digital asset types between the respective blockchains of networks.
Also, it seems like the enhancements of cross-chain technology will bring a solution for scalability in the long run.
What Are the Layer 1 and Layer 2 blockchains?
One of the other hot topics of NFT.NYC 2022 was the development of Layer 2 and the contribution of this development. Completing the shortcomings of Layer 2 will connect people more to the NFT world. This connection is a key to build loyalty in NFT world which grows non stop. Moreover, integration of cross chain technology to the Layer 2 networks will be revolutionary.
Now before investigating Layer 1 and 2, I should mention blockchain scalability.
Blockchain Scalability
Scaling indicates a growth in the system throughput rate, shaped according to the number of transactions performed each second in blockchain technology. As cryptocurrencies have become widespread in daily life, some concepts have become crucial. These include enhanced network security, record-keeping and so on.
Layer 1 Blockchains
A Layer 1 network refers to a blockchain, whereas a Layer 2 is a third-party integration that can be used in conjunction with a Layer 1 blockchain in the decentralized ecosystem. Bitcoin, Litecoin, and Ethereum are examples of Layer 1 blockchains. Layer 1 scaling solutions leverage the base layer of the blockchain network to increase scalability. Some methodologies are currently developing and implementing, enhancing blockchain networks' scalability.
Layer 2 Blockchains
By abstracting most of the data processing into an auxiliary structure, the base layer blockchain becomes less congested and ultimately more scalable.
Layer 2 is a network or technology that runs on top of an underlying blockchain protocol to increase its scalability and efficiency. These scaling solutions require shifting some of the processing load of a blockchain protocol to an adjacent system structure. Then, they handle the processing load of the network and only reports back to the main blockchain to finalize its results. As a result, the base layer blockchain becomes less cramped and, eventually, more scalable by abstracting most data processing to the auxiliary architecture.
To wrap up, a blockchain has three desirable features: decentralized, secure, and scalable. The blockchain trilemma indicates that simple blockchain architecture makes achieving only two out of three properties possible.
Ethereum has reached the current network capacity of +1 million transactions daily and high demands for those transactions. The demand for Ethereum and its success have led to an increase in gas prices drastically. Following that, the need for scaling solutions also has risen. That’s the point where Layer 2 networks show themselves.
In short, the main aim of implementing scalability solutions is to provide a quicker and safer service for us, the users. As discussed in NFT.NFC 2022, Layer 2 blockchain networks will become more developed and offer better service over time. I think that will be a crucial step towards scalability especially where the user experience development is a must. Even buying & selling an NFT are still complex processes. I think it is a point that needs to be resolved very quickly in such ever-growing sector. Just like you, I’m eagerly awaiting new developments on the subject!
Brand New NFT Projects
What makes me really excited about NFT.NYC 2022 was the launch of giant brands’ -SAP, Coach, and Estée Lauder- NFT projects. Although these projects are not huge, the fact that leading brands are starting to invest in the NFT world shows us that this world has a long way to go. Since the first steps were taken, we’ll see bigger projects very soon.
Seeing the excitement and interest of brand managers was another point that made me happy. It means that NFT is also an attention center for corporate world. Therefore, customers and employees of these brands will be included into this world as well. I’m sure that very soon NFT will cease to be a phenomenon that attracts only a niche audience.
DAO Must Be Improved
Lastly, I attended DAO panels at NFT.NYC 2022. Before giving my impressions on panels, I’d like to mention what DAO is quickly.
A decentralized autonomous organization (DAO) is a newly emerging legal structure. There is no central governing body and in these DAOs each member shares a common goal. At the same time, they try to act in the best interests of the organization. Popularized through cryptocurrency enthusiasts and blockchain technology, DAOs are used to make decisions through a bottom-up governance approach.
My impressions? Firstly, I think that DAO is at the very beginning of the road. There are many aspects that should be improved. As far as I understood from the panelists’ speeches, DAO is not well-understood and adopted yet. However, it has a great potential in NFT world. I’m expecting very valuable DAO applications that complete the shortcomings currently exist. The only thing that I can say is just that time is needed.
NFT.NYC in a Nutshell
To sum up NFT.NYC 2022, it was a perfect marathon that has been created really nicely with a lot of effort. For sure, there were some setbacks such as overcrowding in the event spaces, management of minor crises, and shortages of some panelists. But at the and, the most important aspect of NFT.NYC was that such a big-scale event was all about NFTs and blockchain technology. I’m once more thrilled by the developments, goals and investments about NFT world. I follow this development closely with a great appetite and I’m sure that we’ll be talking about very different things on NFT five years from now.
Just as the internet brought the information age, I believe that blockchain technology will be a new era for us. A brand new age revolution is on its way!
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