In the following article I’m going to explain to you why NFTs have a privacy problem and how to solve it – or rather how Navcoin offers a solution to the problem.
What Are NFTs?
NFTs or non-fungible tokens are the newest hype surrounding the cryptocurrency universe. If you are active on Instagram or Twitter you’ll surely have heard of them or seen someone rocking his own NFT as a profile picture. But what exactly are NFTs?
A non-fungible token is a non-interchangeable data unit held on a blockchain. Digital files such as images, films, and music are typical examples of NFT data units. NFTs vary from blockchain cryptocurrencies like Bitcoin in that each token is uniquely identifiable.Â
Imaging a real painting like the Mona Lisa. It is very valuable because of its uniqueness. Sure, another painter could try to create a replica, but it will never be exactly the same as the real Mona Lisa and will be worthless in monetary terms. Compared to the Mona Lisa, a digital asset like a photograph or a digital painting can easily be duplicated. NFTs are meant to represent the ownership of a digital media. This means, while others could still duplicate the image (for example by creating a sreenshot of the image), you have the possibility to proof your ownership of the NFT.
NFTs Have A Privacy Problem
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Let’s take a look at an example:
OpenSea is one of the most well-known NFT market places. One hour ago, someone bought an NFT of one of the most popular NFT collections in existance – the Bored Ape Yacht Club (BAYC).Â
OpenSea shows us, that the BAYC #5343 was bought for 80 ETH (~$250’000.00).Â
By clicking on the time, we get redirected to the transaction page of this buy order.
On the transaction page we can see which wallet bought the NFT by looking at the transaction action:
By following this address and looking at the tokens, we once again see that he owns 1 BAYC
What we also see is, that this person owns other NFTs as well, namely 2 DOODLE (worth $22’000 and $16’000) and 8 PAN.
So as you can see, simply by looking at the OpenSea market and following transactions and wallets, we were able to find the complete collection of NFTs owned by this address!
Why Is This A Problem?
Since people like to “flex” and brag about their NFTs, it will probably be possible to find out who someone is in real life and via social media also where someone lives. Imaging a bad person finds out, that someone who owns an extremely valuable NFT collection lives near the bad person. They could become a target simply because their collection was publicly visible.
How Navcoin Solves This Privacy Problem
 Navcoin is a blockchain that emphasizes the importance of privacy. The developers of Navcoin have recognized this privacy problems of NFTs and created a solution for it: adding the possibility to mint private NFTs on the Navcoin blockchain. By using the self-developed privacy protocol blsCT which is also used for private transactions on the Navcoin blockchain, buying and selling NFTs will hide the transaction details like sender, receiver. The metadata of the NFT will still be public for verifiability purposes, but since the sender and receiver are hidden, investigating someones collection like we did above is not possible with private NFTs.
Conclusion / TL;DR
NFTs have made a big impact on the cryptocurrency ecosystem. Since most NFTs are bought and sold on a public blockchain like Ethereum, this poses a privacy risk for buyers and sellers since their collections are publicly viewable. Navcoin provides a simple solution to this privacy problem by adding the ability to mint private NFTs where the sender and receiver are hidden while still being able to verify the metadata of an NFT.
If you want to learn more about Navcoin, check out their official medium blog.
