What are NFTs and KYCs?
NFTs
NFTs are digital assets that allow the users to check the authenticity of art, documents and transactions. NFTs provide a unique identifier which cannot be exchanged, altered or deleted and are stored on a blockchain network.
KYCs
KYC is a service used by financial organizations and governments that need to better understand the user of specific products or services. It allows them to develop a profile of the user with whom they are dealing and to make informed decisions. One example of this is when banks have specific details about customers they may enable different platform functions etc.
How do NFTs and KYC combine?
NFTs are highly decentralized assets whose value is determined both by their creators and by the highly volatile, unpredictable market. The platforms that facilitate their trade and ultimately provide access to those markets need to comply with the regulations they are subject to if they want to operate legally. The way that NFTs are traded was quickly identified as a potential hub of money laundering activity. For example, someone can effectively purchase an NFT for a large amount of money, then sell it to a third account for a lesser amount to effectively reduce their tax liability. This is just one of the ways that the area could be exploited for money laundering purposes. KYC technology can allow NFT marketplaces to collect KYC information on users that send or receive payments in NFT transactions in a simple, end-to-end solution that adapts to evolving, diverse and complex financial regulations around the world. This can offer a robust, cost-effective and secure solution for NFT marketplaces, while mitigating the risk of criminal exploitation.
How can this benefit you?
One of the main benefits of the KYC service is that you can have all important and verifiable information in one place – which is totally secure, nobody can steal, damage or delete it. This is useful when you want to get bank credit or apply for a service where the organization will use KYC to check your profile and detailed financial information.
On the other hand, if you are a bank representative, you can easily complete your job by checking the KYC information on the blockchain and make faster decisions on customer requests. You will also be able to process more inquiries than having to collect all the information piecemeal. And the biggest plus is that it will be already checked and verified so you can trust it.
Self-sovereign Identity (SSI) and the Metaverse
Even though we face an increase in identity verification in the modern world, a lot of it is still analogue and centralized, meaning your identity is dependent on your data existing on a specific server address location, controlled mostly by government organizations. Digital identity on the other hand can attest the authenticity of anything stored on the blockchain. This can easily be applied to inanimate objects, digital assets and anything else minted as an NFT.
Self-sovereign identities (SSI) are self-managed digital identities that are generated and controlled via decentralized technology in the face of blockchain. Using SSI integrated software can substitute the identity verification process entirely, and in doing so, ensure no personal information is stored on the blockchain. Exploring the development of such software will shape the future of PFP projects and verification identity in metaverses, and ultimately The Metaverse. Once adopted, we believe this technology will serve as a KYC and much more to both government institutions and private companies, eliminating the need to send personal information such as copies of IDs and passports.
Frequently Asked Questions
Below we have provided some definitions and clarifications of some of the most asked questions.
What are the three 3 components of KYC?
KYC involves the checking and verification of face, ID card or other documents such as addresses or bills. It is an obligatory process for banks and other financial and related organizations to prove the customer is who they say they are.
Why banks do KYC?
The KYC process is used to prevent loaning money to criminal and terrorist organizations who might be attempting to use them nefariously. It also provides evidence that a potential customer will be able to cover the expenses and the banks will not lose out.
Why you should do KYC?
The KYC process is an obligatory part of some applications, and you need to cover the minimum requirements to be approved. It is also done as verification that the money will not be used for illegal activities.
Our Team
We are NFTKYC.com - professionals and enthusiasts with many years of experience in the blockchain, crypto and NFT world. We are familiar with the hype around the NFTs, that’s why we know how important it is that KYC technology be implemented as soon as possible!
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