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Blockchain Based NFT Marketplace

Deepak Naik1, Tushar Bhosale2, Vikas Dane 3, Dhaval Chotliya 4, Harsh Yallatikar5
1
Assistant Professor, Department of Computer science and Engineering,
2,3,4,5
Students, Department of Computer science and Engineering
1,2,3,4,5
Nutan College of Engineering and Research, Talegaon Dabhade, Pune-410506, India

Abstract. NFTs are rights that can be transferred to digital assets like pictures, films, or music. Since the
beginning of 2019, the phenomena and its markets have expanded dramatically. Since a few years ago, there
have been an increasing number of NFT marketplaces. For the storage of digital assets or files, most of them
use "centralized systems". In this paper, we suggest a safe exchange for exchanging NFTs, which are digital
assets. Users will be able to upload fresh digital assets and swap them for cryptocurrencies based on
Ethereum. Additionally, we want to investigate if a decentralized file system is technically feasible. By doing
this, we want to solve the problem of gas costs and file storage while keeping it affordable. Also, this project
is an attempt to advocate the use of blockchain technology

Key words: SVM, RGB, Grey Level Co-occurrence Matrix.

1. Introduction
The ownership rights to digital items, such as pictures, videos, and music, are transferrable. The
phenomenon and its marketplaces have grown dramatically since the beginning of 2019. NFT marketplaces are
becoming more prevalent since a few years ago. Most of them store files or digital assets using "centralized
systems." In this initiative, we offer a secure trading environment for NFTs, or virtual money. Users will be able
to upload fresh digital assets and exchange them for Ethereum-based cryptocurrency. We also want to look at
the technical viability of a decentralized file system. By doing this, we want to discover a remedy for the issue
of gas prices and file storage and make it more manageable. Additionally, this initiative aims to promote the
usage of blockchain technology.

2. Literature Survey
A blockchain-based reputation solution for the NFT ecosystem was put out in this paper. Smart
contracts were created by them to automate incentives, prizes, and registration. Their construction is
thoughtfully planned to counteract known NFT assaults and eliminate the behaviors of unauthorized users. With
time, a user's reputation grows as their visibility and rights within the NFTM rise along with their reputation.
The ultimate reputation score in our reputation system is determined by weighted parameters. All relevant
elements have undergone extensive examination to guarantee that they defend against both unjust ratings and
assaults. The on-chain origin data, which comprises all submitted assessments as well as calculated reputation
ratings, ensures reliability and openness. Additionally, our solution offers sequence diagrams that show
implementation specifics, validated algorithms, and reputation calculation information.
Non-Fungible Token (NFT) [2] is an emerging technology that is dominating the blockchain industry
in this study. In this study, they look at cutting-edge Nutrient film technique technologies that might
revolutionise the market for virtual and digital assets in the future. They supply the design models and
characteristics initially, after which they analyse the technical components. They next analyse the security of
current NFT systems before delving more into the possibilities and potential applications for the NFT concept.
Finally, they outline the issues in current research which must be addressed before mass-market adoption. We
hope that this report provides a timely analysis and description of the initiatives and solutions that have already
been suggested, making it simpler for newcomers to follow the current developments.
This document [3] In the blockchain network, NFTs are a brand-new digital asset. Users will eventually
be able to discover a more wholesome and secure trading experience on digital assets thanks to its utility
features and markets, although this is still in the works. NFTs could eventually have some physical analogues
(as utility NFTs). From the chosen NFT trading venues, this research identifies various trends and tendencies.
According to data gathering and analysis, there are many more secondary sales than primary sales. In other
words, rather of making long-term investments, the art NFTs are still buying and selling assets to meet short-
term goals. Crypto Punks had a distinctive trend across our chosen NFT marketplaces: I a large decrease in
transactions; greater average sales volume (ii). Only Crypto Punks' market has four PCA principal components,
which account for 95% of the volatility. Other markets, on the other hand, have two or three PCs with a
comparable amount of variance explanation. Their study offers insightful assessments and information about the
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NFTs' craft as well as the markets for unstable yet fast convergent NFTs.

According to this study [4], NFTs are made transparent, traceable, and safe by being built on
Ethereum's blockchain technology. A previously unproven use case, like as exclusive ownership of digital
assets, was made possible by the new feature of unique tokens. Since each asset's ownership can be tracked, its
legitimacy is increased. The idea of being the sole owner of a genuine, paid-for digital commodity, such as
images, gifs, videos, music, and so on, attracted the curiosity of art lovers and connoisseurs, causing the market
to skyrocket. NFTs may be used to trade physical works of art in addition to only digital ones, making them
interchangeable with their digital equivalents. NFTs are not limited to digital assets. NFTs can be bought and
traded on several platforms, including ones that contain natural media. Its usage has also expanded to many
other industries, including education, where NFTs are utilized for certification and licensing, fashion, where
each product is recognized by its NFT, and athletics, where a brand-new technique of earning money via
basketball cards is devised. However, several difficulties prohibit NFTs from being employed more broadly.
These issues include the lack of sector security standards for contracts, the lack of certainty encompassing
intellectual property rights fraud risks associated with painter impersonation, transparency that compromises
consumer safety and privacy, and severe environmental consequences due to high energy consumption . There
are practical answers to many of these problems, such as the adoption of zero-knowledge proofs (ZKP) for
increased privacy and non-browser wallets for increased security of the cryptocurrency holdings, as well as the
transition of blockchain development to greener platforms like Solar Coin and Bit Green. Instead of utilizing the
great potential for NFTs, a tech whose market is rapidly developing, the challenges remain and have not been
fully addressed by such solutions, that have yet to gain momentum in the larger blockchain community.
The paper's [5] A recent innovation in the blockchain industry is called Non-Fungible Token (NFT).
They examined cutting-edge NFT technologies in this paper that may in the future change the way the market
for digital and virtual assets is structured. The technical components are firstly analyzed, and after that, design
models and properties are provided. Following that, it is required to assess the safety of the existing NFT
systems and examine the possibilities and potential applications for the NFT concept. Finally, they highlight the
challenges that modern research has that must be overcome before it can be broadly adopted. The purpose of
this report would be to make it easier for newcomers to stay current by giving timely evaluations and
explanations of previously presented projects and solutions.
This study [6] offers scholars and professionals a sound foundation on which to comprehend and
further explore the subject of NFTs. Following an example description of those 14 initiatives, unit roots were
sought in daily transaction time series, NFT volume (with USD), and Nutrient film technique wallet (a proxy for
users). We discovered cointegration for all three metrics after evaluating the stationary series for it. Causality
relationship and IRFs even as estimate results. There are strong short-run links between the projects in addition
to the long-run correlations that we discovered several Granger causalities for. We utilize IRFs to illustrate the
connections between chosen initiatives over the short and long terms. Other NFT submarkets dominate the
majority of NFT submarkets. In conclusion, this study offers a thorough analysis of the growth of the NFT
business on the Ethereum blockchain. The emphasis is on specific noteworthy initiatives, with "important"
being defined as a total trading volume for each project's NFTs of at least $10 million. NFT ventures.
Additionally, past efforts influence newer projects (both positive and negative). The findings imply that
although the market is its infancy, it is growing quickly.
NFTs are made transparent safe. Since they are based on Bitcoin and Ethereum blockchain technology
[7]. The added functionality of unique tokens enabled use scenarios that had never previously been validated,
including exclusive possession of digital assets. The idea of owning an original, paid-for digital content, such as
images, gifs, videos, music, and so on, grabbed the attention of art collectors and fans, resulting in a rapid
development of the market. NFTs aren't just for digital assets; it can also be used to exchange physical creative
products in the same manner that they do digital ones. The acquisition and sale of Neuro-fibrillary tangles,
which comprise several media types, is supported by numerous platforms. Total possession of an authentic,
purchased digital content, such as images, gifs, videos, music, etc., caught the curiosity of art lovers and
connoisseurs, causing the market to growth situation. NFTs are not just restricted to digital assets; they may also
be used to trade physical creative creations in the same way that they interchange digital ones. NFTs' use has
also spread to numerous other industries, including education, where people are used to differentiate between
different and accreditations, fashion, at which they are employed to identify article, sports, in which a brand-
new technique of generating revenue basketball cards has been developed, and others.

This [8] emphasizes that while technology can be a potent instrument for fostering individual liberties
and autonomy, it cannot, by itself, serve as the foundation for a society that is both free and decentralized.
Blockchain technology's decentralized infrastructure may provide options for individuals to organize and
coordinate freely more openly and less hierarchal structure. The Internet has demonstrated that standards are
social (De Nardis, 2009), adding that they can either protect or abuse our privacy. Similarly, depending upon
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their technological design and reward systems, blockchains may either free individuals from the tyranny of
corporations and governments or subject them to a new collection. A decentralized infrastructure, however, does
not always imply a decentralized governing system. While implementing a distributed management system atop
of a centralized infrastructure is difficult since the party managing the infrastructure simultaneously controls the
system, A decentralized infrastructure, on the other hand, is typically substantially weaker than a centralized
one. The system can be more readily manipulated by outside influences because there isn't a single entity in
charge of overseeing and defending it. The social and political ramifications of blockchain technology,
including disintermediation and decentralized collaboration, are still unclear. It is particularly unclear whether
technological decentralization will result in a more democratic and decentralized society where people can
freely organize themselves in an open and decentralized manner without being subject to the control of
governments and corporations or whether it will instead result in a more authoritarian system., in which the
majority of with us decisions Untrustworthy technology systems controlled by a limited number of strong
people have an impact on social relationships and economic transactions. Another comparison to the Internet
may be fruitful. When strong commercial interests entered the picture, the Internet—which was once seen to
support individual freedom and autonomy grown into a highly dense network managed by governments. The
development of blockchain-based apps may go a similar course if left to its own devices.

3. What is blockchain?
In Blockchain technology data is saved in blockchain databases in the form of blocks that are linked
together. The data stays temporally consistent because to the impossibility to remove or change the chains
without network consensus. The system's built-in capabilities, which also prevent illegal transaction
submissions, help to provide a consistent image of these transactions. A business network may track assets and
record transactions using blockchain since it is an immutable ledger. A property might be tangible (like a home,
automobile, sum of money, or piece of land) or intangible (like patents, copyrights, and branding). A blockchain
network enables the tracking and trade of almost any asset, minimizing risk and enhancing efficiency for all
parties.

TYPES OF BLOCKCHAIN

PUBLIC BLOCKCHAIN
• It's a permissionless blockchain platform in which everyone may participate and transact. It's a
non-restrictive ledger variation in which each peer does have a copy. This also suggests that anyone with an
internet access may view the open Blockchain.
• These complex computations must be performed to verify transactions & add them to a ledger.
• This individual can execute mining operations and has accessibility to both historical and
present-day records. On the blockchain network, no legitimate document or transaction may be modified.
Because the code is frequently available for public scrutiny, anybody may review the transactions, discover
problems, and suggest remedies.

Figure 1: Public Blockchain

PRIVATE BLOCKCHAIN

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• A blockchain functions is a private environment, such as a private environment, or is managed

by just one person.
• Despite being considerably smaller than an available to the public blockchain network, this
Blockchain has a peer-to-peer connectivity and is decentralised.
• Rather than being open to anybody who wants to volunteer computer power, they are usually
run on a restricted network within a corporation or organisation.

Figure 2: Private Blockchain

HYBRID BLOCKCHAIN
• Hybrid blockchains, which incorporate the advantages of both personal and public
blockchains, are used by businesses who want the best of both.
• Exchanges on a hybrid blockchain are normally not publicly disclosed, but may be confirmed
by allowing access. It enables organisations to create a private authorization system.

Figure 3: Hybrid Blockchain

BLOCKCHAIN CONSENSUS MECHANISMS: TYPES

• PROOF OF WORK
• PROOF OF INTEREST
• DELEGATED PROOF OF INTEREST
• PROOF OF CAPACITY
• EVIDENCE OF ELAPSED TIME
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• EVIDENCE OF IDENTITY,
• PROOF OF AUTHORITY,
• EVIDENCE OF ACTIVITY

PROOF OF AUTHORITY
The identities of the network's validators are at risk in the Proof of Authorities technique, which is a
modified form of Proof of Stake. In this case, the identity is determined by how the validators' identification and
their formal identification documents match up. The credibility of these validators depends on the network. Only
validators on Proof of Authority nodes are allowed to produce new blocks. Validators who identities are all at
risk are motivated to safeguard and secure the blockchain network.

4. Algorithm Selection
Describe IPFS
A distributed system called IPFS is used to store and access files, webpages, programmers, and data.
By using its contents rather than its location, IPFS can locate that lovely, sweet aardvark information (more on
that, which is called content addressing, below). The string of integers in the center of the URL is the IPFS
representation of the information about aardvarks. As a result, rather of requesting the page from one of
Wikipedia's computers, your computer utilizes IPFS to request the page from several machines all over the
world. It can obtain information about aardvarks from any source, not just Wikipedia. Additionally, while using
IPFS, you don't only obtain data from other people; your machine also contributes to their distribution. When
your neighbor or anybody else using IPFS needs so same Wikipedia article, they could be just as likely to obtain
it from you as from them. IPFS makes this possible not simply for web pages, but for any other form persistent
file which a computer may maintain, such as papers, emails, or even database entries.
The Interplanetary File (IPFS) is a distributed storage system that allows computers across the world to
store and provide data as part of a huge peer-to-peer network. Any system may install the IPFS programmed and
start storing and serving data from all over the world. Anyone who has IPFS installed on their machine and
publishes any file to the IPFS system can read or download that file.
IPFS, in its most basic form, is a crypto table that connects CIDs with users who have the access to the
data to which the CID refers. Since no one node on the network can have the entire lookup table, it is
distributed. Instead, each node stores a component of the data store as well as information about which nodes
are storing other relevant sections. Since several users can submit the same material at once, downloads will be
distributed among them all, IPFS has speed and reliability.

5. Diagrams

Figure 4: Data Flow Diagram (DFD-0)

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Figure 5: Architecture Diagram

6. Applications
The Play-to-Earn (P2E) gaming paradigm:
Since they do not allow for duplicable in-came assets, digital collectibles are arguably the most
common application for non-fineable tokens. Players can acquire items of inherent worth as they advance
staves, which they can subsequently trade or sell. Unique in-game objects could be more valuable with time,
allowing users to benefit. Players continue to posse ss NFT even after they stop participating in the game, and
they could someday be any think.

Making it possible for digital art to truly be owned:

Since the former was simple to duplicate, spread, and swindle, digital and art have always remained
separate. For instance, it is very hard to stop the theft of digital material or artwork in media forms. Digital art
could never be as even a simple by a budding artist. This model is reversed by NFTs. Graphic designers, digital
artists, and photographers from all around the world may create an NFT that can be purchased and sold. All
transaction histories are stored on the blockchain.

Membership verification using "digital tickets”:

NFTs can also be utilized as electronic tickets to demonstrate membership in a pay- to-play computer
names, an online forum, or another digital forum. Users do not have access to the same convenience of identity
verification on the internet as they have in the real world. Proving membership is a bid commercial challenge as
demand for online venues like me platforms rises. One can show an NFT as membership evidence or even
transform their avatars into NFTs to show the legitimacy of their online persona.

Eliminating frauds inside the music business:

Increasing numbers of cases of fraud and theft have been reported as digital media continues to
dominate the music business. Additionally, because most of the income are claimed by record companies, music
retailers, ticket distributors, etc., it might be difficult for young musicians to make a profit in their early years. In
contrast, — anti tokens let artists to sell digital music files directly to their audience. The rights of the artist can
be protected since NFTs can be designed to limit income sharing to a certain amount and no more.

Buying virtual property in the metaverse:

Widespread real estate is in great demand on well-known metaverse sites like Decentral and The
Sandbox. Decentralized applications, often known as d-apps, offices that people, and businesses may set up in
the metaverse to generate fresh. These plots can he bought and sold by investors for a profit, or they can be
leased to metaverse developers. Since these plots can be worth millions of dollars, proving ownership. Digital
estate rights may be managed securely and impenetrably using NFTs.

7. Future Scope
Nonfungible.com reports that in the first week Aug, a total of $close to 1 million in USD was
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exchanged across seven of the top NFT markets. The graphs below show that NFT sales exploded the first week
of Aug and that the pattern persisted. Nonfungible. According to the research, the market valuation might reach
$315 in 2020 and $700 million in 2021. leading developments in the NFT industry Moving to low gas-fees
Layer 2 protocols.
• Cross-chain NFT marketplace development.
• Token airdrops
• NFT get on the yield farming bandwagon.
• In the gaming industry • Entry of mainstream gamers.
• Investors in venture capital who fund NFT markets.

8. Conclusion
We study the technical components first before giving design models and features. Following that, we
assess the security of current NFT systems and talk about the possibilities for future NFT applications. The
issues listed below are those we're attempting to solve:
• Lowering rising petrol prices
• Securing metadata with the IPFS database
Finally, we outline the current scientific challenges that must be solved before general commercial
acceptance. We believe that this paper will assist newcomers in staying current by offering timely evaluations
and descriptions of existing projects and solutions.

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