Cryptocurrencies have reached a point where they are taking over financial systems globally and are transforming the digital economy, becoming a necessity for any common investor. That shift towards non-traditional forms of payment has been supported by innovative and unique digital assets, such as nft,to%20be%20sold%20and%20traded.” data-wpel-link=”external” target=”_blank” rel=”nofollow external noopener noreferrer”>Non-fungible tokens (nft).
In their early days, nfts were embraced by a specific target audience, mostly millennials interested in cryptocurrencies and art, and it wasn’t until 2017 that they became a mainstream token for the average investor. The main idea behind nfts was to help creative people make money by trading digital assets such as art, images, GIFs, music, gaming items, collectibles, memes, and virtual fashion.
The first major catalyst that accelerated public interest in nfts was the COVID-19 pandemic, which forced many people to become digitally educated and connect on many platforms such as twitter, and the second major turning point was artist Beeple, who became a pioneer of nfts when he became the first creator to sell an nft with a major auction house. Today, they are finally being recognized as a must-have digital asset, with more investors, financial gurus, and companies such as giants Coca Cola, Taco Bell, and Visa having created nfts and are including them in their cryptocurrency strategies, recognizing their potential to revolutionize digital ownership and investment possibilities. nft-marketplace” data-wpel-link=”external” target=”_blank” rel=”nofollow external noopener noreferrer”>nft Markets Offerings are still being explored and could reach $80 billion by 2025, with great potential for profits in the future. However, this dynamic market, while offering many profit opportunities, has also attracted high-profile scammers.
How to buy nfts and where to find them
To create a defense strategy, you need to know the basic steps involved in the nft purchasing process. To own nfts, you need to choose a digital wallet that supports nfts, such as MetaMask or Trust Wallet. The next step is to purchase some cryptocurrency that supports nfts, usually ethereum, and make sure to choose a trusted cryptocurrency exchange, such as Coinbase or Binance, and then transfer those assets to your wallet.
The next step is to choose your nft provider and you usually have to choose between two types of nft providers. One of them is by using crypto-exchanges/” data-wpel-link=”external” target=”_blank” rel=”nofollow external noopener noreferrer”>Trusted Cryptocurrency ExchangesThese are platforms where you can buy, sell, and exchange cryptocurrencies, and they usually have integrated nft marketplaces. The other option for trading nfts are various nft marketplaces like OpenSea, Rarible where you can create, buy, or sell nfts. Keep in mind that the platform you use must be recognized and certified. The final step is to connect your wallet and make the transaction.
The most popular scams
Trading is always accompanied by potential cyberattacks, and nft marketplaces are not immune to potential fraud. That’s why, in order to protect your finances, it’s essential to know what you’re getting into when buying or selling nfts on cryptocurrency exchanges or nft marketplaces. Listed below are the most common nft scams that should be avoided at all costs.
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Thrown-away carpet scams
This type of scam occurs when promoters create a buzz on social media about a project, which makes new investors eager to invest in this particular project. Once the price goes up, the project is abandoned and the investors’ funds disappear completely. This unexpected exit causes the price of the nft to drop, resulting in huge losses for the investors involved.
How to stay safe: Conduct thorough research on the development team and make sure they are well-known and reputable in the cryptocurrency community. Also, accounts with thousands of followers and zero interactions are likely fake, so keep this in mind. Another tip we recommend is to use disposable wallets to protect your assets.
Phishing scams
Phishing scams They often include fake websites and pop-ups. Hackers send fake links via social media and email to collect information about your private wallet keys. Once they obtain your personal data, your assets are at great risk.
How to stay safe: Always use verified websites for nft transactions, and if you are suspicious about a website's reputation, never share your wallet keys. Also, never share data in pop-ups.
Bidding Scams
This is a common type of scam when investors resell nfts. Once you are part of a sale transaction, make sure to double-check the cryptocurrency used to pay for your nfts. It is not uncommon for buyers to exchange it for a lower-value cryptocurrency right before closing the deal.
How to stay safe: Check again whether sales are made under the predetermined conditions.
Counterfeit nfts
nfts are all about creating unique value, and be aware that scammers can copy an artist's work and sell fakes on nft marketplaces. Once nfts are determined to be fake, their value will drop to zero and you, my friend, will have lost your money.
How to stay safe: Always check that the seller's account has a blue checkmark. Check out their social media platforms to see if it is their own art and is free of plagiarism.
Pumping and discharging schemes
In these scams, a group of scammers increases the demand for nfts by making mass purchases. Following in their footsteps, less experienced investors also increase the demand for these nfts, causing the market price to rise. When the price peaks, the scammers sell their holdings and make a huge amount of profit, causing the price to drop dramatically and leaving other investors with worthless assets.
How to stay safe: Check the transaction history of the nft and verify the creator's contact details.
Customer service spoofing
Another well-known scam is when hackers present themselves as 24/7 customer support staff and contact you to ask about your account and possible issues. To help you, they usually try to obtain your wallet keys.
How to stay safe: Always communicate through official channels and verified social media pages.
Final thoughts
Yes, nfts offer the perfect opportunity to own something unique and of great value, but, like any other digital asset, they are vulnerable to cyberattacks. By learning about potential scams, you are arming yourself with much-needed education on how to stay safe while dealing with nfts.
Being a successful investor requires a lot of research, so be sure to follow our “How to Stay Safe” tips when engaging in buying or selling transactions and keep your money safe.
