Non-fungible tokens (NFTs) are one of the most exciting use cases for blockchain technology, especially in the gaming space. The ability to transfer unique digital objects from one place to another has made games more dynamic and immersive than ever before, but as highlighted at conferences such as the Internet 2.0 Conference, there are scammers lurking in the shadows ready to take advantage of those who don’t know better. This article will examine some of the common types of NFT scams and how you can avoid falling victim to them.
Operators of NFT markets must work toward putting policies in place that would stop unscrupulous actors from pulling off fraudulent frauds or siphoning illegal assets. Top developing trends and preventative measures that supporters of NFT marketplaces need to be aware of.
Common NFT Scams
Due to the lack of regulation and newness of NFTs, scammers are launching a flurry of both established and novel methods to defraud NFT investors of their money. Some of the more notable ones are listed here by experts at the Internet 2.0 Conference:
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Utilizing stolen credit cards to launder money
When thieves obtain payment credentials, they need a mechanism to convert the stolen information into money. Purchasing stuff they can resell, such as electronics or upscale goods, is one way to do this. However, high-value NFTs may be better because they don’t require special arrangements to pick up or resell a physical object.
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Pulling the rug
This outlines a scheme where scammers shill for a major NFT release, maybe by claiming affiliation with a project that has already succeeded or offering prizes and access to upcoming content to customers. After the NFTs are sold, the sellers disappear and delete their online presence from social media, leaving the buyers with nothing but the NFTs’ devalued original value.
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The Pump and Dump
The goal of a pump-and-dump plan is to deceive investors into paying even higher prices for NFTs that seem to be in strong demand by artificially inflating the value of the sellers’ NFTs through their purchases.
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Stolen and copied artwork
Making NFTs from existing, copyrighted works of art that belong to other people is one of the most accessible and widespread low-effort scams in the NFT market. Targets include both well-known artists and lesser-known digital artists with specialized fan bases. When stolen NFTs are reported, NFT markets don’t remove them from their listings.
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Malware and bad links
You recently bought your first NFT, and you can’t wait to proudly display it on your mantle in a digital frame. When you click the link provided by the vendor to download a high-resolution copy of the photograph, nothing happens, or, worse yet, it directs you to a website that infects your computer with malware immediately.
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Phishing
Phishing is one of the frauds employing NFTs that is most frequently observed. Despite blockchain technology’s alleged security and incorruptibility, most defenses can be overcome by tricking an individual user into disclosing their password and any other credentials that safeguard their cryptocurrency wallet. The victim can do nothing to stop the fraudster from moving NFTs and crypto-coins to their wallets if they can acquire access.
How To Verify An NFT
Many contend that blockchain technology makes it simple to confirm the legitimacy of an NFT. NFTs are forged in the case of sleeping, though.
Viewing blocks, transactions, fees, mining activity, and other information is possible with a blockchain explorer, also known as a block explorer. With this plethora of data, you may check the validity of an NFT by looking at its history and trading activity.
Ways To Prevent NFT Scams
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Never open files or URLs that seem dubious.
Never open attachments or links associated with your NFTs from people you don’t know or aren’t sure about. Phishing emails are a popular tool used by cybercriminals to trick people into giving over their digital wallet details.
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Make reliable passwords
Making specific, secure passwords for your cryptocurrency wallet and other NFT accounts would be best. You should always think about certifying your passwords.
A text becomes certified when it substitutes unusual numbers or symbols for the traditional alphabetic letters. Passwords that have been certified are more challenging to guess or break. Certification can assist in defending you against NFT scams that use weak passwords to attempt to steal digital assets.
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Make two-factor authentication available.
Scammers won’t be able to access your collectibles online if you use two-factor authentication on all of your NFT accounts. It isn’t easy to reproduce your identity using apps like Google Authenticator or biometric information from your smartphones, such as fingerprint and facial recognition.
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Never divulge your seed phrase or recovery.
As opined by experts at events such as the Internet 2.0 Conference, people should never divulge their seed or recovery phrases to anyone, just as conventional passwords. Doing this puts your wallet’s NFTs, cryptocurrencies, and other crypto assets at risk.
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Constantly compare the NFT’s price.
Check the price of an NFT on a recognized trading site before making a purchase. If the price is significantly less than what is published on an official trading website, you should instantly doubt its genuine worth.
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Verify NFT seller accounts.
Always check the legitimacy of the NFT seller’s account before making a purchase. Examine their social media and discord pages and look for the blue checkmark that certifies their identity.
Final Thoughts
Now that you are aware of some typical NFT scams, you should be able to defend yourself. Using caution is crucial when starting in the NFT industry. Never reveal your private keys or seed phrases, and stay away from untrusted NFT marketplaces and shady websites.
In the NFT space, many fundamental cybersecurity measures are applicable. That is why speakers at tech conferences in 2022 suggest that you’re keeping an eye out for cyber risks. Your NFTs and other digital assets should be secure if you use caution and safeguard yourself with the greatest cybersecurity software.