How to Avoid Being a Victim of NFT Scams

Most common NFT scams

The most common NFT scams are phishing, counterfeit NFTs and pump-and-dumps.

The year 2021 marked a watershed moment for nonfungible tokens (NFTs). However, there are hazards involved when something becomes popular, such as decentralized finance (DeFi) and the newest version of the Web, Web3.

You don't have to tell hackers twice to follow the money. Last year, hackers made $14 billion from cryptocurrency-related thefts, and cryptocurrency crime has increased by 79 percent this year – and the danger is not finished yet. But how can NFT traders avoid becoming victims of fraud? To begin, educate yourself. You can keep your tokens safe by recognizing the most typical NFT frauds.

The most crucial point to remember is that NFT pump-and-dump schemes are ineffective. Scammers will inflate the floor price (representation of the lowest price for an item, updated in real-time) of an NFT of your choice using false information. They sell their things and leave others empty-handed when their efforts are successful. The technical support fraud is also a typical ruse. If you use Telegram or Discord, you've undoubtedly seen crypto scams right in front of your eyes.

This phishing fraud is not at all obvious. Scammers employ false pop-ups to link to pages that appear to be normal, such as your wallet. Or first-time purchasers are having trouble closing the deal and accept an offer of assistance for investing in NFTs. The fraudster asks for your personal information, which he then utilizes to take all of your assets.

In the domain of intellectual property, the third most popular NFT scam is nothing new. Artists put a lot of effort into their unique designs. It takes a lot of time to build up an NFT collection, so when someone else copies it, it's like biting into a sour apple. The con artists take the artist's work and transform it into a non-functional toy. Buyers will think they're bidding on an original piece of art and will submit high-value bids.

Are NFTs a scam?

NFTs are not a scam. On the contrary, they are a big booming business.

NFTs can be collectors' items, similar to baseball cards, but they don't have to be. An NFT might potentially be a digital form of entertainment, or even a valued piece of art for a brief period of time. Many people believe the market is in a bubble that will eventually burst, and they are correct. However, now is not the time to speculate because business is still thriving.

NFTs are relatively vulnerable because security and compliance are hard subjects. Furthermore, crypto, blockchain, and NFTs are the new kids on the block, with the rest of the neighborhood having little knowledge of them. And there are additional risks associated with the unknown. A phishing assault targeted customers of the largest NFT marketplace (OpenSea) at the start of this year. At least 32 people had their NFTs stolen, totaling 1.7 million dollars.

Although NFTs are not a fraud, they are often easy to steal, and as the NFT market grows, so will the amount of attacks. Hackers will also become more inventive and technologically knowledgeable. Hackers robbed users from Nifty Gateway a year ago, therefore there's more NFT news concerning frauds. They bought a lot of NFTs and even used credit cards from customers who didn't enable two-factor authentication (2FA) to buy up to $10,000 worth of NFTs per account.

How can you avoid NFT scams?

To avoid NFT scams, it would be wise to keep an eye on the news coverage. Also, optimize your digital security and do not fall for shady contact requests and weird pop-ups.

Users are becoming more aware of the dangers of trading and how to keep their NFTs safe. However, if you already own an NFT or plan to purchase one or more, it's critical to understand how to avoid an NFT scam. You can take many cautious precautions as a user to protect your valuables from theft.

First and foremost, you must understand what you are doing. Review the transaction history of the NFT you wish to acquire to avoid pump-and-dump schemes. Also, dig for the creator's contact information and conduct research on them. If all of the transactions were completed on the same day, a light should turn on.

While we're on the subject of phishing schemes, remember that your personal information is yours! Never hand over your wallet keys, and ignore any unsolicited offers or contact requests. It goes without saying that you should always use 2FA to protect your accounts; it's the least you can do.

There are occasions when you can't do anything about stolen artwork. Of course, the creator's accounts, social media postings, and community may all be verified. Do your homework, like you would in any other situation. New technologies are being developed by several NFT marketplaces to scan public blockchains for fraudulent NFTs. Finally, NFT scammers' usernames do not include the blue checkmark.

Are NFTs worth it?

NFTs are suitable as an investment. If you count your steps and take your safety measures, it’s a whole new world to explore.

We're in the midst of the NFT roller coaster, but many people are still debating the merits of NFT investments vs NFT frauds. The success of nonfungible tokens is self-evident, with a total market value of $40 billion. Many people believe that NFTs are nothing more than pricey PNG files, however the opposite is also true.

Yes, some NFTs are rip-offs, and some platforms aren't as trustworthy as you might think. However, this does not imply that all NFTs are fraudulent. You'll meet some shady salespeople when you go automobile shopping – it's a risk that comes with life. When you're ready to purchase an NFT, keep in mind that the value isn't in the image itself. The underlying asset has value, which provides NFTs their practical usefulness.

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