Be Vigilant About Scams That Are Associated With NFTs
A non-fungible token (NFT) is a cryptographically unique token that is kept on the blockchain, a platform for distributed ledger technology (DLT). If you’ve been active on social media or have kept up with the news in the past few years, you’ve probably heard of non-fungible tokens (NFTs). NFTs routinely generate headlines and have been sold for millions of dollars, regardless of your opinion on whether they present fantastic prospects for artists and investors or are just a passing fad.
Like cryptocurrencies, NFTs are collectible digital commodities that can comprise anything from artwork to music to films to memes to pictures of tweets. Twitter CEO Jack Dorsey, for instance, sold his very first tweet for $2.9 million. Since NFTs are still a relatively new technology, there is a lot of misunderstanding and disagreement regarding their nature, operation, and acquisition. You will learn everything you need to know about NFTs, the technology that powers them, how to safely store your NFTs, and how to stay up to date using a variety of sources in this thorough book.
Several Types of Scams
Both the public’s view of NFTs and the prevalence of the related scams are rising. Here are six NFT scams to watch out for and stay away from.
In a pump-and-dump NFT scam, fraudsters increase the price of an NFT by misrepresenting and disseminating fake information. Investors are left with worthless assets when they “dump” the NFT when the price rises and disappears. To generate media hype around an NFT, scammers frequently exploit social media and celebrity endorsements. They often make investments in the NFT, driving up the price and making it challenging for investors to ignore. 29 executives of the energy business Enron fabricated an official income statement in order to sell more than a billion dollars’ worth of quickly rising stock before the company went bankrupt in 2001.
A planned social media hype-up of a scam by its proponents in order to inflate the price is known as a “rug pull.” Once they have the investors’ money, they cease supporting the asset, which causes the asset’s value to fall and the investors to lose money. A variation on this topic is when the creators of an NFT make it impossible for tokens to be sold by adding code that blocks it, leaving buyers with an unsellable asset. One of the most notable instances of a crypto rug pull was the collapse of the Turkish cryptocurrency exchange Thodex. One of the biggest crypto rug pulls of 2021 was the $2 Billion theft. Additionally, it is among the biggest CeFi exit scams in history.
Your wallet address and every move are public because NFTs are on the blockchain. This implies that anyone can access your account and send NFTs to your wallet without your permission, much like an airdrop. It’s advisable to avoid interacting with any new NFTs until you’ve confirmed their origin because scammers will routinely send NFTs to your wallet in an effort to persuade you to contact them and give them your personal information. The NFT airdrop MetaGate is free and will end on February 20, 2022. A new wave of blockchain-based games includes MetaGate. It provides users full control over their avatars and compensates them for taking part in the “play to earn” gaming concept, which has dominated the cryptocurrency market in 2021.
Phishing is the typical method used by hackers to get your NFT account information. They typically distribute fake links via email or well-known social media platforms and online forums like Twitter and Discord in order to achieve this. Once you click the link and submit your information, hackers can access your account using keyloggers or spyware. Unsurprisingly, there is an increase in NFT phishing attacks. For instance, con artists stole over $1.7 Million in NFTs from OpenSea, the most well-liked NFT platform, in February 2022. The trading platform OpenSea had asked customers to update their contact information, but con artists copied the email and distributed links to phone websites to NFT owners.
It is crucial to keep in mind that minting a digital file does not grant you ownership of it or the right to create a new piece of intellectual property, both of which are crucial aspects of NFT. To put it simply, this changes a digital file into a form that can be kept on a blockchain. Minting is a technique used by con artists to deceive victims into thinking they are buying a unique NFT. Once they have plagiarized someone else’s work, they open an account on a trading platform and auction off their stolen NFT to the highest bidder. Unfortunately, if people find out the asset you bought is a fake, it might lose value. Artwork may be stolen or copied by con artists, who then sell the work on reputable websites like OpenSea. Due to theft, copying, or fabrication, the NFT is worthless. Before the person realizes it’s a fake, they’ve already bought it.
The riskiest scam, impersonation, comes in many different forms. After posting some tweets that were exact replicas of his own, a Twitter account with that person’s profile picture and a duplicate of his bio amassed 5,000 followers. The only thing separating his account from the fraudulent one was the extra s in the username: NFTs1nsight as opposed to NFT1 insight. That account might have easily been used to deceive someone who hadn’t seen his real account. He doesn’t know how the account was utilized or whether direct messages were sent to potential scam victims, but he can only presume that it was put up with nefarious intent. These scams are growing more prevalent, and some bogus accounts have amassed thousands of followers to give them a more credible appearance.
How to Be Safe
Other digital assets are subject to many of the same safety measures that are used when buying or selling NFTs. Below, we’ve outlined a few strategies for safeguarding your cryptocurrency and NFT holdings.
Cold Storage Hardware Wallet
Your NFTs can be kept offline on a physical device called a cold storage hardware wallet, which is comparable to a USB stick. Absent that physical device, they are unable to access your digital assets or private keys. Thus, the safest method to store NFTs is in hardware wallets. If you want to keep your NFT for a long time or if you have a large collection of high-value NFTs that con artists might be interested in, a cold storage wallet is a great option. Trezor and Ledger hardware wallets are both well-liked. It is crucial that you avoid acquiring a hardware wallet from a third-party reseller or one that has already been used; otherwise, you risk buying a hacked wallet.
Activate your crypto wallet’s security settings
Utilizing a trustworthy crypto wallet will ensure that security procedures are in place to safeguard your money. But these choices aren’t always turned on by default. Some wallets offer phishing protection and two-factor authentication. Take some time to familiarize yourself with the new wallet’s security features. Completely investigate any possible NFT investments. Do your research before making an investment in any NFT. Learn as much as you can about the people who created the NFT collection, their objectives, and their backgrounds. Analyze the transactional history of the NFT developers as well. There are a lot of prominent NFT designers. Be cautious when making purchases from new artists or traders that have little to no social standing or experience.
Software that protects your devices
It is impossible to stress the importance of using reliable cybersecurity software. It is simple to come across malware, spyware, and other harmful software while exploring the internet. It is crucial to always protect your personal information as a result.
The following are important cybersecurity tips:
- To shield your devices from viruses, install reliable antivirus software.
- Utilize a VPN to encrypt your data and increase your online security. We suggest the premium VPN provider NordVPN.
- Consider utilizing a password manager and always use strong passwords.
Ensure the URLs are correct
Phishing links are among the most popular ways for people to be hacked. Someone will provide you a link to a bogus website that looks authentic, like a well-known brand or marketplace website. After that, the user will connect their wallet to the website automatically. The game is over at that point. Once the link is created, all of your NFTs can be lost. The URL of any website you visit must be verified twice for this reason, and you must never click on any unrelated links that have been supplied to you. Scammers have gone as far as to pay for Google Adwords to guarantee that their fake website shows up on the top of Google search results.
Keep up with the latest trends
It might be difficult to keep up with the most recent security norms and trends in the cryptocurrency world of today.
Remember that a lot of cryptocurrency websites offer a tonne of fantastic content, and some are focused on new users by providing information on safety and security. As always, I advise you to conduct your own research and always be cautious. Try to heed the counsel of any experts, but always make your own investment decisions. Use caution and thorough due diligence when considering potential investments to protect your NFTs. It will take a lifetime of deliberate effort to complete this process; it is not quick.
NFTs are a ground-breaking, popular subject in the cryptocurrency realm. It pays to be watchful, to know what to look out for, and to educate yourself on the most recent trends and frauds if you want to keep your digital assets secure. Never send digital assets from a public exchange, and before sending money, always do some research to find out more about possible NFT investments. By using cold storage, cybersecurity software, appropriate research, and awareness of changing trends, you can keep your hard-earned digital assets secure. By not taking precautions, you run the risk of falling for the newest trends and scams.
To keep your NFTs safe and secure, you must be informed and knowledgeable. This article offers guidance on how to stay secure when using cryptocurrency NFTs, stay current with web trends, and spot frauds when they appear. Keep up to speed with the NFT news website for further information about fraud, scams, and hacks. It gives the crypto community weekly updates on the most recent scams and information to aid in preventing dangers. Maintain your security and your knowledge.