Living in 2022, it may come as a surprise for some to hear that we are pioneers and explorers, in very much the same way as Marco Polo. The main difference between Marco Polo and us is that we never have to leave our houses to do the exploring.
As technology expands into the uncharted waters of NFTs, Cryptocurrencies, Web3, and more, we need to be on the lookout for pirates…and not the Captain Jack Sparrow kind. We’re talking about the scammers, hackers, and fraudsters who wait in the shadows to trick precious treasure out of our crypto wallets.
One of the spaces that have been targeted as of late is the NFT space. Keep reading for your simple guide to avoiding NFT scams.
Why NFT scams exist
There’s a common misconception that NFTs are just digital works of art like paintings. This couldn’t be further from the truth. NFTs range from digital fine art to GIFs, video clips, gaming skins, and entire virtual spaces like multi-million dollar houses.
When you consider that owning a non-fungible (non-replicable) piece of art can grant you access to exclusive digital clubs, Discord chat rooms, and exclusive gaming communities, coupled with the increasing value of your investment, the real question becomes, why wouldn’t scammers target NFTs?
They could either be selling you near replicas of NFTs from famous artists or could be sitting behind the curtain of code to gain access to your digital wallet and swipe you dry.
Check behind the scenes
When you are in the market for an NFT, the very first thing that you should do before purchasing is check out the developers behind the project that you are investing in. Look at their social media followers versus average engagement.
They might be buying followers but it’s very hard to fake engagement.
For larger investments, ask yourself: Is this developer new to the space, or do they have a well-reviewed arsenal? Review their portfolio carefully, and only pull the trigger on an investment if you don’t see any red flags.
Being ‘type-A’ about the developers behind an NFT might sound tedious, but doing your homework could help you avoid being sucked into a rug-pull scam or a phishing scam.
One great resource is EtherScan. This allows you to see all incoming and outgoing transactions that happen on the Ethereum blockchain and verify the credibility of the NFT that you are thinking about buying.
Use digital hygiene
We all know not to click a random email link from an unknown sender because most people reading this article have experienced phishing scams or know people who have.
We hate to break it to you but, phishing exists in the NFT world, and NFT phishing scams are rife. These gremlin hackers have devised an effective formula inspired by hackers of yore. Their methods aren’t quite as direct as email phishing, but it still gets them to their intended result.
They shoot out attractive (but fraudulent) NFT ads, ask for your security seed phrases, then hack into your crypto wallet and loot your whole stock of coins and NFTs.
Avoiding these scams is quite simple: don’t click on random NFT ads, and absolutely NEVER give out your wallet’s security seeds to websites that you aren’t familiar with or trust.
Do your research before buying or selling
Have you ever heard of catfishing before? No, we’re not talking about people who abuse filters and face-tuning, we’re talking about NFT catfishers. These catfish will use fake celebrity and influencer profiles to promote and amplify their virtually worthless NFTs.
This promotion eventually leads to a rug-pull scam where you purchase an NFT for a lot of coin, and they run with your money while you're toting a very expensive worthless piece of counterfeit art in your crypto wallet.
Speaking of counterfeit art, be on the lookout for counterfeit NFTs. Scammers will use bots to scrape Google images, for example, then steal the images and create NFTs out of them. This is why it’s important to look into the artist you are purchasing from and make sure to steer clear of anyone with a spotty portfolio or background.
If you see an NFT from a well-known artist or brand, they should have a blue checkmark by their name—always.
No matter how good the price may seem, or how legit the artist’s profile looks, don’t become one of the many NFT explorers whose ship was almost sunk by a fake or counterfeit NFT.
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It’s not all turbulent waters.
The NFT scams that are out there are virtually endless. As we continue to pioneer the NFT world and more people buy, sell, and trade, keeping up with best practices and the latest scams is a great way to avoid falling into the pirate pit.
While NFT scams seem to regularly make the news, it isn’t all doom and gloom on the OpenSea marketplace. Brands would do well to both invest and create quality NFTs to engage with their consumer in a new and unique way.
So, don’t be afraid! Armor your ship, loosen your sails, and let's explore what treasures the NFT world has to offer, together.