NFTs have quickly gained massive popularity with the advent of 2022, bringing a surge in NFT scams. Although they have been around for a considerable time now, NFT popularity stems from the rise of the metaverse, the 3D virtualized socio-economic hub, set to appear as 2022 progresses.
Since NFTs are digitized assets that are often high in value, their costs exceeding six figures, criminals find NFT scams an easy way to rip off money. However, when it comes to NFTs, the rise in NFT scams and frauds is a matter of concern. And while it is concerning, acquiring NFTs to keep up with the world’s digital pace is crucial. Therefore, it is best to look for tips to avoid NFT scams and secure your crypto.
Why are NFT Scams happening?
The answer to this issue can, at some point, be quite simple; that is, NFTs scams are happening because they are valuable. Since NFTs are digitized forms of assets, and their price value can exceed six figures, it is no doubt that everyone would want to acquire them.
Although NFTs are often known as digitized art pieces, they have grown so popular because they represent digital assets. Like any other cryptocurrency such as Ethereum, NFTs depend on blockchains and are high in value, similar to rare art pieces available within the real world.
However, the importance of owning an NFT goes far beyond that because they create an indelible digital record of your ownership within the blockchain. Hence, one particular NFT can’t essentially be replaced or reproduced.
On a digital landscape such as the metaverse, an NFT is slowly becoming the normalized form of currency. However, their use is not only limited to that. NFTs are valuable and often cost millions of dollars, giving their users exceptional leverages even in the real world. Therefore, as NFT value continues to increase, NFT scams grow alongside it.
But that is not all why NFT scams are happening. Most businesses also use NFTs to store and transfer data between users, making them a target for hack attacks.
Common NFT scams you need to be aware of?
The first step to any defense is to know your offense. If you don’t have a clear-cut idea of what you need to defend yourself against, you probably might not be able to build your defense up properly. Therefore, it is best to remain aware of common NFT scams such as:
- Fake NFT websites: As NFT popularity grows, many fake or phishing NFT websites have sprung up that often sell fake NFTs.
- Smart Contract Scams: Many NFT phishing websites duper visitors into revealing their private information, such as crypto-wallet private keys and stealing cryptocurrency.
- Rug Pull Scams: Scammers coerce people into investing in new NFT projects, and as the price of the NFT increases, they abruptly cash out, leaving investors with worthless assets.
- Bidding scams: This scam happens to NFT sellers when the purchaser changes your preferred currency to that of lesser value as a form of payment.
- Fake NFT support: The scammer personates as an official NFT marketplace staff member over social media or Discord channels, duping people into revealing their crypto wallet security phrase or other essential credentials.
- Giveaway or airdrop scams: Impersonating as a legitimate NFT marketplace staff, the scammer offers lucrative giveaway offers or airdrops in the disguise of a new or free asset in exchange for your crypto wallet credentials.
These scams are occurring rapidly and mostly feature social engineering tactics. Therefore, the critical point of ensuring security from these scams is to remain vigilant. Apart from that, there are also several other ways that you can ensure safety from NFT scams.
Here are some tips on how to avoid NFT scams:
Since NFTs are exceedingly valuable, and there seems to be a rapid rise in NFT scams altogether, it is crucial to remember some specific “rules” of NFT trading that could help you remain secure such as:
- Don’tDon’t give your private keys to anyone.
- Don’tDon’t trust unsolicited offers.
- Be careful when buying NFTs from online exchanges.
- Make sure you are dealing with a reputable seller.
Although these rules are somewhat enough to ensure safety from NFT scams, it is best that you look into extra security measures while dealing with NFTs. Here are the top 7 tips that you can use to prevent NFT fraud.
Tip #01: Do Your Research
The first step in avoiding NFT scams is to do your research. If something looks too good to be true, it probably is! Be sure to read reviews and check for any red flags before investing in an NFT.
Tip #02: Use a Wallet That You Control
Another critical step in avoiding NFT scams is using a wallet you control. This means that you are the only one who has access to your private keys. If you store your NFTs on an exchange, they may be at risk of being stolen or lost.
Tip #03: Beware of Fake ICOs
One common scam in the NFT world is fake ICOs. These are projects that claim to be raising money through an ICO but are just trying to steal people’s money. Be sure to do your research on any project before investing in it!
Tip #04: Avoid Unknown Exchanges
Another common scam in the cryptosphere is phishing scams. This is when a user is tricked into giving away their login information on an unknown exchange. Be sure only to use well-known and reputable crypto exchanges to avoid this.
Tip #05: Use Two-Factor Authentication
Two-factor authentication (also known as two-step verification) is a security measure that requires you to provide two pieces of information to log in. This can be a password and a code from a separate device, such as your phone. This added layer of security can help protect you from NFT scams.
Tip #06: Be Careful With Phishing Emails
Phishing emails attempt to steal your login information or money by posing as a legitimate company or individual. To protect yourself from phishing scams, never provide your login information in an email and always check the website URL you are logging into.
Tip #07: Use a Secure Browser Extension
A secure browser extension is a tool that helps protect your privacy and security when browsing the internet. Some of these extensions include AdBlock, Ghostery, and NoScript. Be sure to use a secure browser extension to help protect yourself from NFT scams when browsing the web.
What should you do if you fall victim to an NFT scam?
Falling victim to an NFT scam can be very harmful and cause long-term damage to your crypto wallet. Since NFTs are valuable, these scams can lead to high losses. Therefore, it is best to remain vigilant.
However, in case you are unfortunately a victim of such scams, the best way out is to contact the authorities. They can either help you retrieve your currency or your assets. You can also contact the NFT developers to see if they can help you recover your tokens.
In conclusion, NFT scams are happening because NFTs are valuable. They are also taken as representing real-world assets, such as collectibles or property. This makes them a prime target for scammers.
It is, therefore, crucial to ensure security and try to remain vigilant. Following the tips mentioned above and strictly abiding by NFT trading rules can help you stay secure from these scams.