Understanding NFTs Before You Buy

Understanding NFTs Before You Buy

Understanding NFTs Before You Buy

An NFT  (non-fungible token) is often a one-of-a-kind piece of digital artwork that belongs to a single owner and is tracked via a blockchain-based digital ledger. NFTs are rapidly becoming one of the most popular digital assets on the internet, with the market for NFTs topping $40 billion in 2021.  Unfortunately, like with any new trend, scammers are attempting to take advantage of the rising wave of NFTs. If you’re unsure about a project’s validity, you may protect yourself and your company by receiving legal guidance on any digital asset you’re considering purchasing. The following are some instances of prevalent NFT frauds:

  1. Fake websites and accounts on social media

A scam as old as time,  the imitation of a real NFT company’s website or social media outlet is an easy way to scam buyers without them even knowing it. Because these fakes are often quite convincing, it’s crucial to take common-sense security steps before transferring your crypto to buy an NFT or supplying any payment information to a website. Verify the URL of the website in the NFT marketplace. Check that the company’s social media platforms are verified or acknowledged on its official website. To protect your internet connection, use antivirus software and other security precautions.

  1. Fake Offers and Giveaways

Another common scam is to collect personal information on the scammer’s site, often under the guise of another purpose. Do not click on a link in an email that leads to a giveaway. The link will most likely direct you to a phishing site meant to steal your personal information. In some scams, you are asked to provide your wallet information in exchange for a free NFT. Although it is typically acceptable to disclose your public wallet address, you should never reveal your private keys or secret seed to anybody. Scammers frequently attempt to gain access to your wallet in order to steal NFTs or other digital assets stored inside. Any email, text, link, or AirDrop that asks you to provide personal information on an untrusted website should be avoided.

  1. Fake Customer Service

A phony customer support page is another popular fraud. If you need assistance with your NFT, be sure you’re utilizing a reputable NFT provider’s customer support portal. Scammers will create phony customer care profiles on messaging platforms such as Discord or Telegram. Customers who aren’t aware of the fraud give their account credentials to obtain “customer service,” allowing the scammer to access their digital wallets. Before entering any account details or personal data, be sure the company has a real customer support account.

  1. NFT Replicas

Even if you don’t own or pay for an NFT, you can usually download the same digital content that the NFT owner has access to. Having access to the digital artwork by downloading the digital file does not grant you ownership of the NFT, which may seem illogical. The ownership of the NFT is recorded in the digital ledger on the blockchain where it was created. Scammers frequently get the digital files for NFTs from the NFT’s genuine publisher, then re-mint fresh NFTs with those digital files and sell them. The duplicate NFT which seems to be identical to the original NFT, is worthless. Looking at the on-chain data to establish that the genuine publisher generated the NFT is often the best approach to confirm its validity.


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