NFT Safety

NFTs are digital assets that are stored on a blockchain. They can represent anything from a piece of art to a musical track. NFTs are unique and cannot be replicated, making them valuable to collectors and investors.

However, because NFTs are still a new technology, there are some risks associated with purchasing them. This blog will provide some safety tips to help you avoid being scammed when buying NFTs.

1. Know the different kinds of scams

There are two main types of scams that you should be aware of when buying NFTs: phishing scams and rug pull scams.

Phishing scams occur when someone tries to trick you into giving them your personal information, such as your password or credit card number. They may do this by pretending to be a reputable website or NFT marketplace.

Only a few months ago, according to tweets from the firm and its CEO, a hack on OpenSea appeared to be a phishing scam. According to statements by OpenSea, a phishing scam that resulted in 32 users signing into a fraudulent payload from an attacker, leaving some NFTs (non-fungible tokens) stolen. At least some of the stolen NFTs have been sold for roughly $1.7 million. OpenSea is the world’s largest NFT marketplace, backed by notable venture capitalists including Andreessen Horowitz and Sequoia Capital.

Rug pull scams happen when a project owner suddenly disappears, taking all the money raised with them. This can leave investors with worthless NFTs.

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When we talk about “expensive” NFT rug pulls, there’s usually a celebrity tie. Celebrities have a significant amount of influence over their followers. The younger the fan base is, the more likely they are to accept everything their favorite star tells them at face value.

Most celebrities will look the other way when a story or promise does not add up with enough money. We touched on the odd case of Floyd Mayweather and how advertising “scam” NFT projects have tainted his reputation previously.

2. Don’t click on suspicious attachments or links

If you receive an email or message that contains an attachment or link, be wary of clicking on it. Only open attachments and click on links from sources that you trust.

3. Authenticate sellers

When buying NFTs, make sure that you are dealing with a reputable seller. Do some research on the seller beforehand and check reviews to see if other buyers have had a positive experience.

4. Keep a strong password

When creating an account on an NFT marketplace, make sure to use a strong password. This will help to protect your account from being hacked.

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5. Cross reference NFT prices through reputable NFT marketplaces

Before buying an NFT, check its price on multiple marketplaces to get an idea of its value. This will help you avoid overpaying for an NFT.

6. Use 2 factor authentication

Whenever possible, enable two-factor authentication (2FA) on your NFT marketplace accounts. This adds an extra layer of security and helps to prevent your account from being hacked.

By following these safety tips, you can help to protect yourself from being scammed when buying NFTs.

In June of 2018, the NFT marketplace Cryptopia was hacked, resulting in the loss of over $2 million worth of NFTs.

In July of 2018, the NFT marketplace EtherDelta was also hacked, with over $300,000 worth of NFTs being stolen.

These hacks highlight the importance of using a reputable and secure NFT marketplace. They also emphasize the need for investors to be aware of the risks associated with buying NFTs.

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Protect yourself from hacks by downloading your digital portfolio to a secure independent digital wallet.

As you can see various scams have been launched continually on unwary investors in the NFT space as the technology has evolved.

When it comes to investing in NFTs, always remember to do your research and to take precautions to protect yourself from scams. By following these safety tips, you can help to ensure that your NFT investment experience is a positive one.

Read more about NFTs here