Non-fungible token:s or NFTs have taken the world by storm. What will 2022 have in store for us? As per current indications, there is a storm hanging over the cryptocurrency markets. Likewise, NFTs have seen their fair share of skepticism. Also called manipulations in the market, scams, and security threats. But, if there is one thing about risk, it’s the fact that not taking risks turns out to be costly and full of regret. Hence, there is a need to overcome unnecessary fears about the fate of the broader markets. The world has overcome such phases of volatility before. Likewise, with NFT scams.
The world adoption of blockchains will create a new phase of growth for the global economy. This is once the full benefits percolate through the nations within this decade. NFTs and blockchain scale the creator economies with the help of community software. They will run using NFTs, cryptocurrencies and smart contracts. Hence, the near times represent the uncertainty in the air, yet the long-term certainty. This is to the ones who see the rewards over the risks.
Likewise, the near times also reveal NFT scams, thefts and security issues we need to avoid. NFT scams cannot be avoided, but you can make sure you’re safe.
Why Do NFT Scams Happen?
They happen because scams have been happening for centuries of human civilization. Using computer networks and the internet produced many benefits for us. Every improvement in technology also gave bad actors a way to exploit technology. But, that does not mean we stop creating new technology. Rather, we fix more issues and continue to thwart malicious actors from gaming the system. It’s a perpetual cycle of war and peace. Yet, over the long-term, we have continued to be successful in improving our well-being.
Types of NFT Scams:
There are many ways to identify and classify the scams that take place in NFT land. The use of smart contracts and: blockchain technology: is only a few years old. The security infrastructure and audit procedures are new. A cause of full decentralization is enough to spend hours and money on the problem. Likewise, as when the internet was spreading, so were the scams.
Phishing NFT scam:
Phishing was one of the first scams to take place on the internet. It represents how early in a technology’s lifespan that people are trying out. They are with a sense of curiosity and wonder. Scammers make use of this unfamiliar technology. They send innocent looking mails or create malicious links that cause data theft. This happens when users click on them with some curiosity.
Always remember never to share your 12 or 24 seed phrase of cryptocurrency wallet. Projects will never ask you to share it with them. In fact, it is common wisdom that one’s secret recovery phrase is never to get revealed to anyone. You should write it down and store the receipt. Many suggest not to store the 12 or 24 secret phrase even on their computer systems. This is since hackers can gain access to your key and lock you out of your funds. Likewise, NFT projects will never ask you to reveal your NFT wallet address. Unless on any other forum apart from their own verified and owned website. When a mail or link from any other online source apart from the NFT project asking for your NFT wallet address. Always remember to think before you click or reveal personal information.
Your NFTs can get stolen from your NFT wallet without you even knowing about it. Avoid having your NFTs stolen by phishing attacks. We know them as scammers fishing around for victims from a digital ocean. Since the NFT space is new, there are many people who have fallen prey to having their NFTs stolen.,
Pump and Dump NFT Scam:
Pump and dump schemes are not exactly one where your NFTs get stolen, they are also akin to a classic NFT scam. Early believers of an: NFT project: buy into the project because of hype. This is while leaving a bunch of holders who did not sell in time to leave behind a pile of worthless NFTs. The founding team has exited all social media accounts by this time. This scenario has happened a lot of times since it is so easy to build online communities in today’s world. In fact, the most use cases about building international communities of civilian participants.
The best way to avoid having your NFTs stolen is to do your own research about the project. Interact with some community members. Sometimes, you will notice several programmed accounts with the same chat pattern. Such things reinforce the notion that bots are engineering the chat activity. This is to make it look legitimate besides the human ones who also double up time to time. By giving vague answers that all revolve around the price of the token or art.
Catfishing NFT Scam:
Catfishing means to impersonate someone to make you give up your personal details. For instance, an NFT project, scammers target someone in the community, posing as a founder. Imagine yourself receiving a prompt to reveal your wallet address. This seems legitimate since it’s coming from the project’s channel. But someone from the founding team will never reach out to you. This is common wisdom in the NFT space now.
NFT Scams: Smart Contract Vulnerability:
Many projects ensure arttheir artworks are safe and sound. Marketplaces and protocols enable a secondary marketplace of trade and provenance of ownership. We need to make sure that their smart contracts are safe from exploitation. NFTs drained out in the process and sold to the secondary market is a loss to both the service provider and artist.
NFT Scams will stay. Avoid NFT Scams:
There are many ways NFTs get stolen. Hence, we understood how development creates ways for some to game the system. That too in their own way by staying anonymous. But, with time, we have learnt to fix the original flaws. This is a process as better security researchers understand and build new technology.
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