ARE NFT PROJECTS SCAMS?
In recent times, NFT is well known and is a topic of discussion on social networking sites. However, not everyone understands and accurately grasps the information related to NFT projects to be able to invest in them effectively.
What is NFT?
NFT is an abbreviation of the phrase non-fungible token. Alternatively, NFTs can be understood as unique digital collectibles on the blockchain or collectible pieces of cryptographic art.
NFT can be understood as a digital product encoded into separate lines of code and stored on the Blockchain platform. For example, when lending 1 BTC, one can use another 1 BTC to pay but When borrowing a painting, it is not possible to return another painting of the same value. Currently, NFT is gradually being known as a way of generating income. In-game NFTs can be sold to other collectors and players.
Currently, NFT games are gradually becoming a way to generate income. You can sell your NFT game items to other collectors and players.
In a nutshell, each NFT has a unique value, representing a unique type of digital asset managed using blockchain technology. Because NFT ownership and transaction history can be tracked, the blockchain acts as a decentralized ledger.
What is Blockchain?
Blockchain is a database system where transactions send, receive, and store information encrypted and tracked on the Internet.
It is like a ledger that stores information in the form of data blocks and is assembled into a chain. Each data block contains information about the creation time and is associated with the previous block, along with a timecode and transaction data. Once that data is accepted by the network, there is no way to change it.
The peculiarity is that blockchain can only grow. It means only information can be added, it is not possible to select a cell and delete previously existing data or edit it in any way. Therefore, what is recorded on the system will not be changed, which is the reason why the assets formed from the blockchain become transparent and valuable.
Are NFT projects scams?
Based on the analyzed concepts of NFT or blockchain, it can be understood that the application of blockchain technology to NFT is to create trading, buying, and selling markets using digital technology. This technology helps enhance the value of traded assets by being unique, authentic, and transparent. So, in this sense, NFT projects are not a scam.
The value of NFT lies not in the product, but in its proprietary rights, guaranteed and certified by the blockchain. One can create NFTs from digital products and sell them. After that, the activities, transactions, and transfers for the NFT are all recorded on a public and decentralized ledger. Anyone can verify, and trace the origin and ownership of the property, thereby avoiding plagiarism, counterfeiting, or sudden copyrighted by someone.
However, because of the huge profits and huge hits it has generated since its inception, NFT projects have let a lot of consequences happen in the process of management and operation. Despite being a highly independent and secure system, NFT can still become a tool of nefarious profit for digital asset thieves.
- Forgery of ownership
The most typical type of fraud is impersonating the real owner to trade and sell works. A lot of the NFT-tagged artwork is for sale by fake ownership accounts.
Simon Stalenhag — a digital visual artist — found an impersonated account with NFT attached and sold his artwork on a page called Marble Cards.
Derek Laufman — a famous painter — quickly corrected and exposed the fake account of the same name. However, one of his works is for sale and NFT is attached for thousands of dollars on Raible.
Devin Elle Kurtz, an artist, reflected on the management of NFT trading platforms after he discovered his work was for sale as NFT on Marble Card.
The vulnerability of the NFT trading system is also an inadequacy problem. Thieves simply forge ownership and sell it for nefarious profits by posting copies of the artwork without any copyright endorsement.
- Phishing to steal electronic asset wallets
This is a form of fraud that steals accounts and is not new. Thieves will set up a website with an image similar to the sites that investors often visit and lure them to visit.
Specifically, there was once a scammer who went by the name “cryptopunksbot”, a name similar to the NFT craze at the time, which was CryptoPunk. The thief provided a link that took investors to another place, where he promised to give investors 10 Cryptopunk, valid as part of the 4th anniversary of the launch of crypto punk. And of course, there are no gifts at all, on the contrary, investors also have a decent amount of Cryptopunk stolen.
- Risk from investment groups
NFT in particular or blockchain technology, in general, is a potential area. In the future, this technology can also be applied in many other aspects, not just money, payment, and asset storage. Scam groups will flaunt the effectiveness and efficiency of this technology. Since then, attracting a large number of individual investors to invest in the fund that the scam group has set up. Calling investors to invite new participants and get paid commissions is like a multi-level scam.
How to invest in NFT projects to avoid being scammed?
NFT is a type of digital asset that brings many useful applications for the development of science and technology and other aspects of life. Therefore, NFT systems must ensure that in order to list assets for sale on exchanges, the seller must have sufficient proof of ownership.
In particular, information on the Internet is difficult to verify. In order to invest in NFT projects safely, investors need to use official platforms to avoid scams that hinder the investment process and consider carefully before making any offers. your financial decisions.
Tips to avoid theft and NFT scams :
Create unique strong passwords for crypto wallets and NFT accounts.
Never click on NFT-related links or attachments if you’re not sure who the sender is.
Enable two-factor authentication on all NFT accounts. Using biometrics such as fingerprint scanning and facial recognition is nearly impossible to recreate identity.
Before buying NFT, double-check the price on an official trading platform like OpenSea, Axie Marketplace, or Mintable.
When wanting to buy NFT, always verify the NFT seller’s account to make sure they are real. You can look on their social media or Discord profile for a blue checkmark that verifies their identity.
Do not share your recovery password with anyone. This may affect NFT and any other crypto-currency stored in the wallet.
In order to be able to participate in the safe NFT market, investors must study to understand blockchain technology and learn about how to buy, sell, store, trade, and manage tokens, then find the right options suitable technology platform, a potential token for investment. It is difficult when new technology projects are born more and more and we have to change and update our knowledge continues to be able to invest effectively. Among them are also many “ghost projects’’. If we do not study thoroughly and have enough information and understanding, it is easy to become a “delicious bait” for fraudsters in cyberspace.
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