NFTs are one-of-a-kind items that can include paintings or trading cards, but the blockchain keeps track of who owns the file and where it is located. You can buy and sell ownership of unique digital items using NFTs and keep track of the ownership using blockchain technology.
Digital artist Beeple sold one NFT for $69 million at Christie’s, and Grimes sold a collection of 10 digital artworks for around $6 million. Many NFTs have become significant assets.
As a result, NFT platforms have become a target for hackers who aim to steal digital artworks or steal credit card information to acquire more.
The compromise or theft of crypto assets does not involve a hack of the underlying blockchain or the servers that house the crypto assets. Many systems must be compromised for a hacker to have access to crypto asset private keys.
Cybercriminals are more interested in compromising the digital assets owners use to buy, exchange, and store than in the actual cryptographic coins themselves.
Meanwhile, scams have been around for a long time in human history. Numerous advantages were supplied by the internet and computer networks.
Every new piece of technology opened a new door for criminals to exploit. But, this does not rule out further advancements in technology. Instead, we’ll keep working to fix bugs and thwart bad actors from exploiting the system.
The cycle of war and peace is never-ending. Despite this, numerous individuals have been successful in improving our well-being over time.
What Are NFT Scams?
It is possible to identify and classify NFT scams in several ways. This is a relatively new technology, and digital assets have only been around for a few years now.
Both the security infrastructure and the audit procedures have been implemented in a completely new way. If the root of the problem is complete decentralization, it is unnecessary to invest time and resources in solving it.
Types Of NFT Scams
1. NFT Phishing Scam
One of the earliest internet frauds is phishing. Indicating the stage of technology’s development shows how many individuals are trying it out at the beginning.
This type of scam disseminates emails that appear to be appealing, or they create malicious URLs that steal personal data. This happens when people click on them out of curiosity.
So, it is advisable to not divulge the 12 or 24 seed phrase of your Bitcoin wallet. This information will never be shared with a project. Secret recovery phrases should never be shared with others. Write it down, and save the receipt, just in case.
As with NFT wallet addresses, no NFT project will ever ask for yours. This is true unless it’s on a forum that is unrelated to the company’s official website.
When you’re asked for your NFT wallet address by someone other than the NFT project itself via email or a link, always think about what you’re about to do before you click or share any personal details.
2. NFT Pump And Dump Scam
Unlike conventional NFT frauds, pump and dump tactics do not steal your NFTs. It is not uncommon for early supporters of an NFT campaign to do so because they’re excited about it.
However, several investors who failed to sell their NFTs before the deadline were left with a slew of worthless securities. This is a common occurrence in today’s world because of the ease with which new internet groups can be established.
The best way to avoid having your NFTs stolen is to do your research on the project. Interact with a select group of people.
3. NFT Catfishing Scam
When someone imposes to gain access to your personal information, this is called catfishing.
As an example, scammers pretending to be NFT founders target a member of the community. Consider the possibility that you’ll be asked for the location of your wallet.
As a result, it appears to be authentic. However, you won’t ever hear from a member of the original staff. It’s now common knowledge among NFT practitioners.
How To Prevent Your NFTs From Hack, Theft, And Plagiarism
The following methods can be used to prevent your NFTs from malicious activities which can lead to an eventual loss.
1. Choose A Non-Custodial Wallet
Your NFTs are safe in non-custodial wallets. Seed phrases of 12 to 24 words, as well as a combination of touch and password authentication, safeguard them.
The non-custodial crypto wallet is the best place to keep your NFTs, rather than the marketplaces you visit.
Malware, keylogging, and phishing scams can all be used to gain access to non-custodial wallets if you aren’t careful.
2. Cold Storage
Hackers cannot connect to or access cold storage since it is an offline and external derivative.
Your digital assets, such as NFTs, are protected by this software. Every transaction in cold storage must be routed through cold storage’s authority, which increases the overall transaction time.
3. Be Cautious Of Potential Buyers
Many individuals reach out to you with tempting offers when you’re on the internet. If you’re going to investigate someone, you’ll need a clear point of view and an understanding of the market.
A con artist’s proposition that seems too good to be true may just expose you to risk. Therefore, don’t give anyone access to your wallet because transactions on the blockchain cannot be reversed.
4. Use Reputable Marketplaces
Cryptocurrency and NFT businesses have spawned a plethora of marketplaces. In many cases, they are ill-equipped to safeguard consumers from theft or fraud.
You must only utilize trusted NFT marketplaces to perform transactions with your crypto wallet and NFT. Before registering with a marketplace, be sure you know how secure it is.
This is what you can do to guard your NFT against counterfeiters and cons. Due to the blockchain-based nature of NFTs, NFT marketplaces like Nifty Gateway have no control over an NFT that has been stolen.
Thus, it seems unlikely that users who have had their collections stolen will ever be able to get them back. A lot more people use the bigger Bitcoin and cryptocurrency wallets and exchanges.
It is common for those platforms to quickly restore their assets, or to have insurance in place to reimburse victims of theft or breach when they are hacked
Two-factor authentication (also known as two-factor identification, or 2FA) protects your account from being hacked if you utilize it on several platforms.
Owners of cryptocurrency should ensure that their devices, apps, and networks are as secure as possible even if they use two-factor authentication.
NFTs can be stolen and hacked, just as crypto assets can be mined from wallets and exchanges. Therefore, it is important to stay woke to this reality and be wary of exposing your arts and details anyhow on your device(s).