When you are an active NFT trader, you cannot avoid all the scams in the world of non-fungible tokens. The most common NFT scams are phishing, counterfeit NFTs, and pumps and dumps.
2021 was a breakthrough year for non-fungible tokens (NFTs). But when something becomes popular like decentralized finance (DeFi) and the latest version of the web called Web3, there are also risks.
Follow the money is advice you don’t have to give hackers twice. Last year, hackers made $14 billion from crypto-related hacks, yet the number of cryptocurrency-related crimes has increased by 79% — and the risk is not yet out. But how do NFT traders protect themselves against scams? First, educate yourself. By understanding the most common NFT scams, you can keep your tokens safe.
The most important thing to note is that NFT pumps and dumps are bad news. NFT scammers will use hollow information to increase the floor price (representation of the lowest price for an item, updated in real time) of an NFT you are interested in. When they succeed in their tactic, they sell their items and leave others empty-handed. Also, a common trick is the tech support scam. When you are a Telegram or Discord user, you probably see crypto scams happening right under your nose.
This phishing scam is not obvious at all. Scammers use fake pop-ups to link to normal-looking pages, such as your portfolio. Or first-time buyers are struggling to close the deal and they accept an offer for help investing in NFTs. The digitally disguised scammer asks for your personal information, which he uses to steal all of your assets.
The third common NFT scam is no stranger to the world of intellectual property. The artists work hard on their original creations. It takes many hours to build an NFT collection, so when they get copied by someone else, it’s like biting into a sour apple. Scammers take the work of the artist and turn it into NFT. Buyers will believe they are investing in an original work of art and will make high value offers.