How To Avoid NFT Scams | 7 Tips To Apply

How do people get scammed with NFT?

As the NFTS trend spreads and gains mainstream acceptance, scammers are lying in wait to scam people. Scammers go where the money is being made and there is no exception when it comes to non-fungible tokens. Here are some tips that will help you avoid getting scammed.

How To Avoid NFT Scams

1. Never give out your secret phrase

Giving out your secret phrase is comparable to giving away your Atm pin or bank account password, you do it with extreme caution. Your secret phrase holds all the power over your crypto wallet and the digital assets within. If someone were to get a hold of your phrase, they could easily transfer all your assets to another wallet address leaving you with nothing.

The only time you should ever need to enter your secret phrase is if you need to import your wallet. This would usually only be required if you have removed the app from your phone or the extension from your computer.
If you visit a site that requires you to enter your wallet’s secret phrase, it’s very likely you are on a scam site.

2. Avoid visiting untrustworthy sites

Scammers love to take advantage of basic human nature. As humans, we sometimes misspell things—leading us to the wrong site. In the NFT world, these scam sites can be extremely dangerous.
Scammers have been known to create sites that are an exact replica of an authentic site, leaving unsuspecting victims susceptible to a cyber attack.

If scammers are able to get hold of your secret phrase, or even gain control of your desktop, they will be able to gain complete access to your wallet and all of the assets within.

Always double-check the URL to ensure the address you are visiting is correct, never enter your secret phrase—especially at the request of a site, and avoid doing anything you don’t feel absolutely comfortable doing. Keep in mind, that if something seems too good to be true then it probably is.

3. Always do your own research

Doing your own research on any digital asset you are considering investing in is critical to ensure all your assets remain safe, including your currency.

One key sign to look for when investigating a potential investment is to look and verify that the creators of the project are completely open and honest about who they are as humans. If you find little or no information regarding the actual human being behind a project, someone who is willing to put their own reputation on the line, this should be a huge red flag.

4. Watch out for the pump and dump.

The classic pump and dump scheme is one of the most misleading plots in the NFT space.
One of the easiest ways to detect a pump and dump scheme is to study the transaction history of an NFT.

It is common to see a nice and steady rise in value with a diverse group of buyers, depending on the number of assets available. If you happen to see the same two or three people buying and re-selling for a higher price, this could be an indication of a pump and dump scheme.

If you find yourself in a pump and dump project, it is best to get out as quickly as you can—and hopefully without losing any of your money. An even easier way to avoid losing money due to a pump and dump scheme is to avoid the situation entirely by doing your own research.

5. Only transact with people you trust

Make sure you only transact with people you know and trust on a personal basis. Transacting with an untrustworthy person can end very badly. Say you send someone your digital asset with the promise of payment upon delivery of the said asset, but instead the person doesn’t pay you and keeps your non-fungible token.

If you are looking to buy or sell one of your NFTs it’s best to use a secondary marketplace such as OpenSea. When you sell an NFT on OpenSea, you have the ability to keep the sale private and specify one address that is allowed to purchase it.

6. Be aware of counterfeit NFTs

Nobody likes a fake, especially when NFTs are supposed to be unique, irreplaceable, and non-interchangeable.

Counterfeit NFTs have been purchased by people who thought they were purchasing the real deal. One easy way to check for a replica is to look at the transaction data and check who minted it and when. Then you can compare this data to what you know about the NFT creator and ensure it is indeed authentic.

These replica NFTs generally look identical to the real thing but keep in mind, that it’s all about the metadata and when the token was actually minted on the blockchain. Avoid authenticating an NFT simply by how it looks.

7. Steer clear of brand impersonators

Brands and start-up companies are generally very active on social media. From Twitter to Discord, brands are all over online, which is why it is essential to know the exact brand name and logo when you are looking to buy an NFT from a specific brand. Usually, you are able to find a trustworthy link on the brand’s official social media accounts.

A common indication of brand impersonation is additional words or characters in the name. For example, scammers may add the words Official, Authentic, or even add a checkmark to make an account appear verified. If you are unsure of brand authenticity, reach out to the brand personally or someone you trust in the community.

Furthermore, brand impersonators are known to contact people through their DM on social media and other various platforms and act as customer support or community moderator. A brand should never directly contact you to ask you for your seed phrase, to send money, or any other request that may make you feel uncomfortable.

If you are unsure of the brand or any members of the brand reaching out to you, it’s best to just avoid them until you have time to do your own research and authenticate exactly who you are communicating with.

 

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