How to keep your NFTs safe from scammers



According to Wikipedia, the first known non-fungible token (NFT) was created in 2014 and the first NFT project was launched in late 2015. It took a few years and more projects for the concept to reach general public awareness, and then a few more for the massive investments in NFTs that followed. .

In 2020 and 2021, hundreds of millions of dollars were spent on NFTs. The boom was obvious but puzzling to many, as buying an NFT of a piece of digital art (a song, a photo, a video, an in-game collectible, etc.) does not mean you get copyright, intellectual property , or other legal rights to the digital asset that the NFT represents.

What, then, is the appeal of NFTs?

We have asked Satnam Narang, a research engineer on the staff of Sustainableto shed some light on the matter for the uninitiated and offer some safety tips for those who have already invested in them.

Keep NFTs safe

What do buyers use NFTs for?

“Most often associated with digital art, NFTs are considered the modern equivalent of an art collection. Only a certain number of NFTs are produced for a project and they have a variety of characteristics, which can contribute to the value of an NFT from a rarity point of view,” explains Narang.

“Most of the popular NFT projects are so-called PFP (profile picture) projects like CryptoPunks or Bored Apes. Buyers buy them and use them as profile photos on social networks, because social networks have become our digital art gallery. While it is true that anyone can right-click and save a PFP from one of these projects and claim it as their own, because these are blockchain-based projects, there is a way to verifiably prove ownership. Recognizing the value of NFTs as PFPs, Twitter began offering crypto enthusiasts the ability to verify ownership of their NFTs on the blockchain in a more transparent way.”

He attributes the recent popularity of NFTs in part to the fact that, for many cryptocurrency enthusiasts and investors who missed the early days of Bitcoin and Ethereum, NFTs have become another investment vehicle and potential profit opportunity. .

Several notable projects have seen the value of their NFTs skyrocket over the past year, even as the broader cryptocurrency market entered a bear markethe pointed.

However, it should be noted that the NFT market has cooled something ever since.

How are NFTs secured?

NFTs are bought and sold on NFT markets (for example, OpenSea).

“NFTs are typically stored in hot wallets – cryptocurrency wallets easily accessible over the internet via browser extensions like MetaMask. This allows users to easily access their NFTs for the purpose of selling,” says Narang.

“Some experienced users may choose to store their NFTs in cold wallets, which are offline wallets (physical devices) that are not connected to the Internet. Cold wallets include hardware wallets like Ledger or Trezor, which require a user to securely store a private key offline to access their funds or NFTs in their cold wallet.”

NFT: a hidden treasure for scammers

As software engineer Molly White documented in her Web3 Is Going Great project, NFT projects getting engaged It has become almost an everyday thing. rug strip in dubious NFT projects it has also been known to happen.

It’s hard for those looking to buy NFTs or get the chance to mint some to be absolutely sure they’re not being duped.

“Fraudsters often have a window of opportunity to target NFT projects that are trying to add more value for their owners. These projects will do things like offer airdrops of tokens that are only given to NFT holders or plans to pivot into things like the metaverse, where holders of these NFTs can gain first access to a digital piece of land in the project’s metaverse.” Narang explains. .

“If users miss out on these airdrops or opportunities to acquire digital property titles, they are more likely to be scammed by unexpected offers. Scammers also really take advantage of the urgency factor, saying that an NFT project is only reopening airdrops or granting access to acquire digital property titles for a limited time or for a certain number of users.”

Beware of phishing

Fraudsters can go after NFT owners through imitations of the various projects or through widespread cryptocurrency phishing that gives the attacker control of the victim’s wallet.

Skepticism is an NFT collector’s best friend, Narang notes. “Unsolicited messages on social media claiming you may be involved in an airdrop or NFT mint are more likely to be scams. If you are unsure, you should visit the social media accounts of the respective NFT or Discord projects to validate these claims, but I can assure you that in 9 out of 10 cases, these are simply scams designed to steal your digital wallets.”

It’s better to miss out on a promising potential NFT project than to have all your cryptocurrencies and NFTs stolen from your wallet, he opines, advising NFT owners to consider using cold storage for their NFTs and other digital assets.