NFTs have become increasingly popular since 2021. The total NFT sales crossed $41 billion in 2021, making it a multi-million dollar market. Everyone now wants to be a part of the community and earn profits.
The explosion in the NFT market has also given unintentional rise to scams and theft. Scams and theft have led to people losing their valuable tokens.
Though buying NFT is simple, NFT security often goes unnoticed.
In a world where everyone is bragging about their prized collections, it becomes easy for scammers to target you. Fraudsters have become extremely sophisticated with time, so you need to be extremely vigilant.
To ensure your NFT security, never interact with unverified links, accounts, and NFTs. Moreover, storing NFTs in digital software wallets, cold hardware wallets, or InterPlanetary file systems is the best way to protect them.
Stay with us through the end as we look in-depth at popular NFT scams and how to avoid them. In addition, we have compiled a list of the safest methods of storing your NFTs and some tips on NFT security.
How to save yourself from NFT scams?
Did you know that you can trade NFTs worth billions of dollars with a single click? However, if you are not cautious, you could lose them all.
The following are some of the most common NFT scams and how you can protect yourself.
Fake NFT pages
You must have observed how it is difficult to find the official page on OpenSea for some overly famous NFT stores and collections. It is because as soon as an NFT collection or its airdrop is announced, the platforms are loaded with fake mint pages.
There is a possibility that you are paying thousands of dollars thinking it is valuable, while it is simply a fake page. Even though NFT platforms verify and remove the fake pages, scammers still take buyers’ money.
What adds to the advantage of the scammers is your rush to get hold of the NFT in a short span of time. When the clock is ticking, most people don’t verify and fall victim to the minting scams.
How to avoid fake NFT minting pages?
- Do not click on unverified NFT collection pages.
- Always verify the source of NFT minting before going forward.
- Ensure to double-check the domain name.
- Check from the NFT collection’s official website or discord link that you are minting from a verified link.
- Do not blindly trust any page or mint NFTs in haste.
Fake airdrops
Your wallet address is publicly visible on a blockchain network. It means that anyone can interact with it simply by sending NFTs to your wallet.
A hacker can easily send an NFT airdrop even without your permission. When you interact with the malicious NFT, the hacker gains access to your personal details and wallet. In such cases, he can transfer your NFTs to his wallet.
Interacting with unknown malicious NFT is just like giving access to your bank account.
How to avoid unverified NFT airdrops?
- Do not interact with unverified NFT airdrops.
- Always be cautious of any new NFT airdrop to your wallet.
- Always check the source of the NFT airdrop.
- Check if the airdrop belongs to the original collection or not.
Impersonation scams
A scammer can easily create an account similar to any famous NFT store, artist, page, collection, or account. They impersonate the original account by copying all the details from the original account as it is.
Both the original and fake accounts look similar but have a slight difference. People usually ignore minute details and fall prey to scams.
Let us assume the original account of a famous NFT store is NFT1community. The fake account might read NFTs1community with a slight addition of “s” that goes overlooked.
The fake account or page can then send malicious DMs to people and fool them. The DMs might contain unknown links to hack your personal details. They can also pose as the brand and ask you to share your details with them. Sometimes the fake accounts also circulate false news and rumor.
Having a large number of followers gives people the impression that an account is trustworthy. But in this digital age, you can easily gain fake followers with bots.
How to avoid fake accounts?
- Do not get fooled by the size of followers.
- Do not interact with DMs sent from unknown accounts.
- Check the account of the followers who are following the account.
- If you firmly believe it’s a fake account, report it.
How to safely store your NFTs?
In order to keep NFTs safe, keep them in software or cold wallets. You can think about NFTs as gold jewelry. You need to keep them in a secured location, ensuring maximum security.
Keeping NFTs on NFT marketplaces or platforms is never safe. Anyone can hack into your account and steal your NFTs. However, digital wallets add an extra layer of security for your assets avoiding thefts.
Here are some ways you can securely store your NFTs.
Software wallets
Digital wallets are one of the most commonly used methods for storing NFTs. An additional layer of encryption, seed phrases, and passwords secured the wallets.
The software wallets are also called online wallets as they are connected to the internet. You can easily connect your wallet to the NFT marketplace and use it as you wish.
Though software wallets are easy to use, it is not as safe as you might think. As it is connected to the internet, it is easily accessible by any browser and therefore vulnerable to hacks.
Cold hardware wallets
The safest way to store your NFTs is with a hardware wallet, which works like a USB drive. Anything connected to the internet poses risks of hacks and thefts.
As hardware wallets are not connected to the internet in any way, no one can get access to it. That is why a hardware wallet is the best way to store your NFTs.
The probability of losing your NFT collection or investment is very low with cold wallets. The only way you can lose your NFTs is if you forget the password or misplace the wallet.
Interplanetary file system
An InterPlanetary File System stores your NFTs off-chain reducing the risks of cyber-attacks.
The IPFS uses CIDs to add an extra layer of security to your wallet. CIDs are content identifiers to prevent malicious URLs from accessing your NFTs.
Though you can use IPFS to store your NFTs, they can still be hacked from a computer.
Extra NFT security tips
Here are some additional NFT security tips to protect your investments.
- Always be aware of unknown accounts, airdrops, and malicious links.
- Never interact with unverified links, pages, and NFTs.
- Use strong passwords for your account and wallets.
- Keep your wallet seed phrase securely.
- Never share your personal details like log-in credentials, passwords, or seed phrases with anyone.
- Avoid dodgy sites and links.
- Store your passwords offline.
Conclusions
The best way to ensure the security of NFTs is to keep them in wallets. However, it will not guarantee total security if you are not cautious and alert.
Every now and then, scammers come up with new ways to cheat you. It’s your responsibility to be alert to anything that makes you suspicious.
