Non-fungible tokens, also known as NFTs, are developed and released on the blockchain platform. These tokens represent the unique value of an asset. NFTs are often released as a piece of art, picture, sculpture, or even digital content. If you want to know more about Bitcoin, click here.
For the past few years, NFTs have taken a unique position in the investment market. Each NFT is cryptographic and designed with a unique purpose. The token can be created easily by any artist through the process of minting. During the minting process, the token owner creates a blockchain transaction. It then goes through a smart contract functionality which creates the token.
What type of assets use NFTs?
Common types of NFTs and their utility
NFTs have gained an active and stable investment option among crypto investors. Many crypto investors have taken a step forward to buying and owning NFTs as well.
Let us take a close look at some common NFTs and their utility.
It is the most common type of NFT investment. Such types of investments are created by either an individual or an institution with a brand value. Fans can buy this token and add them to their collections. The most popular NFTs include Marvel, Star Wars, etc.
NFTs are popular in the gaming platform. Such types of tokens can also be bought and sold in the market.
Understanding common NFT scams
NFTs are gaining huge popularity. Along with this growing popularity, there is also an increase in the number of scams in the market. NFT is still a budding market and is open to phishing attacks. There are a few controversies about this investment model.
NFT creates its brand value through its utility and unique features. The token also takes advantage of technological advances and new trends in the market.
Listed below are the five most common NFTs scams that have hit the industry.
Creating a fake marketplace
The first thing about investing in NFT is to find a reliable platform to do so. There are millions of marketplaces that allow you to buy and sell NFTs. However, there are a few marketplaces that are not legitimate. There are fake sites that sell NFTs. in case you go about buying one from this site, then your user credential gets stored. Such sites may also ask for your private keys and even passwords.
Making a fake offer to clients
NFT scammers possess themselves as legitimate sellers and make a few offers. There are also phishing emails that hit your inbox often. Learn the industry and understand scamming events. Do not follow such embedded pages and lose your money.
Providing fake technical support
Beware of fake technical customer care representatives making a call to you. Suppose you are looking for any technical support on your NFTs and search for the same on any website. Scammers can gain access to this information and call you as support representatives. Additionally, such representatives may even ask you to share your screen. During this event, scammers can gain access to your user credentials, including private keys.
Offer of fake giveaways and rewards
Yes, this is a popular scamming model. Social media is running behind giveaways. This term is now used on every popular platform. NFT scammers can call you to join their giveaway campaigns. They might ask you to create your user credentials with their website. The software in such phishing sites keeps a record of passwords you create. It means you are willingly giving such scammers access to your digital wallet.
Scheme of pumping and dumping
Another popular scamming to watch out for. In such cases, a group or a person buys a huge volume of tokens. In such cases, they create a market demand for a particular token. Once the price goes up, other genuine investors also tend to buy them. Once the price reaches a high point, the tokens are released to the marketplace. It creates huge inflation creating higher supply than demand.