- NFT scams frequently prey on new customers' inexperience with blockchain technology.
- Combat fake products. The best way to identify suspect NFTs and dishonest sellers is to thoroughly examine the NFT's specifications, website, and creator's biography.
The legitimacy of NFT collections has become a hot topic as the popularity of NFTs has grown. How can a phony NFT be identified? What exactly is a bogus NFT? Before spending money on a digital collectible, you should learn how to verify an NFT's legitimacy.
Because the market is new, con artists have started to exploit users' ignorance. The easiest approach to protect yourself in this case is to make sure you are equipped with the fundamental knowledge necessary to authenticate an NFT on your own and know exactly what you're buying.
Are NFT scams widespread?
Simply put, absolutely! The market has become more appealing for con artists who prey on naive consumers through fraud and plagiarism as a result of the rapid surge in popularity of NFTs and the metaverse in 2020 and 2021. Blockchain and NFT technology might also be difficult for many novice investors to comprehend. These two elements combine to create the ideal environment for con artists to take advantage of novice NFT investors.
Making NFTs also has a low entry threshold. This is fantastic for artists, creatives, and NFT visionaries, but it also allows for quick and inexpensive production of false NFTs by criminals. It's not all bad news, either. The advice provided below will help you spot suspicious NFTs. Like in any other area of investing, investing time, being patient, and doing some research can go a long way to protecting your money.
Top Advice for Verifying the Authenticity of an NFT
1. Verify the legitimacy of the NFT merchant or artist.
Verify the location of the sale if you think you are buying an NFT directly from the artist by visiting their website and social media accounts. Verify that the account you're viewing is legitimate and not a fake one created by a phony person.
Cross-checking the facts on various social media platforms and official websites is usually a smart idea. Finding a reliable source of information is difficult; this is probably a bad indicator. Asking for guidance and context in reputable NFT groups is an additional choice. Once more, be sure to rely on reliable sources rather than just one individual.
If you're buying a collectible on the secondary market, you may find out where it came from by looking up the seller's wallet address and the NFT's on-chain ID. If the marketplace won't let you view the seller's wallet address, use extra caution.
2. Check the NFT’s website thoroughly
Fraudsters have been known to replicate entire websites. The NFT website may appear to be real, but you could be using the incorrect URL. A phony website generally has errors, poor-quality language, and other fabrication-related indicators that are obvious if you look closely enough.
Additionally, you should never link your wallet to a website before confirming its legitimacy. Once your wallet is linked to a phony website, its owners can easily access your money.
3. Check the Contract Address on the NFT
Another vital piece of information to verify is the contract address of the NFT, in addition to the seller's wallet and the NFT's on-chain data. You ought to be able to learn the collection's precise contract address from a reliable source. The NFT is not legitimate if it differs.
4. Verify NFT Sales Volume.
There is a strong probability that the NFT has been traded before if you are buying an NFT from a popular series. By viewing the NFT on a blockchain explorer or NFT marketplace aggregator, you may verify this. If the NFT has never been sold before, further research is worthwhile.
Check the activity history again to be sure these transactions don't involve the same or a small number of wallets, even if there have been enough sales. It's possible that a fraudster is buying and selling their own counterfeit NFTs in an effort to influence sales volume and even pricing.
5. Look at the cost of the NFT.
Price that seems too good to be true is probably just that. To compare the asking price of the NFT of interest to the series' floor price, check out the entire series as a whole. For instance, it is highly improbable that a CryptoPunk you see for sale for only $5,000 is genuine. As was previously said, even if the price appears to be accurate, you should still double-check to make sure it hasn't been manipulated by a select few wallets.
6. Use a reverse image search on NFT.
Even while you may believe you are purchasing an original work of NFT art, it might not be the case. You can find further occurrences of the NFT's picture online by performing a reverse image search on it. While some of them might be genuine, you might discover that the image was previously created by another artist without their permission for an NFT. Additionally, you might not have the original NFT you were hoping for but rather a replica of one.
Use caution when trading NFTs.
Even while using reputable exchanges or NFT Marketplaces, you should exercise caution. The given advice is a wonderful starting point and should, in most circumstances, assist you in determining whether you are purchasing genuine goods. Keep in mind that every blockchain transaction is final. Trust your instinct and wait to make a purchase if something doesn't seem quite right.