Posts tagged "NFT market"

NFTs

The 5 Most Common NFT Scams to Avoid

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The 5 Most Common NFT Scams to Avoid

Let’s dissect five of the most prevalent NFT frauds now that we are aware of how they operate.

Rug-Pull Fraud

When creators advertise an NFT and then withdraw after collecting substantial sums of money from investors, this fraud is known as a rug-pull. While they wait for investor money to flood in, these dishonest developers frequently utilize social media to cultivate trust and hype around their NFT. Once they have enough money, they stop the entire enterprise and disappear with it.

A pair of 20-year-olds named Ethan Nguyen and Andre Llacuna ran the Frosties NFT rug-pull, which is a textbook example of an NFT rug-pull scam. They advertised their NFT by making a number of promises, including special mint passes, freebies, and first access to a metaverse game. However, after receiving over $1.3 million in investment, they decided to deactivate their website and social media accounts.

2. Phishing scams

Typically, phishing is how hackers gain access to your NFT account information. They frequently use email or well-known social media sites and forums like Twitter and Discord to distribute fraudulent URLs for this purpose. Once you click the link and enter your information, hackers can access your account and compromise it using keylogging or spyware.

It is hardly unexpected that NFT phishing schemes are increasing. For instance, in a phishing attempt in February 2022 that was directed at OpenSea, the most well-known NFT platform, con artists made off with roughly $1.7 million worth of NFTs. OpenSea had requested that customers update their contact information, but con artists replicated the trading platform’s email and emailed links to phony websites to NFT owners.

3. Auction Fraud

When you try to sell your NFT on the secondary market, bid frauds frequently occur. Scammers make the highest offer when you put your NFT up for sale; thus, it makes sense that you would want to sell it to them. But these con artists have the ability to modify the coin being used for the bid without your knowledge.

Imagine if a scammer offers 20 ether to buy your NFT artwork. You should anticipate receiving about $9,000. (per the going rate at the time of writing). However, a cunning con artist may substitute 50 Dogecoin, which is only worth $5, for the cryptocurrency.

Always verify the type of cryptocurrency being used to pay you, and be sure not to take anything less than the agreed-upon bidding offer to avoid such fraud.

4. Pump-and-Dump Plans

Using deception and the dissemination of false information, con artists artificially increase the price of an NFT in a pump-and-dump scheme. Investors are left with worthless assets once they “dump” the NFT once the price increases and vanishes without a trace.

Typically, scammers create a frenzy around an NFT through social media and celebrity endorsements. They frequently spend large sums of money on the NFT, driving up the price and making it hard for investors to ignore.

5. NFTs with plagiarism

NFTs are fundamentally about producing distinctive digital tokens. On a lot of NFT platforms, plagiarism unfortunately proliferates. Over 80% of NFTs created with the use of OpenSea’s minting tool were false, according to a recent analysis. So there’s a good risk you may be purchasing a fake version of a legitimate artist’s creation.

Consequently, as soon as it is discovered that your NFT is a fake, its value will plummet. This is why you should check an NFT before buying it.

Less frequent NFT frauds

You might lose your NFTs by falling victim to other, less well-known scams that are just as harmful. Let’s look at a couple of them.

1. NFT Prizes (Airdrop Scams)

NFT giveaway scams, also known as airdrop scams, happen when con artists demand that you sign up on their website and promote an NFT in return for a free NFT. When you’re finished, they’ll email you a link that asks for your wallet information in order to award you the prize. These NFT con artists copy the information from your account and utilize it to access your NFT collection.

2. Investment fraud

When con artists establish legal NFT enterprises and promote them as profitable investments, investor scams happen. The projects, however, are completely useless. Once the scammers have amassed sufficient investor dollars, they vanish into thin air.

The Evil Ape investment hoax is one illustration. The unnamed NFT developer vanished with 798 ETH, totaling more over $2.7 million, and was never seen or heard from again. Do extensive research on the NFT developer to make sure they are reliable in order to avoid such frauds.

3. False customer service claims.

In this type of phishing scam, scammers assume the identity of customer service representatives for an NFT marketplace. They’ll normally get in touch with you via social media platforms like Twitter, Telegram, or Discord if they have a problem with your account. Then, pretending to be of assistance, they will email you a link to phony NFT markets that ask for your private wallet keys.

As a general guideline, only reply to inquiries for customer assistance coming from your authorized NFT marketplace. If you’re unsure, get in touch with your NFT marketplace’s official customer service channels.

Security Advice: How to Prevent NFT Fraud

Following are some helpful suggestions to assist you outwit even the most crafty con artists now that you are aware of the most typical scams in the NFT industry.

Avoid clicking on shady links. You can wind up providing a scammer access to your account information.

Never divulge your seed phrase or password. Additionally, to provide an additional degree of security, activate two-factor authentication on your account.

Before making an NFT investment, do some research. Before making a purchase, always confirm the identity and reputation of the NFT seller.

To encrypt and anonymize your NFT traffic, use a virtual private network (VPN).

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Investing in NFT: Is It Worth It?

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Investing in NFT: Is It Worth It?

NFTs, or non-fungible tokens, are a hot topic these days. No matter how you feel about NFTs, there’s no denying that their market has grown tremendously. There are now market projections of $40 billion, a 100-fold increase from four years ago.

As with everything new, there are a lot of rumors flying about. In the minds of some, it seems as if the NFT bubble is about to burst. Others believe this is simply the beginning of the NFT phenomenon’s mainstreaming. Investors who are already unsure whether or not to invest in NFTs and how much value a certain NFT project contains are further confused by the range of emotions expressed by those already bewildered by the chaotic atmosphere.

In reality, this misconception stems from misinformation concerning NFTs. Non-fungible tokens are more than simply a collection of digital pictures. Similarly, not all NFT projects are worth your time and money.

NFTs have a future and what constitutes a strong NFT project.

Is the NFT Market Just Another Speculative Ponzi Scheme?

They have received much attention since their debut. Websites monitoring NFT values indicate that their value has dropped dramatically from time to time, plunging as much as 75% in months. Most people thus naturally think that NFT hype is simply another bubble that eventually bursts.

NFTs, as well as every other cryptocurrency, have always been highly volatile. Cryptocurrencies have seen many highs and lows throughout the years. For example, the historical Bitcoin graph shows multiple bubbles throughout its decade-and-a-half life. Since anything constructed on a firm foundation will peak at the right moment, NFTs are no exception.

As a result, some people assume that NFTs are nothing more than digital art. On the other hand — since they provide artists with provable ownership rights and greater security and flexibility in purchasing and selling — NFTs aren’t to be discounted.

Optimists also argue that NFTs are worth the hype since they have more than just aesthetic appeal. Innovative ideas abound in the NFT gaming industry, for example. Gamers may buy in-game assets and explore new vistas while also helping others build their digital identities using NFTs.

The NFT’s ability to improve market efficiency is perhaps its most distinguishing characteristic. Digital artists benefit from this transparency by interacting directly with a worldwide audience without the need for expensive intermediaries, rather than artists traveling to Christie’s to be auctioned.

Using an NFT instead of a passport or other government-issued identification will make traveling easier and more secure. Physical assets like real estate, artwork, and fine jewelry may also be fractionalized via tokens.

In other words, NFTs aren’t just for show; they’re here to help. Events, software licenses, and even fan club memberships may all be purchased using NFT tokens. There is no need to create NFTs as baseless commodities or speculative bubbles since the possibilities are unlimited.

Is It Time to Join the Crowd?

Now that you know why NFTs are beneficial, it’s time to think about whether or not they may offer you good fortune.

It’s easy to join the NFT bandwagon if you’re a visual person or if you like trying new things. For the sake of art and enjoyment, you’re purchasing NFTs.

When considering an NFT as a potential investment, you must walk a fine line and be able to tell excellent NFT projects from poor ones. This guide will assist you: List 10 points to keep in mind before purchasing NFTs.

What’ll NFTs mean in 10 years?

When it comes to investing in NFTs, you may be surprised. NFT initiatives are expected to achieve a new milestone in the next 10 years. To demonstrate this, look at how much money Twitter, Reddit, and Facebook are putting into purchasing and selling NFTs.

Since NFTs provide privacy, safety, and interoperability, Mark Zuckerberg has said that he plans to incorporate NFTs into a new business model. If all goes according to plan, Facebook’s transition into Meta is likely to be based on NFTs, which will be at the heart of its transformation.

NFTs also play a significant role in the in-game marketplace. Gaming credits from one game can’t be transferred to another. Their credits are a waste after they’ve lost interest in a game. NFTs are already enabling players to transfer their leftover credits to other gaming platforms, so this may no longer be the case in a few years. The in-game purchases may be employed as investments rather than just for pleasure, thanks to their scarcity, transferability, and evidence of ownership.

One of Tether’s co-founders, William Quigley, makes an astonishing assertion about the technology’s potential use cases. He believes that in the next 10 years, every consumer good will have a digital twin. As many as 20% of museum artworks are fakes, and 3.5% of global commerce is based on fake goods, the ability to keep track of who owns what digitally might be a game-changer for everyone.

Investing in NFT: Is It Worth It?

When it comes to making investments, the stock market is the obvious choice. NFTs, on the other hand, are solely regarded as digital art by most people, making it difficult for them to connect them to the stock market or regular investing channels. A common misconception about NFTs is that they’re only used to represent digital artifacts like video games and music. Investment in NFTs indicates that one is investing in tangible and intangible assets that influence the lives of others.

Investing in NFTs and the stock market has a striking resemblance in the form of futures trading contracts. Like futures contracts, NFTs are based on actual assets, just as they are in the futures market. There is no reason to reject the legitimacy of NFTs if no one denies the feasibility of futures on the financial markets. NFTs, on the other hand, are more valuable than futures contracts since they address real-world issues. So it can be said that NFTs are actual investments that are expected to become the foundation of investment initiatives in the near future.

NFTs

The NFT Market in Numbers

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The NFT Market in Numbers

According to NFT industry data aggregator CryptoSlam, global NFT sales reached $18.5 billion in 2021, a 570-fold rise from 2020, as the record bid for Beeple’s digital collage and the excellent reaction for NBA Top Shot drew new collectors and raised prices.

From Ray-Ban and Gucci to McDonald’s and Coca-Cola, many businesses started to provide NFTs.

The market for new NFTs is expected to rise to at least US$30 billion this year, with monthly sales exceeding US$2.5 billion in recent months and rising as high as US$4.5 billion (figures as of February 2022). According to CryptoSlam, sales volume will likely expand by 50% to 70% by 2022 due to an estimated increase in purchasers of between 200 and 300 percent.

Contrast this with the roller coaster trip of other financial markets as central banks prepare to raise rates and inflation hits multi-decade highs.

As the entire market value went below US$2 trillion in January 2022, the lowest level since September 2021, Bitcoin and other cryptocurrencies failed to offer investors a haven.

NFT sales, according to CryptoSlam, were $4.5 billion in January 2022, barely shy of the all-time high of $4.9 billion in August 2021, according to the company.

In July year 2021, monthly NFT sales surpassed US$1 billion and have not looked back since.

Buyers and Sellers

January 2022 saw an increase in NFT sellers from 27,963 in January 2021 to 759,145 unique sellers in January 2022, which is a tiny decrease from the market’s all-time high of 791,631 in November 2021.

In January 2021, there were 29,581 unique purchasers, but in February, there were 910,611 — a new record monthly high. More than a million transactions on the Ethereum blockchain have been made since this measure started to be recorded in 2017.

However, despite a rise in buyer and seller variety, the value is still concentrated in a few traders and investors. According to recent research published in Nature, the top 10 percent of all NFT traders accounted for 85 percent of all transactions.

NFT sales are expected to be driven by “whales,” or investors with large portfolios, but the number of unique purchasers demonstrates that NFT-curious investors are warming up to this new asset class.

More than 3.7 million users have signed up for Coinbase’s soon-to-be-launched NFT marketplace at this writing. NFTs may now be purchased with Mastercard without the requirement for bitcoin, solving one of the present difficulties in purchasing NFTs.

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Guidelines for Minting NFTs

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Guidelines for Minting NFTs

NFTs stand for non-fungible tokens – unique tokens that represent a specific asset or good. They include digital art and collectibles. The notion of blockchain applications has been fundamentally shifted because of them. NFTs can be sold at auctions, opening up new revenue opportunities for creators. 

In the second half of 2020, the NFT market went boom, with one piece selling for $69 million. NFT art sales reached 4.9 million as of October 2020. The total cost of the sales amounted to more than $128 million. Doesn’t it sound rather intriguing when an NFT gives you the opportunity to profit from your art?

Even though minting NFT might seem like an easy process, people should consider several factors before getting started. Digital art can be mined into the Ethereum blockchain to become a public ledger for the Ethereum blockchain. The digital art will be invulnerable to tampering and modification. Similar to the mining of coins, the addition of NFTs to a blockchain is known as minting. 

So what does the process of Minting involve?

1. Create an Asset 

Make your best effort to create a piece of innovative and appealing artwork. In the digital age, there are numerous digital themes and media to choose from, such as abstract, political, audio, whimsical, and hyperrealistic. 

Almost any type of artwork can be sold through NFT art. 

2. Buy Ether 

Currently, most NFT development projects are based on Ethereum. As a result, Ethereum is a reasonable choice for this discussion of blockchain platforms. When you mint art as NFT, you create documentation of the piece of art on the blockchain. 

The subsequent sale and resale of your artwork would not change your identity as the original creator and owner. It also provides accurate records of every owner and offers public access to the blockchain, so everyone can see it. It is necessary to pay for the transaction if you need to create the record for your NFT art. 

Gas fees for blockchain transactions vary based on the level of demand. They are currently around $70. In any case, you will need some ETH to pay for gas before minting NFTs. 

3. Non-Custodial Wallet

Non-custodial wallets are a type of cryptocurrency wallet you can use to control your funds completely. This is essentially an account that is used to store and carry out cryptocurrency transactions. Furthermore, it is important to remember that a non-custodial wallet differs from a wallet managed by a centralized crypto exchange. 

The seed phrase can be accessed through a non-custodial wallet. Seed phrases are randomly generated 12-word combinations that enable wallet backup and access on multiple platforms and devices. In this way, you can mint NFT at the lowest cost without being restricted by exchanges from accessing funds. 

Right now, there are several non-custodial wallets you can use to reduce your NFT minting costs. On mobile, some good examples of non-custodial wallets include Rainbow and Coinbase Wallet. Laptop users may want to consider Metamask as an alternative.

4. Transfer Ether funds into the wallet

The next step in NFT minting is to get your non-custodial wallet up and running. To transfer ETH to the non-custodial wallet configured previously, you need your wallet address. When you send or receive crypto from one wallet to another, you use the account number as your address. The top of the Metamask wallet page gives you the option of copying the wallet address. 

5. Choose an NFT marketplace

The selection of an NFT marketplace depends on various factors, but it is an essential part of the process of minting NFT. OpenSea and Rarible are two of the most popular NFT marketplaces today. Users of OpenSea do not have to pay minting fees for each new NFT they create. 

Only when setting up their collection on OpenSea should users pay for the first time. Your buyers will compensate the gas fees in the case of subsequent NFTs. As soon as you mint your NFT, it goes into your wallet and you can sell it on the platform of your choice. As a result, you can mint your token on one platform and sell it on another.

6. Creating an NFT

The following steps demonstrate how easy it is to create NFT in just a few clicks.

  • Once you open the OpenSea site, you will find the “Create” option. The page will immediately request you to sign in to your Metamask wallet. 
  • In order to make sure you select the right course of action, you should read the message. 
  • The process of minting with OpenSea, is widely called lazy mining and entails minting NFTs as a collection. This means users have the option to involve several NFTs in their collection. 
  • With the “add new item” option, users can add new items to their NFT collection. 

Conclusion 

As you can see, the process of Minting NFTs is quite easy. 

In planning and preparation, you must be careful about the initial requirements or prerequisites. The demand for NFTs is growing, and creating NFTs may prove quite overwhelming. However, NFT trading generates concern regarding NFT minting costs due to the millions of people involved.

It is possible, however, to mint NFTs at a cost-effective rate if one organizes their endeavor strategically. Additionally, the availability of a wide range of platforms for constructing NFTs also makes this a favorable proposition for devotees.