Top NFT Scams You Should Know About REPLAY - Crypto Breakdown March 9, 2022
5m | Mar 9, 2022This is a replay of the episode that aired on Feb 14, 2022. Our host Joe Dewitt has lost his voice due to intense partying last night and will be back with us to evaluate crypto news and headlines again tomorrow. Stay tuned!
Episode Summary:
I talk about the common NFT scams you should watch out for. I explain what malicious NFT drops are and what an NFT Rug pull means how you can avoid them. I describe what a fake NFT marketplace looks like and how to spot it.
Questions? Ask at joedewitt@benzinga.com and we will answer!
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Unedited Transcript:
Hey, everybody happy Monday. Hope you had a wonderful weekend. My name is Joe Dewitt and this is the crypto breakdown. So previously we took a look at some scams in crypto. And today we are going to take a look at some scams and NFTs. So the first one would be fake NFT stores. Now these are essentially stores with a very similar URL address with maybe one slight.
And it actually looks exactly like the marketplace or does a replica of a certain marketplace. And what they do is they actually try and connect to your wallet. And the second that you connect your wallet to that third party, your wallet is then compromised. This has been a very popular way to gain access to individuals, crypto wallets.
So it definitely be cautious when you're on a marketplace to make sure that it is actually the marketplace you intend to use another really popular NFT scam, um, would be counterfeit NFTs or artists, and personally. Now, ideally the great thing about NFTs is that this should be, um, verifiable. You should be able to go through and look at the blockchain and say, okay, this artist or this company, or this project, didn't actually make this NFT, but for a lot of people that are new in the space and new coming in 10 FTEs, it's really hard to make that distinguish.
So they end up getting left with counterfeit and FTS or NFTs, essentially with Nova. Because they were actually not done by any sort of well-known artists. So this goes without saying, but when you were looking at an NFT project or hoping to purchase an NFT, it is definitely important to look through each scan or soul scan or whatever, um, blockchain you were using.
Make sure to check the smart contract and make sure that you actually know what you were purchasing. This will really help you get an understanding of what you actually trying to purchase, and we'll help you stay away from counterfeits. Now, another very popular scam in the NFT community would be NFT airdrops.
And essentially what they do is airdrop you malicious NFTs, hoping that you will interact with these contracts. Maybe send them to a different wallet, try and sell them on the marketplace. And by interacting with these smart contracts, you essentially are compromising your. Now there are some very wholesome airdrops out there.
And, um, communities of NFTs that are just looking to, um, share NFTs and airdrop them to people to increase, demand and increase popularity. It is definitely important to consider the fact that there are malicious NFTs out there. That will be airdropped with the intent to hack your wall. Definitely. If you see an NFT in your wallet, that you have no clue how it got there best to not interact with it, or do some research before interacting with that smart contract.
Now for the most popular scam in the NFT community, which has known as the rug, you may have heard the rug previously, essentially. Pulling out the rug from underneath investors, which in a literal sense is when it developers bring the project down to zero, whether it is by announcement or it is actually pulling the JPEG off of the blockchain because NFC is have to be updated.
They have to be maintained on the blockchain. If a developer decides to pull their JPEG, they're essentially leaving the NFT worthless with no visual appeal, essentially rugging investors and bringing the collection down to zero because it is now worth nothing. There have been many projects. In the past, essentially, all that means is someone created a project with the hopes to make exponential growth and then just scam investors with no intent to make an actual real collection.
Now, this is the most important crypto scam because it is the hardest to see coming. It is really hard to determine if something is going to be a rug. And most of the times when they are, it is projects that you. I think of, so the only way to go around this would be to just really put some effort into doing some research before you purchase it on Ft, making sure that the developers are well-known.
And if they're not, if they're anonymous developers make sure that their white paper or their roadmap or whatever, they're using shows some sort of dedication to the community. Cause that will really go a long way. And if you can tell a developer is in it for the community and to give back to investors, then ideally it should be.
Wholesome NFT collection. That's all the time we have for today, guys. Thank you so much for tuning in. You can follow it, subscribe to the podcast, which will all be in the description below. Have a great d
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