As the world becomes increasingly digitized, non-fungible tokens (NFTs) have gained popularity as a way to assign and prove ownership of digital goods using cryptography.
How to spot fake NFTs?
NFTs for digital art have fetched millions of dollars, but as with any valuable asset, there is always the risk of fraud. So how can you spot a fake NFT?
Here are the top 10 tips to help you avoid falling victim to NFT scams:
Verify the legitimacy of the NFT seller or artist
If you think you bought an NFT directly from an artist, make sure to check their website and social media accounts to confirm. Look for official accounts and beware of fake ones created by scammers. It’s also a good idea to seek guidance and context from trustworthy NFT communities.
Carefully review the NFT website
Fraudsters have been known to replicate entire websites, so even if the NFT website looks legitimate, you might be using the wrong URL. Look for signs of fabrication, such as blank spaces, poor-quality text, and other errors.
And remember to never enter your financial information on a website before verifying its legitimacy.
Verify NFT sales volume
If you’re buying an NFT from a popular series, there’s a good chance it has been traded before. Check the NFT on a blockchain explorer or NFT marketplace aggregator to verify this. If the NFT has never been sold before, it’s worth doing more research.
Also, check the activity history to make sure the transactions don’t involve the same or a small number of wallets, even if there have been enough sales. This could be a sign that a fraudster is buying and selling their own counterfeit NFTs.
Examine the cost of the NFT
If the price seems too good to be true, it probably is. Check the floor price for the entire series to see how it compares to the asking price of the NFT in question. For example, it’s highly unlikely that a crypto punk you find for sale for $5,000 is authentic.
As mentioned before, it’s also important to make sure the price wasn’t manipulated by a select few wallets, even if it appears to be legitimate.
Check the contract address on the NFT
In addition to the seller’s wallet and the NFT’s on-chain data, it’s important to verify the contract address of the NFT. You should be able to learn the collection’s precise contract address from a reliable source.
If it differs, the NFT is not authentic. By checking the contract addresses, you can easily identify fake NFTs.
Check for authentication certificates
Some NFTs come with authentication certificates that verify their authenticity. If the NFT you’re considering doesn’t have one, or if the certificate seems fake, it’s possible that the NFT itself is also fake.
Research the artist or creator
If you’re interested in an NFT from a particular artist or creator, it’s important to do your homework. Look for information about their background and past work, and check to see if they have a reputation for creating genuine NFTs.
Check for watermarks or other security features
Some NFTs have built-in security measures to prevent counterfeiting, such as watermarks or special coding. If the NFT you’re considering doesn’t have these features, it could be a red flag that it’s not genuine.
Use a reputable NFT marketplace
To avoid fake NFTs, it’s a good idea to stick to well-known and reputable NFT marketplaces. These platforms usually have strict policies in place to prevent fake NFTs from being sold, and they may offer additional security measures to protect buyers.
Use common sense
Finally, it’s always a good idea to use your common sense when dealing with NFTs. If something seems too good to be true, it probably is. Don’t be afraid to ask questions and do your due diligence to ensure that you’re buying a genuine NFT.
Conclusion
Spotting a fake NFT isn’t always easy, but with a little bit of due diligence, it’s possible to avoid falling victim to scams. Make sure to verify the legitimacy of the seller or artist, carefully review the NFT website, check the sales volume and cost of the NFT, and examine the contract address.
By following these steps, you’ll be well on your way to building a genuine and valuable NFT collection.
