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Blockchain technology should have made life simpler for digital artists selling unique tokens of ownership to others. A public ledger can give buyers a record of who owns a piece of art in perpetuity.
Blockchain gave some artists a new chance to earn money. However, some artists admit that the last year’s crypto boom has been a mess. Anyone can “mint” a digital asset as an NFT, even if they don’t own it.
How do you spot a fake NFT on the market? While there is no definitive rule, our guide will put together a set of tricks everyone can use. Scammers are getting more and more clever, and collectors should be careful.
The Problem of Fake NFTs
The NFT market has a big problem with fake digital collectibles, and it’s obvious. The concern is evident if a platform like OpenSea says that 80% of the NFTs it lists are fake.
Artists often see their work in OpenSea’s digital gallery. The issue is that these collections usually belong to scammers. Unfortunately, as the NFT market has grown, so has the quantity of fraudulent activity.
OpenSea has shown how many NFTs on its platform are fake or stolen. According to the company, almost all NFTs made for free on the system seem to be spam or stolen.
This figure is very high because many people have stolen and made NFTs out of their work. So it’s not shocking to artists who have recorded this problem.
The issue has something to do with the “lazy minting” method. This strategy lets people make NFTs without paying fees until someone buys their art.
Start from Social Media Pages
In the NFT world, the Discord app has been essential. You’d know this if you’ve been into NFTs for a long time. If an NFT community is active on Discord and Twitter, this can reduce the chances of a scam.
Also, a legit NFT group keeps members updated on the release date. Twitter and Discord are also helpful ways to inform investors how many units will make up a collection.
The same is valid for the average cost of each digital artwork. These metrics are all critical pieces of evidence of a fair NFT collection.
Run if you only see NFT Discord chats and discussions far from the collection’s goal. You might also want to check all the available information on the “creators.” Also, look at their tweets: an unused Twitter account is always a bad sign in this business.
Avoid Ridiculous Floor Prices
Low or high floor prices might signify that an NFT isn’t real. Scammers often cut the prices of their collections to make them more appealing. The purpose is clear: a fake collection often needs these tricks to attract investors.
If you think that the floor price of an NFT is too low, ask yourself: “how is this possible?” The answer is that, probably, you are looking at a fake collection. Buy these NFTs, and you might not be able to find an investor for them for a long time.
Check the Crypto Address of the Collection on Etherscan
The project wallet address is one of the things to look out for on NFT marketplaces. Most Ethereum-based marketplaces let people put their wallet addresses on their profiles. This operation brings more transparency to the business.
However, this option can be unavailable for different markets and blockchains. So stay away from that collection if an NFT doesn’t have a crypto wallet address on the profile.
Even if there’s a wallet address, you should check to see if it’s real and works. A website called Etherscanallows you to verify the validity and transaction record of Ether wallets.
Trust Verified Collections and Creators
If you want NFTs, always buy them from official collections on OpenSea. If you’re going to check their verified status, look for the blue badge on the portal. This strategy is a trick to avoid easy scams.
You can also look at the confirmation when you hover your mouse over it. Creators receive a verification badge as well. People can be sure that the platform is real because it checks the people who make it.
Consider Googling the Images
Because an NFT is so unique, it has much power. Challenging its uniqueness is a direct attack on the whole NFT community. Scammers also sell fake copies of real NFTs as pictures to fool people.
To find out if an NFT is real, you can download it and upload it to Google Images. The tool can perform a backward search from any image. This trick can only work for NFTs consisting of pictures.
If you find a picture like yours, check its origin. If there are copies from different places, you may need help.
A Look at the Number of Owners for a Collection
Of course, an NFT project with many investors will be good. On the other hand, it might have fewer NFTs in it. Some examples: A site that lists more than 10,000 contributors with only 15,000 NFTs looks decent.
However, if only one person invested in an NFT collection, that might not be good. Sometimes, these collections say to have many NFTs. If you buy these NFTs, you might get scammed.
Not All Giveaways Are Free
While it’s common for NFT teams to give away collectibles, some bad people take advantage of this system. If you do not pay enough attention, falling into a scam is high.
The goal of a giveaway is to get more people to invest in a project. Specifically, creators expect giveaway receivers to spread the word about the project.
Scammers don’t care about being honest. Instead, they want to lure as many people as possible and get away with it. Sometimes they do this by announcing absurd giveaways, and they do it by making up a fake account.
The lack of a strong community is a bad sign in the crypto world. Avoid entering a project that won’t happen, don’t go for promises like this. As we mentioned earlier, you should also check the project’s Discord page in this case.
Keep an eye out for giveaways that say they will give away more than they look like. Scammers may ask for you to link your account with a fake NFT. This operation often leads to people taking tokens from you.
In the last few years, the total value of NFTs has been rising. There are many places where scammers can exploit lax rules and enforcement mechanisms.
The problem has become so common that some marketplaces have set up tools to help you. Therefore, we gave you a list of things to consider before buying NFTs on the market.