How to protect yourself from scams while you trade NFTs

Updated: Nov 26

The world of Web3 contains probably the highest concentration of innovators compared with other sectors of the global economy. Unfortunately, this applies to Web3 scammers as well, who are making an absolute killing out of NFT investors.

Because crypto investing is at such an early stage, the combination of low transparency and high financial stakes makes it a target-rich environment for the enterprising con artist.

NFTs are particularly attractive for criminals. The whole premise of an NFT's value is complicated, and complexity makes it easier to manipulate the human brain.

Because you can rarely recover what you lose, you should be doubly cautious when engaged in transactions involving crypto assets, and certainly in the case of NFTs. This article gives you an overview of how to spot when you are being conned.

How scams manipulate the brain

First of all: realize that you are a potential victim! Nothing makes you more vulnerable than thinking that scams are something that happens to other people.

Second: understand how scams typically work. The scammer will try to align something you want to believe with something that benefits them. The means the process will start with a good feeling. Everyone wants to get a good deal or catch a break, so that is how a scam will present itself: “If you act now…” “You’ve been selected…” etc.

In the eagerness for the promise to be true, your brain shuts down critical thinking and blocks out observations of salient data that call into question the desired outcome. You are capable of making errors that you would not normally make.

This vulnerability is baked into the code of the human brain and unfortunately, there is no patch or update that can fix it. But there are measures that can offset the risk.

The bottom line: the better the deal looks, the less you should trust your instincts, and the slower you should move to part with your money.

Wallet grabs

Source: The Cryptonomist

It’s a sad fact, but true, that the majority of money being lost in the NFT space is due to investors giving scammers direct access to their crypto wallet!

Crucially, this involves enticing the investor away from an established platform like Binance. This could be through sharing a link on Discord, announcing a ‘giveaway’, or some form of hype. In more sophisticated cases, it involves creating a close copy of a legitimate site, so the investor believes they are on an established platform.