Blockchain crime’s new favorite: NFT scams

NFT scam revealed!

At 10:45 pm on May 20, 2021, Huobi Prime Phase 7 project APENFT (NFT) was officially launched for trading. After two rounds of limit trading, according to Huobi Global data, a total of more than 26,000 people worldwide participated in the aggregated trading, and users were highly enthusiastic in participating.

In the first round, there were 12,984 participants and 1,448 winners; a total of 41,710 lots were actually placed, and 1,500 lots were drawn, with a winning probability of 3.59%. The number of participants in the second round was 14489, and the actual number of people who sold was 13910.

As of 23:10, NFT rose as high as 0.00000522 USDT, with a maximum increase of 40 times.

NFT has become a new favorite artwork out of the circle, and NFT solves the problem of “copy and paste” in the traditional Internet era, which cannot effectively protect intellectual property rights.

NFT price discovery mechanism is currently in the original stage, all people can use to enjoy the digital artwork, only one person / organization is the owner of the digital artwork, can be transferred through negotiation, auction.

This price discovery mechanism will eventually flow to the exchange (and the mainstream coin, all players together to bid), the price of NFT boats up.

Blockchain crime's new favorite: NFT scams

Everydays: The First 5000 Days

The market has already seen “king-size” NFTs

For example, on March 11, Christie’s online auction of the NFT artwork Everydays:The First 5000 Days was sold for a record price of $69.34 million.

After NFT has entered the public eye, the regulation of this new technology product is not easy due to factors such as chainization, coinization, internationalization, and irreversibility of smart contracts. Some experts assert that NFT will become the next legal disaster area, using the concept and banner of new technology for pseudo-innovation.

Especially in the field of art investment, antique investment, pop-up signatures, celebrity signatures, etc., fraudsters will be a piece of art of low value through the chain of packaging, creating momentum, raising prices, “cutting leeks. Then a precipitous fall, or destroy the physical artwork to operate, to obtain huge profits.

What is NFT
NFT (Non-Fungible Token), translated as: non-homogenized token, has the characteristics of indivisible, irreplaceable and unique. On the blockchain, cryptocurrencies are divided into two categories: native coins and tokens.

Native coins include the well-known Bitcoin and Ether, etc.; tokens are attached to the existing blockchain and use smart contracts for bookkeeping, such as Tokens issued on Ether.

Tokens can be divided into homogeneous and non-homogeneous.

Blockchain crime's new favorite: NFT scams

Homogenized tokens (FT), Tokens that are substitutable for each other and can be split near infinitely. e.g.:A has a bitcoin and B has a bitcoin, there is no difference in essence, this is homogenization, a homogenized coin.

Non-homogenized tokens (NFT), on the other hand, are unique, non-splittable Tokens, such as crypto-cats, tokenized digital tickets, etc. It is also equivalent to RMB with number, there will not be two RMB with the same number in this world, and there will not be two identical NFTs. common tickets (invoices, web domains, etc. are non-homogenized).

The key innovation of NFT is to provide a way to mark ownership of native digital assets (i.e., assets that exist in, or originate from, the digital world) and that ownership can exist outside of a centralized service or centralized repository.

NFT ownership does not prevent others from reading it; NFT does not capture information and then hide it, but only captures it and then discovers the relationship and value of that information to all other information in the chain.

NFT, because of its non-homogeneous, non-detachable nature, allows it to be tied to some real-world commodity.

In other words, it is actually a digital asset issued on the blockchain. This asset can be game props, digital artworks, tickets, etc., and is unique and irreproducible. Since NFT has natural collecting properties and is easy to trade, crypto artists can use NFT to create unique digital artworks.

Blockchain crime's new favorite: NFT scams

NFT is based on a 2017 pixel avatar project in Ether called CryptoPunks, which cap the total number of these pixel avatars at 10,000, no two characters can be the same, and are free to anyone who owns an Ether wallet, and can be put up for trade on the secondary market after collection.

The blockchain mini-game Cryptokitties is rapidly gaining popularity, which is a game of jerking off in Ether.

Blockchain crime's new favorite: NFT scams

Cryptokitties is the first ethereum-based game

Application areas of NFT are currently in the field of intellectual property, such as NFT representing a painting, a song, a patent, a photo, physical assets, records and proof of identity, financial instruments, etc.

Types of NFT scams
As NFT continues to grow in popularity, there has been an explosion in the number and scope of scams. The main ones are: counterfeit NFT platforms, fake NFT platforms, NFT counterfeiting, fake NFT airdrops, and freebie social media scams.

Counterfeit NFT Platforms

Counterfeit NFT platforms are common online scams in which users appear to be on the same site as the official platform and scammers attempt to obtain their login or credit card information.

Fake NFT Airdrop

A fake NFT is an impostor, a fake limited and real increase. Since the content carrier of NFT is public, forgery is basically costless, leading to constant counterfeiters. People must carefully confirm the issuer account and NFT records.

NFT social media scam

NFT social media scam in view of Banksy style NFT (not created by Banksy himself) for sale at a high price. The scammers take advantage of human weaknesses (there is a free lunch in the world) and place information in social media Tiwtter, WeChat groups, QQ groups, postings, and gathering places for members of various cryptocurrency projects, sharing information, expressing opinions, answering questions, and claiming “official” and “authoritative” words. The information is placed in the form of sharing information, expressing opinions and answering questions, and claiming to be “official” and “authoritative”.

NFT Fraud Prevention
NFT fraud is endless, so how to prevent it? Zhi Fan technology security experts remind everyone to pay attention to the following points to raise awareness of prevention.

  1. investors must do their homework before investing, calm analysis, rational investment. Can be in the relevant NFT media, community calm analysis and observation, so as not to be fraudulent elements (trustees) set.

NFT fraud packaging routine is the uplink packaging, make up a story (such as a celebrity’s life signature), so that participants form emotional resonance, push up the price, hype. Do a reverse image search for NFTs to ensure that the NFT you want to trade does not appear on other NFT exchanges/marketplaces.

  1. When buying NFT, try to choose to buy on a large NFT trading platform, while carefully identifying whether the website visited is the official website of the trading platform to prevent access to fake phishing sites resulting in money loss and information leakage.
  2. Do not easily click on unknown links sent or pushed by strangers, unfamiliar emails, social networks, social software, etc., and carefully identify the authenticity when you need to enter account and bank card information.
  3. Use binary authentication or physical token generators or hardware device based authentication applications to protect your passwords/keys.

Suggestions for combating NFT scams to prevent them

  1. Suspicious websites or domains monitoring, information collection, it is recommended to strengthen the automated information monitoring and manual feedback channels of such websites. Pay special attention to information monitoring of digital artwork, ballerina electronic co-branded cards, digital pets, etc.
  2. Provide official reporting, whistleblowing, and identification services to include such NFT identification into the clue base for detection, and continuously update and appropriation to the public.
  3. NFT practitioner operator website domain name for strong filing supervision, with the record of the relevant departments to cooperate. Website filing, the practitioner will produce a sense of awe and traceability.
  4. strengthen the NFT practitioner technical team for supervision, case detection and clues to provide anonymous bounties, for emerging areas to increase the efforts of crowdsourcing technical services.

In the face of NFT’s hot growth momentum, Zhi Fan Technology believes that: on the one hand, investors are advised to invest rationally, stay calm and weigh the pros and cons before acting; on the other hand, we hope that relevant regulators will establish a risk regulation system for NFT and other blockchain businesses as soon as possible to regulate their development.

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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