013 – Many of us have heard of NFTs, the boom of these in recent years has been quite remarkable, but after this time many consider it a scam. The most expensive NFT is Right Click and Save As guy, which was acquired by rapper Snoop Dog for $7,088,229.
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But what are NFTs really? NFT stands for Non-Fungible Token (non-fungible goods are those that cannot be exchanged, they are not substitutable). Tokens are units of value that are assigned to a business model, such as cryptocurrencies. NFTs have a close relationship with cryptocurrencies, at least technologically, although they are opposites, since a Bitcoin is a fungible good, and an NFT is a non-fungible good, but in essence, they are like the two sides of a technological coin.
NFTs are considered as something unique, their price is really whatever people want to give them, and taking advantage of their popularity, we can find that there are people paying $260,000 for the drawing of a rock attached to a NFT. They work through blockchain or blockchain technology. This is the same technology as cryptocurrencies, which work through a decentralized computer network, with blocks or nodes linked and secured using cryptography. Each block links to a previous block, as well as a date and transaction data, and by design they are resistant to data modification.
NFTs are assigned a kind of digital certificate of authenticity, a series of metadata that cannot be modified. This metadata guarantees their authenticity, records the starting value and all acquisitions or transactions that have been made, as well as their author.
To collect NFT, you need a virtual wallet that can store both cryptocurrencies and NFT. You also need cryptocurrencies to make your NFT purchases. There are NFT marketplaces where you can search for NFTs for sale: some of the most well-known are OpenSea, LooksRare, Rarible and Foundation. Many people claim that NFTs are a way to support digital artists, while others argue that there is a resource cost involved in any blockchain transaction. If you are interested in NFTs it is critical to be aware of the risks involved, including NFT scams and fraud.
NFTs gained popularity in the tech and gaming space when they were introduced as a new way to make money through the virtual world. In 2020, the NFT market grew by almost 300% compared to 2019 and now the volume of NFT trading transactions exceeds USD$300 million.
But as not everything is rosy, the purchase of these digital works, as a tangible product, has its advantages and disadvantages, so users who want to access one of the tokens run the risk of possible fraud.
Many insiders claim that NFT scams are big business. They include everything from impersonating an artist and making fake offers on OpenSea, to typos and insider trading. Last year, OpenSea limited the number of times users could generate NFTs for free on its platform because more than 80% of those created with the tool “were plagiarized works, fake collections and spam.“
On the other hand, LooksRare is plagued by another serious problem: laundering trading, an illegal type of market manipulation that inflates the volume and value of trade by buying and selling an asset for oneself or among an organized group.
However, NFTs remain a digital attraction and an active market. Because of this, the points to watch out for when buying an NFT would be:
Don’t open files from vendors you don’t know.
Beware of sweepstakes.
Never share the private key.
Verify the creator of the project.
Only trade with official sites.
Avoid visiting untrusted sites.
Use burner wallets.
Check the verification marks.