Dude, Where’s My NFT?

Ten ways to protect yourself from scammers in the crypto realm

While the majority of the public is still trying to figure out what non-fungible tokens (NFTs), cryptocurrency and blockchain technology are, those who know the value of NFTs today and in the future are busy figuring out how to keep their digital artwork, property of increasing utility, and personal information safe from hackers, Lookie-Loos, and other ne’er-do-wells.

My stomach has dropped more than once as I’ve gone through the crypto looking glass and down the NFT rabbit hole. There’s much to learn and many ways to win and lose. The emerging Web3 global community is full of innovation, and no group innovates quite like scammers.

Let us be clear: Art collectibles are just the tip of the iceberg. Blockchain-verifiable ownership documents allow ownership to be authenticated by anyone. As a result, even homes are already being bought with smart contracts. Now imagine how the medical world will look and feel in a few short years. or sooner, when prescriptions and medical records will all be protected and sent seamlessly via the blockchain in the form of NFTs.

Other than simply shouting “Don’t get hacked!”, here are 10 key ways to make sure that only you have access to your NFTs and that you hang onto them for as long as you would like to.

1. Never give your seed phrase to anyone… ANYONE!

A seed phrase is a series of random words—usually a dozen or so—that identify your ownership of a crypto-wallet such as MetaMask, a fan favorite amongst NFT collectors. This string of random words is nearly impossible to crack without NSA-level tactics, and let’s face it, if the NSA wants access to your crypto wallet you’ve got bigger problems than keeping your art safe from pilfering. If bad actors get their hands on your seed phrase of random words, that’s it.

That’s all they need to take ownership of your wallet and steal your whole NFT collection.

2. Scammers are sophisticated, but basic precautions still work.

Scam artists can come up with duplicate websites as fast as legitimate websites can be created. Sending emails with similar addresses all looking to trick you into clicking and giving them access to your property is a time-tested tactic that still works in 2022. Not all wallets work off of seed phrases, but if you’re using one that does, be very careful. The tricksters are out there. They’re very smart and keep coming up with ways to dupe people into giving newcomers their passwords.

3. Your wallet should be as cold and hard as your heart.

I strongly recommend getting a cold wallet. I highly recommend Ledger for your wallet-needs because a cold wallet keeps your NFTs from being moved unless physically authorized by you on your cold wallet device.

4. It shouldn’t need saying, but…

Make sure you’re using official links. I know, we’re all so sophisticated we can’t be scammed by such simple phishery, right? But many Discord channels are riddled with scammers sending DMs, pretending to be mods or imitating the founders of projects claiming you’ve won something you actually might want, like a free NFT.

Double check that you are in the CORRECT Discord, then rub your eyes, shake your head like a cartoon duck and check again! THEN and only then, use the official links section to land on the correct page. The link on which you land should be the link that is posted in the NFT project’s Discord. Always double and triple check yourself. Make sure you are clicking on the correct links. Duplicate websites or Discord channels may fool you into thinking you’re buying the correct NFT, but it’s just a knock off. Be wary of all emails. OpenSea is one of the largest marketplaces for buying and selling NFTs. A recent migration on the platform saw scammers sending out counterfeit emails so close to the original that experienced collectors were fooled into signing contracts allowing them to take control over their wallet.

5. Use a tumbler or cryptocurrency mixing service.

Obfuscation methods are the best way to avoid making your entire transaction history available to anyone you ever sent money to on Venmo. It’s perfectly legal, even though it feels like money laundering. Wired.com published an article on April 5, 2022 stating, “NFTs are a privacy and security nightmare,” and they were correct. Much like virtual private networks, tumblers and mixers take your identifiable data—in this case crypto and NFT transactions—and lump it together in such a way as to make the original source unidentifiable. They may also use randomized payout times so a transaction you made in the morning might actually be paid in smaller increments later that day as well as the next.

6. Beware geeks bearing gifts.

Ask the Trojans. “Free” doesn’t necessarily mean “good.” Sometimes scammers will enter chat rooms and change their names to that of a moderator, then tell you you’ve won something. All they want to do is talk over DM, they say. Just a private little conversation to “hook you up with no obligations” and all that. Next thing you know, you’re being sweet-talked out of your seed phrase to “verify that your wallet is actually yours” by which time, it won’t be.

7. Scammers act fast so when necessary, act faster!

Scammers don’t wait long to take action. So if you compromise yourself, then suddenly get that tingling feeling like you may have made a mistake, DON’T WAIT. Quickly, while you still have access to your wallet, move its contents to a safe, uncompromised wallet. Preferably, this will be a backup wallet you have waiting in the wings for just such an occasion.

8. Do Your Own Research.

DYOR is a common phrase of parlance in crypto and NFT spaces, and it means exactly what it says. Read up. Articles, listicles and op/eds abound in über-legitimate publications like Forbes, Insider, Buzzfeed, CNBC and more. Many of those pieces will end up the subject of discussion in communities you can also trust as an aggregation of reviews. Instagram, Twitter and Discord channels are gathering places of the published and unpublished masses of everyday experts. There is essentially a process of instant peer review.

I currently spend a good deal of time on Metabillionaire. Community Director Aezeean has created a space for thousands of users participating in a civilized cage fight of ideas. Go there to read or ask a question and chances are you’ll not only get what you need, but faster than you thought possible.

Participate long enough in such a forum and you can become a recognized expert yourself one day. When working with NFTs, you’ll want to know who the creator is. Can you access the contract? Does your NFT have any utility, or is it just art? Where exactly things are heading is not predetermined. Expert opinions will vary as much as those of the average crypto bro on the street, so always DYOR! Trust, but verify. Even commentators may have their own agendas, so it’s best not to follow the advice of any single source. When a scam is happening, you will see fellow NFT collectors on Twitter and in Discord working together to figure out what’s going on. Follow experts, verify information, ask for sources, follow community opinions, and investigate on your own. This is especially important for the next point.

9. Be aware of pump-and-dump schemes.

NFTs and crypto are the new frontier, and in many ways it’s the Wild West out here. Regulators aren’t sure what, if anything, to regulate yet so it’s open season on easy marks. Schemes to artificially increase or decrease the value of crypto and NFTs rely on skittish buyers and sellers ready to panic when prices drop. Buying low and selling high may be the American Way, but the success of these schemes depends on people falling for them. Don’t get scared and sell low. Don’t invest your nest egg unless you can ride out a bear market. Seeing that pump-and-dump scheme coming in the first place is your best defense.

10. Use double verification wherever possible.

This is your stuff! Take a few extra seconds to send yourself a text or email to make sure even you can’t get at it without proving who you are and who you claim to be.

Once again because it’s so important: No one ever legitimately needs to see your seed phrase but you! I recently googled “SushiSwap,” and a counterfeit-but-realistic paid ad popped up claiming it needed to verify that I was the holder of my MetaMask wallet. I just needed to enter my seed phrase to verify. It was realistic enough to fool an intermediate collector, and definitely a neophyte. Had a red alert not gone off in my head I would have lost everything like so many others. The smarter we get, the smarter and slicker these scammers get. So please DYOR (do your own research), double check everything, and when in doubt back out.

Moving forward, NFTs will become fundamental everyday tools across wide areas of our society. Our most sensitive data, medical records, citizenship documents, real estate transactions, and investments of all kinds will become a permanent, verifiable, inviolable part of the blockchain. Keeping your information in your possession is the primary point of all of this so a little vigilance will go a long way toward keeping yourself out of trouble.

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