Are NFTs Safe?
Are NFTs Safe?
NFT Security and How to Avoid NFT Scams
Non-fungible tokens (NFTs) have become all the rage. As a way to possess a digital asset — such as a piece of art or a sports card — NFTs provide ownership authentication. This technology also adds a layer of value to virtual assets, like artwork, by making the virtual object unique and giving the item a certain cyber-provenance.
A digital piece could be worth a couple of dollars or be appraised for tens of thousands — or more. It all depends. The monetary value that an NFT provides varies by the artist, the work, and the number of available NFT-branded duplicates that exist. Whatever the value, the piece would be virtually worthless without adding an NFT.
Are NFT’s safe?
NFTs are one of the safest, most secure technologies on the internet today. The encryption process that NFTs employ is practically invulnerable to conventional hacking and is so potent that even supercomputers would take decades to crack the code to infiltrate.
However, as with anything that requires security, your NFTs are only as safe as you are. You could live in a virtually impenetrable fortress, but if you leave the front door unlocked and the security system isn't on, it's as vulnerable as any other run-of-the-mill house.
The same is true with cybersecurity and with NFTs. Using strong passwords, and not sharing them with anyone is the best first line of defense. While NFTs may be uncrackable, they're only safe if nobody else can get to them.
DraftKings NFTs are much more secure, because the Marketplace platform ensures that only verified and known users are able to purchase and trade digital assets available on the site.
How does NFT technology work?
NFTs employ blockchain technology— the same technology behind cryptocurrencies like bitcoin. An NFT is essentially a unique block of code that can never be modified, duplicated, or deleted. This unique block of code then represents an item, much like the title to a car represents the individual vehicle.
NFTs exist in digital wallets on a network — called an NFT gateway — that keeps track of which wallet possesses which NFT. If someone sells an NFT, that unique bit of computer code transfers to the buyer's wallet and removes itself from the seller's. It can never exist in both places at the same time.
Avoiding NFT scams
As with anything new to the marketplace, the potential for fraud and scams exists. It's a sad truth, but some people keep a lookout for easy targets, either to sell them counterfeit NFT items or to try to separate people from their valuable NFTs. If you're looking to purchase NFTs or own an NFT you want to sell, keep an eye open for people who want to make a fast buck. Read on to see what an NFT scam is and learn how to avoid them.
NFT Phishing scams
Phishing schemes & scams are one of the most successful mechanisms for gaining illegal access to people's accounts. Scammers send out emails indicating there's a problem with your NFT network's account or you need to update information at your NFT gateway. These emails contain links to a site’s login page that look like your NFT gateway. Once you enter your username and password, the scammers have all the information they need to get into your account.
The best way to combat a phishing scam is to set up two-factor authentication for your NFT gateway. By requiring a second method to gain access to the legitimate site, scammers won't be able to get past the site's login page.
NFT Bidding Scams
Bidding scams occur when a seller puts an NFT item up for auction on the marketplace. A scammer will come in with a high bid to win the NFT but change the cryptocurrency to a much less valuable form before paying. For instance, a buyer might bid two bitcoin for a piece of NFT art — which could be worth a few thousand dollars, depending on the currently traded price. When they finalize the purchase, they change the currency type to Dogecoin, two of which would be worth less than 20 cents.
The best way to avoid bidding scams is to make sure the agreed-upon currency form is locked in before initiating the transfer to the buyer. The precise methods for performing transactions depend on which gateway you use.
Counterfeit NFT scams
Scammers will often plagiarize a piece of artwork or other digital asset and mint an NFT for their illegitimate copy. One platform discovered that 80 percent of the NFTs minted by their service were used for property counterfeiting purposes.
If you want to ensure whether or not an NFT is a scam, thoroughly research the seller. Look up their social media profile and run a Google search on them. Most importantly, verify the actual NFT before considering a purchase. If you own a counterfeited NFT asset, the value will plummet the moment someone attempts to verify its authenticity.
NFT art finance scams
Also called a "rug-pull,” the scammer poses as an NFT producer. They seek out investment for their project, with the promise of specialty items, giveaways, and other tempting attractions. Once they've acquired a satisfactory amount of funds, the scammers close shop and disappear into the ether, taking their ill-gotten cryptocurrency with them and leaving the investors with nothing to show for their contribution.
The best way to avoid these scams is to research the NFT creator. If there's no information available about the creator or they have a shady track record, avoid even the consideration of investing.
How to verify NFTs
Each NFT gateway offers tools for tracking and verifying NFT assets housed in their environment. For example, Ethereum — one of the largest NFT gateways — has etherscan.io, which allows you to search by several criteria, including address, transaction hash, block, and token.
When looking into an NFT, first find out what NFT platform houses the asset — whether Hive, Etherium, OpenSea, or another system. Use the verification tools they provide and follow their prompts and instructions. Any legitimate NFT marketplace should give you a way to verify the authenticity of any NFTs available on that platform.
Couldn't someone just download your image and call it their own?
Someone can download a copy of a digital NFT asset and call it their own. Likewise, it's pretty easy to take a screenshot of the NFT. This isn't a crime in and of itself. The trouble occurs when someone copies an image and attempts to pass it off as their own, especially when they try to sell it.
NFTs serve as a sort of digital watermark, unique and inherent to the asset they're imprinted on. They're built on a blockchain, which means that an NFT records all activity related to it. When someone buys or sells an item or posts it on the internet, the NFT records these events, and anyone can look into the entire history of the asset at any time. So, even if someone can capture a copy of the actual image, it's effectively worthless because their copy doesn’t contain the NFT imprint of the original item.
Can you make money safely with NFTs?
NFTs are a hot commodity these days. If you're a visual artist or video content creator, you have the potential to lock it with an NFT and sell your creations. Likewise, patience and some savvy can get you far if you're an investor or broker — looking to buy and sell NFTs for profit. If you're just getting into the NFT game, it's possible to earn some virtual coin safely and securely, but you need to approach the practice with informed caution.
Learn the tactics scammers use to manipulate creators, traders, and investors. The internet is jam-packed with tons of tips and tricks to spot and avoid scams. Along with the advice on scammers above in this article, there should be sufficient advice to help you stay safe.
Keep an eye out for signs of fraud with every transaction. Don’t be too trusting unless you’ve dealt with the other party before or know them well in real life. Research everyone you do business with before closing any transactions, and pull out if you find any hint of unethical dealings.
Making money with NFTs
With most NFT’s, creating your own or selling them for more than what you paid is the only way to make money. But, you're able to make your NFTs profitable in two main ways on DraftKings.
Flipping NFTs for profit by buying low and selling for more than you paid is possible and can be fun. DraftKings' secondary market allows you to post certain digital assets for sale, and you can set your price or minimum bid. Keep in mind that some supplier contracts don't allow secondary resale of NFTs. Resale restrictions are indicated in the Marketplace detail page or the bid confirmation summary when purchasing.
The Reignmakers gamified NFT platform offers a way to turn those digital assets into an exciting contest that lets you win fun prizes — including cash. With Reignmakers, you're also able to sell your digital cards on the DraftKings secondary market. If you have a winning player that you're willing to part with, selling their card might score you a tidy profit.
DraftKings NFT Safety
The bottom line with NFTs is to educate yourself as much as possible before hopping into the game. Always deal with reputable NFT dealers and gateways, and research everyone you do business with before pulling the trigger on any transaction. Though NFTs are safe and secure digital items, you are the first line of defense against scams and fraud.
DraftKings takes your NFT security seriously. That's why all transactions are held through the platform and only with verified DraftKing account holders.
Commitment to security/safety
DraftKings takes the security and safety of your NFTs very seriously. We provide a secure marketplace to buy NFT assets. Each token is verified authentic and can't be duplicated or hacked.
How to buy an NFT on DraftKings Marketplace
It's easy to purchase NFTs right when they drop on the DraftKings Marketplace. If you don't already have an account, creating one is easy. Once you have an account, you only need to search the DraftKings Marketplace for the item you want. See our associated article for more in-depth information on how and where to sell NFTs.