crypt-oh-sh*t
Crypto, BTC, ETH, The Metaverse, NFTs, Web3, ICOs Blockchain, Air Drops, Tokens, FOMO, YOLO. When moon? 🚀
I just wanted to shed some light on what is going on with this crazy “other financial market”.
About a year ago, a Twitter pal of mine asked me for a recommendation. Which cryptocurrency should I buy? Altcoins, DeFi Tokens, or Bitcoins?
Here is the answer I gave him, based on some experience I’ve had firsthand with this stuff.
Should I buy cryptocurrency?
Sure, only if:
If you have EXTRA money to throw at the wall just to see if it sticks. The money you won’t need to increase your quality of life situation.
If you have more money than you have brains. And your friends all call you redonculous!
You won’t (but you will) obsess with the price, checking and refreshing your app 50 times a day at first.
Some say Bitcoin will be valued at $100k by next year.
Some people are idiots.
The first rule of Bitcoin Club…Don’t talk or publicly tweet about your holdings because - of hackers.
If you can HODL (HOLD - don't touch it for many years)
Only buy Bitcoin (Ethereum if you want to be a bit wild - but absolutely no other “altcoins” or “shitcoins”)
Some day, with your 12 words memorized, you can go anywhere in the world, then trade any amount of your Bitcoin for local currency using your smartphone.
No:
If you need that money in the next 5 years.
If you don’t want to go down an infinite rabbit hole to learn about this “magical fairy dust” called cryptocurrency.
If you like to play the crypto markets, buying, selling, and trading different cryptocurrencies like you would stocks (you WILL lose it all)
If you are vulnerable and naive and immature.
If the pain of loss overwhelms you.
If you have real responsibilities and others who depend on you.
If you worry about things, not in your control
A real-world use case is minimal at this moment unless you’re in El Salvador
If you are prone to lose things (like a piece of paper with your 12-word wallet seed phrase)
If you don’t like things to be hard to deal with
*MOST IMPORTANT WARNING: DO NOT LEAVE YOUR BITCOIN IN THE EXCHANGE YOU BOUGHT IT AT! (After purchasing: The best way to store bitcoin is to either use a hardware wallet, a multi-signature wallet, or a cold storage wallet. Have your wallet create a seed phrase, write it down on paper and store it in a safe place (or a couple of safe places, with backups). Ideally, your wallet should be backed by your own full node. "not your keys, not your coin”).
-YOLO (You Only Live Once)
My Twitter friend who got this exact advice ended up buying many thousands of dollars of a worthless pump and dump altcoin. He lost it all.
The following articles talk about the staggering losses in Crypto Currency related scams in the last few weeks:
new: The Petty Pleasures of Watching Crypto Profiteers Flounder
A Crypto Winter Is Setting In. Why the Outlook Is Different This Time.
Three Arrows Capital falls into liquidation after crypto crash
Did Razzlekhan and Dutch Pull Off History’s Biggest Crypto Heist?
FBI adds ‘Cryptoqueen’ to Ten Most Wanted Fugitives List after alleged $4 billion OneCoin fraud
Tether Commercial Paper Holding to Drop to $3.5 Billion by July 31
The Great Crypto Grift May Be Unwinding
DOJ Indicts 6 People in 4 Crypto Scams Including Baller Ape NFT Rug-Pull
Bitcoin Leads Crypto Fraud As FTC Confirms $1 Billion Milestone
The biggest crypto scams of 2022 (so far)
Inside the QAnon Crypto Scam That Cost People Millions and One Man His Life
Reports show scammers cashing in on the crypto craze
Gone Phishing: Cardano Ranks 3rd On List Of Most-Phished Crypto Projects
Hackers Steal 32 NFTs in new Compromise of Bored Ape Discord Server
Crypto Scams Hit $1 Billion Milestone Since 2021. Here's How to Protect Yourself
Crypto’s steep decline has investors worried. What do celebrity boosters say?
NFT scams
Web3 is going just great
5 Most Common NFT Scams to Watch Out For
How Do NFT Scams Work?
Most NFT fraudsters aim to get access to your NFT account. They do this by using a variety of phishing cons to get you to hand over your private wallet key. Once these scammers access your account, they’ll quickly drain it before you even get wind of the scam.
If scammers can’t get NFT holders’ login details, they’ll create a fake or worthless NFT project and prey upon people’s fear of missing out and the lure of a quick buck to make them invest. Once the NFT gathers steam and investments pour in, the fraudsters vanish with the funds.
Now that we understand how NFT scams work, let’s peel apart five of the most common ones.
1. Rug-Pull Scams
A rug-pull refers to a scam where developers hype an NFT but pull out after receiving substantial funds from investors. These crooked developers often use social media to build trust and fanfare around their NFT while waiting for investor funds to pour in. Then, they shut down the entire project and vanish with the funds as soon as they have enough.
A classic case of an NFT rug-pull scam is the Frosties NFT rug-pull operated by a pair of 20-year-olds, Ethan Nguyen and Andre Llacuna. They touted their NFT with several promises, including exclusive mint passes, giveaways and dibs on a metaverse game. However, they shut down their website and social media accounts after investors poured in over $1.3 million.
2. Phishing Scams
In general, hackers use phishing to access your NFT account details. To do this, they send out fake links, often through email or popular social media channels and forums like Twitter and Discord. Once you click the link and enter your details, hackers use keylogging or spyware to access your account and compromise it.
Unsurprisingly, NFT phishing scams are on the rise. For example, in February 2022, scammers made away with nearly $1.7 million worth of NFTs in a phishing attack targeted at OpenSea — the most popular NFT platform. OpenSea had asked users to update their contract details, but scammers copied the trading platform’s email and sent NFT owners links to fraudulent websites.
3. Bidding Scams
Bidding scams often happen in the secondary market when you try to sell your NFT. When you put your NFT up for sale, scammers place the highest bid and you’d naturally want to sell it to them. However, these scammers can change the cryptocurrency used for the bidding without your knowledge.
Imagine a fraudster bids 20 Ether for your NFT art. You’ll be expecting to receive around $9,000 (per the going rate at the time of writing). However, a crafty scammer can switch out the crypto to 50 Dogecoin, which is worth less than $5.
To avoid such scams, always double-check which crypto you’re being paid with and be sure not to accept anything less than the agreed-upon bidding offer.
4. Pump-and-Dump Schemes
In a pump-and-dump NFT scam, fraudsters artificially inflate the price of an NFT by misrepresentation and spreading misleading information. Once the price goes up, they “dump” the NFT and disappear without a trace, leaving investors with worthless assets.
Usually, fraudsters use social media and celebrity endorsements to build a frenzy around an NFT. In many cases, they pour money into the NFT, ramping up the price and making it difficult for investors to ignore.
5. Plagiarized NFTs
At the very core, NFTs are about creating unique digital tokens. Unfortunately, plagiarism runs rampant on many NFT platforms. Recently, OpenSea reported that over 80% of NFTs minted using its minting tool were fake. So the chances are high that you might be buying a stolen copy of a real-world artist’s work.
Unsurprisingly, your NFT’s value will tank as soon as it becomes clear that it’s fake. That’s why you should verify an NFT before making a purchase. Also, be sure to check the seller’s history and social media profiles to confirm if the art is original and belongs to them.
Less Common NFT Scams
There are other equally dangerous but less popular scams that can also cost you your NFTs. Let’s take a look at a few of them.
1. NFT Giveaways (Airdrop Scams)
Also known as airdrop scams, NFT giveaway scams occur when fraudsters ask you to promote an NFT and sign up on their website in exchange for a free NFT. Once you’re done, they’ll send you a link requiring you to enter your wallet details to receive the prize. These NFT scammers copy your account details and use them to access your NFT collection.
2. Investor Scams
Investor scams occur when fraudsters create legitimate NFT projects and tout them as worthwhile investments. However, in reality, the projects are worthless. After stockpiling enough investor funds, the fraudsters disappear without a trace.
One example is the Evil Ape investor scam. The anonymous NFT creator disappeared with 798 Ether (ETH) worth over $2.7 million, never to be heard from again. To avoid such scams, thoroughly research the NFT creator to ensure they’re trustworthy.
3. Customer Support Impersonation
This is a kind of phishing scam where fraudsters pose as customer support agents for an NFT marketplace. They’ll typically contact you through social media channels like Discord, Telegram or Twitter with an issue regarding your account. Then, under the guise of helping you, they’ll send over a link to fake NFT marketplaces that require you to enter your private wallet keys.
As a rule of thumb, only respond to customer support requests from your legitimate NFT marketplace and their approved channels. Contact your NFT marketplace’s official customer support channels if you’re in doubt.
Security Tips: How to Avoid NFT Scams
Now that you know the most common scams in the NFT space, below are some practical tips to help you outsmart even the most cunning of fraudsters.
Don’t click on suspicious links. You might end up giving your account details to a fraudster.
Never share your password or seed phrase. Also, enable two-factor authentication on your account to add an extra layer of protection.
Do your research before investing in an NFT. Always verify the NFT seller’s identity and history before making a purchase.
Use a virtual private network (VPN) to encrypt and anonymize your NFT traffic. We recommend ExpressVPN, the best VPN for NFTs. Read our ExpressVPN review.
Use a cold storage wallet to keep your digital assets offline.
Final Thoughts: The NFT space is plagued with an array of scams and you can lose all your digital assets if you don’t keep your eye on the ball. The most frequent scams include rug-pull, phishing, bidding, pump-and-dump schemes and counterfeit NFTs.
To avoid NFT scams, create strong passwords and enable two-factor authentication on your NFT accounts. Also, never share your seed phrase or click on suspicious links that require your private wallet keys. Use a VPN to encrypt and anonymize your NFT traffic.
Which NFT marketplaces do you use and how do you avoid scams? Have you ever been a victim of the cons we mentioned in this article? Share your thoughts with us in the comment section below, and as always, thanks for reading! (…source)
Thanks for reading! Peace.
This is a fantastic compendium of articles underscoring the utter bullshit that pervades cryto currency and related high tech and "more innovative" forms of capital.
A few thoughts:
1) How this reminds me of my past:
The first article, which delved into "block chain" real estate transactions, reminded me of a client I had, many years ago,, who alleged that a former business associate had stolen his computer program which was, supposedly, worth millions.
Whenever I asked him a question, he gave me a long, meandering answer which I could never understand. Why was his program worth so much? Because it had utilized .... It all sounded like gobleygook. I was fairly new at the practice of law and I thought my inability to understand his brilliant ideas was the consequence of my ignorance of high tech, which was, according to Gordon, my client, akin to something like the second coming of Jesus.
I spent a year slaving for that bastard. Finally, I found out that he could not read the program in which the allegedly stolen code had been written. My client, who had alleged fraud and theft, was the fraudster. After all, if he wrote the computer code, he would have been able to read that computer code's language.
In this article, we are shown a clip in which a bunch of hypertalkative yuppies shoot the shit about "block chain" real estate transactions. Like my ex client, they keep talking AROUND THE ISSUE. They never even bother to define a "block chain" real estate transactions.
2) The world of crypto seems like this:
You have rendered a service. You want to get paid. The guy who is supposed to pay you says, "You don't want to get conventional money. Money is so passe and common. Isn't really cool to get a hundred buckets of shit instead of one hundred dollars."
Why is phony money supposed to be better than real money.
3) I think we have seen versions of this throughout human history. By "this" I mean the tendency to select imaginary alternatives to the real thing. Examples:
A) the fable of the king's new clothes;
B) Idolatry, the belief that a statuette, composed of wood or stone, somehow constitutes the divine
C( Alchemy, the medieval belief that one can make gold by tinkering with various types of metallic junk
I like the idea of Web3/Crypto/Smart contracts--especially the way they could potentially benefit creators, but I haven't seen a valid use case yet. BitClout, er, DESO looked great for a minute and had a really cool pioneer energy coursing through it. But dev indifference and anemic DAU numbers have left it as a sort of 2022 MySpace ghost town.