NFT educational series – Part 2
Now that you have the basic understanding of NFT in Part 1, you’re probably getting more intrigued to own your first NFT (if you missed the free C21 Premium Pass NFT).
Investing in NFTs is an exciting new frontier for investors… especially you hear news like…
The most expensive NFT sold by a living artist was Pak's 'The Merge' at $91.8m.
The “Everydays” NFT sold for $69 million.
Ordinary people are flipping their NFTs overnight and making 10X, 20X or more from their investments.
But before you jump into investing in NFTs, there are risks to consider first, especially if you’re totally new to NFT.
So, let’s dive into some tips to mitigate the risk…
1. Do your due diligence.
Whenever you're considering to invest in any new frontier, it's important to do your due diligence and learn as much as possible about the risks involved.
With blockchain-based technologies like NFTs, one of the biggest risks is the potential for a hack. So make sure you only invest in projects that have a strong security protocol in place.
You should also be alert of :
- Fake marketplaces (ensure you check the url, be alert, and don’t rush to click on links sent by others)
- Fake sellers
- Unverified sellers
2. Only invest money that you can afford to lose.
Investing in risky assets, such as NFTs or cryptocurrency can be very beneficial if done correctly. But you must always remember that there is a risk involved and never put more money into an investment than what you're willing to lose.
3. Store your NFTs in a secure wallet.
The safest place to store your NFTs is in a cold-storage hardware wallet like Ledger or Trezor. This device is protected by a seed phrase, a password, touch authentication and remains offline.
This means hackers cannot gain access the way they would if you had stored it online software wallets such as Metamask that allow users' actions on websites through their browsers.
Very Important note: Never ever share your private key, your secret recovery phrase, your seed phrase, or any similar kind of private information with anyone.
4. Avoid scams in the Marketplace.
NFTs can be traded on a number of exchanges, such as OpenSea, Rarible, and Waxpeer. Before trading, make sure to do your research and understand the risks involved in each exchange.
OpenSea is the largest NFT marketplace by far, making it a great place to discover cool art and collectibles. However, it also made it easy for scammers to create fake collections and try to steal your money.
So ensure you avoid scam collections. And these scammers sometimes may transfer NFTs to your hidden folder in OpenSea. Just ignore them, except for C21 Premium Pass NFT.
5. Be careful when buying NFTs from unknown sellers.
There have been a number of scams involving FAKE NFTs, so it's important to only buy from reputable sources.
If you're looking into buying a more expensive NFT, check that the seller is verified first. And you can check the unique properties of the NFT you're interested in. Fake NFTs won't have any properties listed, while real NFTs will.
5. Discords
The popular communication platform for NFTs’ communities is Discord. Before you join the community in Discord, try accessing it via the NFT creator's official website or social media first.
Next, you should also check how many followers the server has if you can't access it this way, as it's unlikely a fake server will have thousands of followers.
Also, beware of fake customer service servers, especially in Discord. These scammers can ask you for sensitive information in order to 'fix' whatever problem you may be having.
6. Giveaway scams
Social media accounts (especially Twitter) and Discord servers can host fake giveaways to trick users into claiming the giveaways.
With this particular scam, fake NFT accounts will message users offering to giveaway an item.
This fake NFT account will then give the user a link to a fake NFT website, which will ask them to connect their crypto wallet and enter their seed phrase.
When the scammer gets a hold of this phrase, it's game over! This phrase, or password, will give them immediate access to your wallet -- where they can drain all your funds.
So, NEVER click on any random links sent to you on social media. You need to check their social media account that sent you the message to see if it's legitimate.
With the right precautions, NFTs can be a safe and enjoyable way to invest in virtual assets.
Ultimately, NFTs may become the underlying asset for the whole virtual economy, expanding far beyond just digital art and collectibles.
And I’ll cover more of that when I touch on the benefits of NFTs next week!
So stay tuned!
Btw, two actions for you to take:
1. When you’re in the NFT world, you may hear funny terms like airdrop, mint, etc… You can google this site to get an understanding of the meaning of NFT terms.
<insert link https://techmoneyculture.com/23-nft-terms-you-need-to-know/>
2. Join our Telegram community for news, giveaways, insights from experts about this revolutionary new virtual world as it evolves before your eyes, and more exciting activities to be announced in Telegram.
Click HERE to be part of Consortium 21 community!
Disclaimer: The information provided in this article is not investment advice – it is provided for educational purposes only. By using this, you agree that the information does not constitute any investment or financial instructions. Do conduct your own research and reach out to financial advisors before making any investment decisions.