Keep your eyes open when buying NFT: Cyber ​​attacks, fake NFTs & Co .: These are the dangers of buying NFT | news

• NFTs are popular all over the world
• Blockchain technology is not immune to hacking
Fake NFTs in circulation

The NFT company is booming. While non-fungible tokens were still an exception two years ago, digital authentication providers are now emerging like mushrooms. Big companies like Disney, adidas & Co. have also jumped on the bandwagon and launched their own NFT collections – with great success.

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The digital collectibles are no longer just in demand as unusual virtual art objects, many investors hope to make a lucrative business of trading non-fungible tokens. No wonder, after all, there are now numerous digital goods that have been sold at record prices. For example, the first source code for the Internet, which changed hands in 2021 for several million dollars.

Risks of NFT trading

However, there are also some risks associated with NFT trading that those interested should be aware of. Because as is so often the case when new hype pops up, the scammers are not far away. After all, there is a lot of money at stake in the NFT market. But the danger of hacking should not be underestimated either.

Possible hacker attacks

NFTs are based on blockchain technology. Buying and selling digital objects is handled using smart contracts. However, these crypto technologies are not immune to cyber attacks, and hackers have repeatedly stolen millions of dollars from attacks on crypto companies. For example, in August 2021, when Poly Network fell victim to cybercriminals, $ 600 million in cryptocurrencies was stolen. The reason was the insufficient security in Smart Contracts, weaknesses in the system could be exploited here, as Geekflare writes. So investors who want to be active in the NFT market should be aware that there is no 100 percent protection against hacker attacks.

NFT prices volatile

Another source of risk with NFTs lies in the pricing of the digital goods. There is no industry standard for pricing non-fungible tokens, there are various factors that contribute to whether people are willing to pay more or less for an NFT. It can play a role which artist has created the NFT, how unique and creative the collectible is, or how rare the non-fungible token is. There can be big fluctuations in prices and there can be big changes even in a very short time. It is therefore very difficult to determine the value of an NFT.

Unfortunately, some providers also take advantage of this phenomenon in so-called laundry trade. A provider uses several accounts, which he repeatedly buys and sells his own digital goods with in order to artificially increase the NFT price. This is possible because platforms that enable NFT trading often do not place high demands on user registration.

Fake NFTs and NFT theft

In addition, investors should be aware that there are always cases of fraud with fake NFTs on crypto platforms. Because anyone who knows how to do so can create a non-fungible token, the authenticity of the NFT is not independently verified by anyone. There are cases where unauthorized copies of NFTs are made and in return sold. Retailers often make NFTs based on content they do not even own. So artists get robbed and the designs they come up with make big money on NFT platforms.

So if you want to acquire a non-fungible token, you can hardly avoid thorough research. The history of the dealer should be carefully checked. If a deal seems too good to be true, it probably is.

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Image sources: archy13 / Shutterstock.com, Sergei Elagin / Shutterstock.com

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