Non-fungible tokens (NFTs) are digital assets on the blockchain. There are many types of NFTs; they can be art, music, photography, images, memes, or virtual fashion and are registered on the blockchain to guarantee payments to their rightful owners through royalties.
The NFT industry has snowballed over the past couple of years, going from $82.5 million in value in 2020 to a whopping$17 billionin 2021, and is forecasted to increase to over$80 billionby the end of 2025. However, as the NFT industry grows, so does the number of NFT scams.
In 2021 alone, cybercriminals in the crypto space stole$14 billionthrough various NFT scams. With such high prices of NFTs and significant investments on the line, one has to make sure to avoid them. The first step is understanding what they are and how each NFT scam works.
What is an example of a nft
What is the difference between NFT and Cryptocurrency?
Even though NFT and cryptocurrencies are based on the same technology and use the same principle. But, there is a huge difference between both the technologies and items.
Cryptocurrency is like any other currency in the world. It has value, and it is fungible. This means within the particular cryptocurrency, and it doesn’t matter which crypto token you have, it has the same value as the next one.
For example, your $1 bill is equal in value to anyone else’s $1 bill.
On the other hand, each NFT is unique. Each NFT has its own value, and if another NFT is doing very well, then no one can share your NFT will increase in its value. For example, you invested $100 in one NFT. And now, no one else is looking to buy that NFT.
It’s charged around 2.5% Commission on every transaction, and the creator gets a royalty of 5 to 10%.
NBA Top Shot
NBA top shot is one of the most popular marketplaces among sports enthusiasts. The platform allows fans to trade digital moments from the NBA. For example, you are watching a live NBA match and capture some player making a horrible shot or one of the classical shorts, which you can mint it on and we’re top shot and sell it.
Should You Buy NFT?
You have learned nearly everything about NFT.
Now it is time to learn about whether you should buy it or not. Is it going to be a profitable investment like cryptocurrencies or stocks or not? These are the few questions that everyone is asking these days.
Kindly remember even if you buy NFT, you will not possess anything physically. Every artwork is going to be in digital format.
- Grimes WarNymph
Know more: How NFTs Create Value
Singer-songwriter Grimes made $5.8 million selling a collection of 10 NFTs. The highest-selling asset was a one-a-kind video called “Death of the Old” that sold for $389,000.
- Nyan Cat
A crypto art rendition of the beloved GIF Nyan Cat meme sold for $590,000 in an online auction, in a first foray into NFTs for creator Chris Torres.
“I’m very surprised with the success, but I think I’m most glad knowing that I’ve basically opened the door to a whole new meme economy in the crypto world,” Torres said.
- Glenfiddich whisky
Distillers William Grant and Son recently sold 15 bottles of 46-year-old Glenfiddich whisky for $18,000 a piece, and each one was accompanied by its own NFT artistic impression of the bottle.
The Argentinian designer Andrés Reisinger found an exclusive niche for his creative output—he sells furniture NFTs. His most expensive piece was sold for little under $70,000. While this is furniture you can’t use physically, these objects can be placed in open worlds like the above-mentioned Decentraland or Minecraft.
12 RTFKT’s digital sneakers
RTFKT is making big waves in fashion.
Even though the people that buy his NFT sneakers won’t ever be able to wear them, they’re still willing to pay upwards of $10,000 for a pair.
In the March of 2021, RTFKT has sold a series of sneakers that he made with another artist called Fewocious—they managed to collect $3,1 million in sales in a matter of minutes.
Let’s take a look.
What Is An NFT?
What is an NFT – NFT, also known as a Non-Fungible Token, is an entry on the blockchain, which is the same decentralized digital Ledger technology that underlies Bitcoin and other cryptocurrencies.
Every piece of NFT is unique and of kind things. One of the biggest problems was marking the original copy of any digital file. For example, if you took a photo of something and put it on the Internet, now everyone is claiming it’s theirs.
On the other hand, if you put that same photo on the blockchain, then your picture will be marked as the original.
Apart from that, you can easily sell these digital assets.
The early examples of the two most popular NFTs were crypto punks and crypto kitties. Nowadays, cryptocurrency sells for around 100,000 U.S.
Since then, the technology and potential use cases have become far more sophisticated.
After a few developments and interesting innovations, it wasn’t until 2016, when memes began to enter the blockchain world, that NFTs started to gain traction. Rare Pepes quickly became an internet sensation, and users began to trade them amongst each other using NFT technology in the process. At the tail end of 2021, one of these memes fetched $500k in a sale on NFT marketplace, OpenSea.
In 2017, John Watkinson and Matt Hall, the creators of Larva Labs, created unique characters generated on the Ethereum blockchain.
They created 10,000 unique characters in a series called CryptoPunks, and they quickly became a smash hit with digital art collectors. CryptoPunk #7523 seemed to gather a ton of interest, selling for a staggering $11.75 million for one reason or another.
Here are some examples of NFTs that exist today, to help you get the idea:
- A unique digital artwork
- A unique sneaker in a limited-run fashion line
- An in-game item
- An essay
- A digital collectible
- A domain name
- A ticket that gives you access to an event or a coupon
We use NFTs to give back to our contributors and we’ve even got our own NFT domain name.
POAPs (Proof of attendance protocol)
If you contribute to ethereum.org, you can claim a POAP NFT. These are collectibles that prove you participated in an event. Some crypto meetups have used POAPs as a form of ticket to their events.
More on contributing.
This website has an alternative domain name powered by NFTs, ethereum.eth.
You can easily check who is the original artist of that digital asset as it is available on open-source blockchain technology.
NFT also has a few cons associated with it. Let’s take a look at a few of the majors at once.
- NFT runs on emotions, and they are not one of the safest investment options.
- Even though the technology claims that no one can counterfeit digital assets, we all know it is very easy to create a copy of original content.
If years ago, if anyone had told you there is going to be something called NFT and it is going to be a huge success, you might think that person is crazy.
But, blockchain technology has made everything like that possible.
In another rug pull scheme, the US government charged the two men – Ethan Nguyen and Andre Llacuna, for fraud and money laundering. They were involved in an NFT rug pull scam thatdefrauded investors from nearly $1.1 million. By selling NFTs in a project called “Frosties,” the pair transferred the funds to different crypto wallets and shut down the project, disappearing with the investments.
NFT phishing scam
NFT phishing scam is like any other phishing attack, where cybercriminals gain access to other people’s possessions by illegally obtaining their security details. With these stolen passwords, hackers gain access to theircrypto wallets or exchangeaccounts and steal their funds and NFTs.
It can happen in various ways.
For example,Ethereum Name Servicehas become a popular way to store all of your addresses and receive any cryptocurrency, token, or NFT. ENS is the most widely integrated blockchain naming standard. You can launch censorship-resistant decentralized websites with ENS.
You will even see NFTs in footwear.The Xis more of an artwork than something you would wear, however.
The outside of the sneaker features an evolving AI painting.
NFTs in Gaming
There have been digital add-ons in games for years, but they have tended to be localized to individual development companies. However, we are now seeing an increase in NFTs in gaming. For example, Steam has aCommunity Marketwhere members can sell items to each other for Steam Wallet funds.
Let’s take a closer look at 21 examples of NFTs and what makes them unique.
🎁 NFT Giveaway
We’re launching our NFT collection soon. Here’s how you get one for FREE:
Fill the form and join the waitlist 😀
(reload the page if you can’t see the form)
1. Beeple’s “Everydays: The First 5000 Days”
This work is an important milestone for visual artists around the world—it’s the first purely NFT digital artwork that has been auctioned at a major auction house (at an eye-watering $69 million).
2. William Shatner’s personal memorabilia
William Shatner is a famous actor whose career spans more than 60 years. In 2020, he released a series of his personal memorabilia in the form of NFTs that features a wide array of photographs made throughout his fruitful career. He sold 125,000 units in 9 minutes.