Prior to last month, NFT's and NFT scams weren't something that was on my radar. I had a vague idea what NFT's were, but that's about it, until one day I got a DM on Instagram from someone that had started following me. They sent me a message and said they wanted to buy some of my art as NFT's. So, before I replied to them I decided I needed to know exactly what they were asking for.
What are NFT's
There are a ton of posts you can read all about NFT's, and I'm no expert, so I'll just give you the quick rundown.
A NFT or "non-fungable token" is something that is unique and can't be replaced. Think of NFT's as something like a trading card. Trading cards have value but they aren't actual currency. You convert that value into currency when you sell them. An NFT doesn't really exist physically, its a digital representation of a work of art that's recorded on a blockchain. WTF is a blockchain you ask? It's basically a digital database, like a public ledger, with information stored across a network of computers. The transactions are recorded in blocks and time stamped.
How do you make an NFT?
It's actually pretty easy to make an NFT but it's not free. There can be listing fees, gas fees generation fees, commission fees, and transaction fees when you create an NFT and these fees vary by marketplace. If you decide to create an NFT you have 2 options (assuming you haven't been approached by someone wanting to buy your work as an NFT):
Create the NFT on a NFT market place and pay the fees, then auction the NFT and hope someone buys it
Create the NFT for free and then pass the fees on to the buyer
So, imagine I decide to turn one of my paintings into an NFT. First I need a digital copy of my painting. (Usually NFT's are created from digital art, rather than physical art made into a digital copy). I then upload the digital file to an NFT marketplace and "mint" it, which means I register it on a blockchain. Why would you pay to mint a file when you can just upload a digital file and sell it without paying fees? Basically, minting a digital file provides proof of ownership and shows where the file originated and who has owned it since then. Going back to our trading card example, we know that the rarer a card is, the more it's worth. Minting the NFT is like verifying that the signature on a trading card is real and that it is one of a kind (which adds to it's value).
Why Did I Think it was a Scam?
My gut feeling after I was messaged on Instagram was that the situation was too good to be true. Even before I did any research I felt like something was off. When I looked into things further I found that:
The person that approached me had a relatively new Instagram account and not many posts and no comments on the posts
I couldn't find any information about them or any company they were associated with, despite them telling me they bought and sold art NFT's for many people/companies
They were offering quite a bit of money, and although people will pay absurd amounts of money for NFT's, I'm not a well known artist - it just seemed odd
When I mentioned not having digital files of the art at the moment, they said I could make a clear picture of the selected ones and that all I had to do was signup for an account at an NFT marketplace (and they shared the link)
Having had digital security courses compulsory at my job, I never click on a link from someone I don't know so I Googled the name of the company in the link instead. This is where the other red flags popped up:
This was an NFT marketplace I had never heard of before
I couldn't find a place on the site where it gave information about the company or any fees associated with creating an NFT
I did a search for information about the company, reviews of the company etc. and couldn't find ANY information on it
I checked the companies they listed as having reviewed their services and found no mention of them
After my initial search I sent the link to my brother and my sister in law and asked them for their thoughts. They agreed it looked phishy, so ultimately I decided not to go ahead and create an NFT. To be fair I don't actually know that it was a scam, but the whole situation made me curious about what kinds of NFT scams are out there and how to recognize when you're being scammed.
Types of NFT Scams
Most NFT scams involve scamming buyers - but since this post is about being scammed as an artist, I'm only going to touch on the ways someone can scam you as the seller.
One of the more common scams (and what I suspect was happing in my situation) is to get access to your digital wallet . There are several ways they can do this and I won't get into them here, but in this case I'm pretty sure it was a phishing scam. I imagine if I had clicked on the link that I was sent, the website I was directed to may have request my private wallet keys when I signed up for an account, and then they would have access to my digital wallet.
How to Protect Yourself from NFT Scams
If Someone Approaches you to Buy Your Art as An NFT:
Do your research: Research the NFT buyer and any website or marketplace they direct you to
Can you find any reviews of the buyer or their transaction history?
Never open files or links from senders you don't know
Never share our private key or seed phrase to your crypto walled with anyone
Use a reputable NFT exchange market to create your NFT
And most important of all - trust your gut feeling
Other Issues with NFT's for Artists to Watch For
Art fraud is another issue that you may encounter in the world of NFT's. If your art is publicly viewable, it's not difficult for someone to create an NFT of your work and sell it without your permission. It's as easy as taking a screenshot of your work and minting it. Unfortunately there aren't many ways to keep someone from stealing a screenshot of work from your social media accounts unless you don't post anything, or you add a watermark to every image.
With the rise in popularity of NFT's comes a rise in the scams you could become a target of.
Have you ever been approached by someone wanting to sell your art as an NFT? What was your experience? Let me know in the comments!
Comments