2022 is expected to be the year of non-fungible tokens (NFTs). At $40 billion, the global market capitalization for NFTs is inching closer to the entire global art market cap of $50 billion. However, one of the potentially largest markets for NFTs – India – is facing teething troubles.

Indian experiments with NFTs have grown rapidly in the last eight months or so. In June 2021, WazirX, India’s largest cryptocurrency exchange, launched an NFT marketplace predominantly for Indian artists. In the time since, multiple Bollywood celebrities and sports stars have launched NFTs. The largest global NFT sale to date, the $69 million Beeple sale, was incidentally also purchased by a buyer of Indian origin, Vignesh Sundaresan, also known as MetaKovan. But oddly enough, Indians have not started buying into NFTs just yet.

The supply and demand gap

There is a fairly large supply and demand gap in the Indian NFT market. NFT creators here are proliferating while collectors remain nonexistent. Both sides paint a different picture of how they see the NFT opportunity in India.

From the creator perspective, opportunity abounds. The talent landscape for art and digital art in India is vibrant – from graphic designers and illustrators, to specialized visual effects (VFX) artists working for Hollywood and Bollywood, to a rich traditional art heritage spanning many diverse styles. The young and savvy have already taken to the NFT space and the numbers are growing. WazirX has an active Indian creator community of 1,300 artists and has a waitlist of 20,000 artists waiting to be onboarded into the marketplace.

SamosaRani is one such successful creator with over 18 NFT sales and three collections under her belt across OpenSea and other markets. An art therapist and artist for two decades, she has found a great niche for her art in the NFT space. However, none of her dedicated collectors are Indian, and only a small fraction of her one-off buyers are from India. « Finding collectors is a difficult task for most Indian artists, » she told me.

Read more: India Edges Toward Crypto Legalization With 30% Tax, Announces Digital Rupee

Interestingly, Indian NFT creators have migrated into becoming NFT collectors and traders. CreatiWitty, a top performer on the Kalamint platform, started off as a creator but now spends 100% of his time flipping NFTs. His story is the kind that motivates many artists across the country to enter the NFT space. He used to be a freelance graphic designer in a small town in the Indian state of Gujarat, designing logos and branding for companies. “It used to take me three days to design logos with customers complaining and constantly needing changes. Now, in a matter of minutes, I can flip an NFT and earn two times, three times what I used to make with three days of effort,” he said in an interview.

From a mass adoption perspective, however, NFT collectibles are not quite finding a product market fit in India. A limited set of Indian collectors leverage NFTs for speculative uses. This small Indian collector community cites a preference for high liquidity NFTs, with PFP (photo for profile) art and photos as the best performing categories.

Sandeep Sangli, the founder of NFT platform Kalamint said: “Historically Indians have not been collectors. Art is something Indians haven’t really warmed up to as an asset class. For NFTs to work in India they need to have utility.”

Indeed, different players in the market are coming to terms with the real value in India being for utility-based NFTs. Sangli said one of the higher performing segments in Kalamint is for brands and entrepreneurs to cross promote and sell NFTs that can be redeemed on their site for goods. WazirX experimented selling NFT tickets for a music festival in its marketplace. These sold out in record time.

Enter Bollywood

It is not for lack of trying that NFT collectibles have not taken off. Bollywood and cricket are two rich cultural categories, and it was only natural that celebrities in both spheres gravitated towards NFTs. Between June and December 2021, several movie stars and cricket players released NFTs. But these launches saw a relatively lukewarm response.

Amitabh Bachhan, Bollywood’s biggest superstar, affectionately known as “Big B,” launched an NFT collection with several thoughtful collectibles, including poem readings and even a Big B CryptoPunk. The entire collection sold for just under $1 million. While this is not bad, it does not compare to big ticket NFT sales we have seen around the world, especially given that Big B is India’s biggest superstar by a mile with cross-generational appeal. Single CryptoPunks (the original must-have NFTs) have sold for many multiples of this, from $3 million to $12 million. The sale also pales in comparison to NFTs by other celebrities. Mila Kunis’ Stoner Cats collection, which gave access for a series that has not even launched, pulled an easy $8 million.

Celebrities are now expanding beyond pure NFTs into full metaverse plays. One of the first to experiment deeply with this has been Bollywood star Kunal Kapoor who is now building out the LoveABot/LABverse project. “I wanted to do something to change the narrative around the tech dystopia and a tech-driven future that we fear,” he told me. He is on a mission to build a creative metaverse for technologists where a tech-positive narrative can be created.

Another actor, Rana Daggubati, of the iconic “Baahubali” movie franchise, is venturing into an ambitious Indian metaverse, with the Ikonz project. CEO Abhinav Kalidindi believes that “we need to drive a change in mindset, but with it, India would be one of the largest metaverse and NFT markets in the world.”

Read more: India’s Millennials Embrace Digital Gold Despite Proposed Bitcoin Ban

It has placed a bet on a unique metaverse with Indian characteristics, having secured IP rights to the “Baahubali” franchise, as well as widely read and loved Indian comic brands, “Tinkle” and “Amar Chitra Katha.” But in line with experience from other Indian projects, Kalidindi said “building NFTs with utility at value-conscious price for Indians” will be key to their success.

Name of the game

With this backdrop to India’s budding NFT sector, all stakeholders are now looking to India’s gaming sector for that ultimate product market fit with NFTs. India’s gaming sector has exploded in the last year, recording 170% growth between 2020 and 2021 alone, and the market is expected to triple by 2025. With over 450 million gamers, industry players are betting this will create the right growth market for NFTs.

Indian creators and collectors have started looking into gaming NFTs. Some interviewees have already started experimenting with gaming skins and related NFTs. They often presell NFTs that will be used in games as a form of fundraising. “With enough hype around these games, we see a lot of collectors buying ahead and flipping these NFTs,” said Kalamint’s Sangli. He believes a gaming and content utility might be the most preferred by Indians.

Ikonz’s Kalidindi put it accurately when he said, “NFT collectibles may have value globally but not for Indians. Crypto gaming is massive and in India play-to-earn games do really well. This is where India might find the right product market fit for NFTs.”

As experimentation in the country accelerates, it will be interesting to see how Indian attitudes to NFTs evolve.

The Diem Association will wind down its operations in the coming weeks after selling its assets to Silvergate Bank. It’s time to revisit the chief legacy it leaves behind: A more involved regulatory framework than it may have intended.

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Bonum noctis

The narrative

The Facebook-backed Diem Association is shutting down operations, just two and a half years after it was revealed to the world as Libra.

Why it matters

We’re talking about Diem again, not because it is interesting – I’m not saying it isn’t,  that’s just not the point of today’s newsletter – but because the regulations that will potentially be implemented as a result of this project are fascinating to think about.

Breaking it down

Where do I even start?

Diem, formerly known as Libra, has reached an untimely end. It announced last night that it will begin unwinding its businesses days after various news outlets reported that it was in talks with Silvergate Bank to sell off its assets and technology to repay investors. Silvergate confirmed the deal last night.

Under the terms of the deal, Silvergate paid $50 million in cash and gave another $132 million in Class A shares, which Diem will use to repay investors. In turn, Silvergate will get all of Diem’s intellectual property and technology tooling, which it will use to help launch a stablecoin by the end of the year.

I wrote a complete timeline documenting Diem’s history back in April 2020, and it’s updated through this week’s news. You can read it here.

For a project that never got off the ground, Libra has a remarkable legacy. Arguably, every major piece of stablecoin regulation or legislation proposed over the past two and a half years has been tinged with the idea that a company, somewhere, might decide to create its own stable value currency based on blockchain technology. We’ve seen this in recommendations from the Bank for International Settlements to China’s central bank digital currency to the U.S. President’s Working Group for Financial Markets report on stablecoin regulation.

The House Financial Services Committee and Senate Banking Committee both plan to hold hearings on the PWG report this month. While we don’t have a lot of details yet, it’s safe to say the hearings will be a prelude to legislation on stablecoins. Elsewhere in the world, we’re seeing regulators start to implement rules on stablecoins.

Diem engaged with regulators throughout its life.

« As we undertook this effort, we actively sought feedback from governments and regulators around the world, and the project evolved substantially and improved as a result, » Diem CEO Stuart Levey said in a statement announcing the shutdown. « In the United States, a senior regulator informed us that Diem was the best-designed stablecoin project the U.S. government had seen. »

Levey also mentioned the PWG report, saying it validated the project’s « code design features, » including how it addresses stablecoin transfer risks.

The thing is, the original Libra vision of a basket-backed stablecoin was dead long before the association rebranded to Diem. Today, one could draw a comparison to tether (USDT) or US dollar coin (USDC) in that they are now backed by baskets of assets, though not baskets of currencies. They aren’t quite the same, but they are probably similar enough. The chief concerns were how the libra stablecoin might affect financial stability, how it might be used and whether users were protected. The same questions apply to stablecoins backed by baskets containing securities or other cryptocurrencies.

The big difference –  and I want to revisit this more in depth in a future issue – is that Facebook was involved. Lawmakers and regulators were aware of stablecoins, but didn’t really care about them as an imminent threat.

Facebook announced Libra in a carefully managed press event. Reporters flew to San Francisco for embargoed briefings, press releases and technical documents were shared under prearranged agreements not to publish before a specific time, and swarms of reporters spent time trying to unpack what was being announced.

Libra, and later Diem, was never able to overcome Facebook’s shadow, however much everyone involved with the project tried to draw a clear distinction.

For a parting thought, imagine how much regulatory brain power has been dedicated to this project over the past 30 months. It’s a lot! Surreal to imagine almost.

The FinCEN rule rises

The infamous unhosted wallet rule is once again on the Treasury Department’s radar. The department published its semiannual agenda over the weekend, detailing its priorities over the next six months.

The unhosted wallet rule first proposed in December 2020 was on the document, implying that Treasury (or the Financial Crimes Enforcement Network, the ostensible sponsor) is looking at the rule.

At first blush, this would seem to be another attempt at bringing forth know-your-customer rules for self-hosted/user-hosted/what-have-you wallets. Treasury, however, may just be keeping the rule alive just in case it does want to eventually get back to wallet rules.

The rule appears in previous semiannual agendas as well, but Treasury didn’t make any move on the rule last year.

The important details: Treasury bifurcated the rule in early 2021. The rule received enough comments the last time that a whole new comment process may need to kick off before Treasury can finalize or adopt the counterparty data collection provision or the overall rule as originally proposed. If Treasury just wants to adopt the currency transaction report provision (which would bring crypto reporting rules in line with current cash rules), there may not be much opposition.

What’s more, I’m told FinCEN may still not want the counterparty provision in its current form.

Long story short, this rule has made a reappearance, but there’s no real sign it will move forward just yet.

Biden’s rule

Changing of the guard

The Senate Banking Committee will hold a nomination hearing for Federal Reserve Board nominees Sarah Bloom Raskin, Lisa DeNell Cook and Philip Nathan Jefferson on Thursday.

It’s also the last week for Jelena McWilliams, chairwoman of the Federal Deposit Insurance Corp. (FDIC), who announced on New Year’s Eve that her resignation would be effective on Feb. 4.

Elsewhere:

Mastercard’s CipherTrace Used ‘Honeypots’ to Gather Crypto Wallet Intel: Crypto analytics firm CipherTrace said it uses “honey pots” in a slide deck Chief Operating Officer Stephen Ryan emailed to former Treasury Secretary Steven Mnuchin in 2020, according to emails obtained through a public records request. My colleague Danny Nelson digs in as part of CoinDesk’s Privacy Week series.How Binance, Coinbase and 22 Other Crypto Exchanges Handle Your Data: Another excellent Privacy Week story, this one by my colleague Anna Baydakova, looked at the privacy policies of 24 different crypto exchanges. In particular, she looked at what exchanges say about how they store personal financial data, what data they provide to third parties, what they share with governments, how long they store data and how they protect data, among other issues.Anchorage Closes in on FDIC Crypto Custodian Deal, Documents Show: Crypto custodian Anchorage is in the final stages of bidding for a contract with the FDIC to act as the custodian and disposal vendor for digital assets held by failed banks covered by the FDIC’s insurance, according to a Freedom of Information Act request filed by CoinDesk’s Sam Reynolds.

Outside CoinDesk:

(Blockworks) Twitter rolled out its NFT (non-fungible token) integration a few weeks ago. Blockworks’ Morgan Chittum found that the integration checks only if someone is connecting an actual NFT, i.e. something listed on OpenSea as being a receipt on Ethereum pointing to something. It does not check to see if the NFT is an original, or if someone just saved the image of an NFT, minted it as a new NFT, and connected that.(The New York Times) The New York Times’ Emily Flitter asks if crypto is in a bubble and whether it might burst. The analysis and the data are worth a read.(Eyewitness News Bahamas) Deltec National Bank and Trust, Tether’s bank, has bought another bank: Ansbacher Ltd., the Bahamas’ oldest bank, according to a local news outlet.(The New Yorker) I mean, Alex isn’t wrong.

Here’s the deal with Tom Brady: he will not retire until his successor is confirmed by the Senate.

— Jeff Greenfield (@greenfield64) January 29, 2022

If you’ve got thoughts or questions on what I should discuss next week or any other feedback you’d like to share, feel free to email me at nik@coindesk.com or find me on Twitter @nikhileshde.

You can also join the group conversation on Telegram.

See ya’ll next week!

The Coachella Valley Music & Arts Festival, set to return this April after a two-year hiatus, has announced a series of NFTs (non-fungible tokens) offering on-site perks and VIP access to the event.

It’s part of a “long-term” partnership with FTX, festival officials said in a press release. FTX is the crypto exchange helmed by billionaire Sam Bankman-Fried that recently snagged a $32 billion valuation (and an $8 billion valuation for its U.S. arm).

Coachella is launching three collections at different price points, all of which are built on Solana, a relatively eco-friendly blockchain with lower fees than Ethereum. FTX introduced a Solana-based NFT marketplace last October.

The first set, called the Coachella Keys Collection, consists of just 10 tokens, each offering lifetime festival access and other VIP goodies (among them, a “celebrity chef dinner”). There’s also the Desert Reflections Collection – 1,000 tokens priced at $180 each, which buyers can redeem for a physical copy of a Coachella photo book – and the Sights and Sounds Collection, which mostly just gets you the token and audiovisual accompaniment. The Sights and Sounds NFTs are priced at $60 each, and will launch in an edition of 10,000.

“Only blockchain technology can give us the unique ability to offer tradeable lifetime passes to Coachella for the first time ever,” Coachella Innovation Lead Sam Schoonover said in a statement.

Coachella – headlined this year by Harry Styles, Billie Eilish and Kanye West – isn’t the first music festival to experiment with crypto. This past year, New York’s Governor’s Ball offered NFTs through a partnership with Coinbase.

According to a press release, an undisclosed portion of the proceeds from Coachella’s NFTs will go to three charities: GiveDirectly, Lideres Campesinas and Find Food Bank.

In an attempt to get ahead of anticipated backlash, FTX has also purchased 100,000 tons of carbon offsets.

Le PDG et fondateur du navigateur Brave, Brendan Eich, compare le secteur des tokens non fongibles (NFTs) aux débuts d’Internet. Ce dernier estime que les escroqueries autour des NFTs sont un mal nécessaire et font partie de l’évolution du Web.

L’article Pour le PDG de Brave, la folie des NFTs ressemble aux débuts d’Internet est apparu en premier sur Cryptoast.

L’engouement pour les NFT de la collection Bored Ape Yacht Club (BAYC) continue de battre son plein avec une nouvelle vente à plusieurs millions de dollars. Celle-ci intervient alors que le prix plancher actuel pour un Bored Ape est passé à plus de 100 ETH ce week-end. BAYC reçoit également le soutien de plusieurs célébrités qui […]

L’article Un NFT de la collection Bored Ape Yacht Club s’est vendu à 2,8 millions de dollars est apparu en premier sur Cointribune.

Selon un communiqué de presse publié par le site de comparaison Finder.com le 27 janvier, 33 spécialistes du domaine de la FinTech, des cryptomonnaies et des NFT « pensent que le BTC culminera à 93 717 dollars en 2022 en moyenne, avant de terminer l’année à 76 360 dollars ». Un pic à plus de 93 000 dollars est espéré Si en début d’année, les […]

L’article Le bitcoin (BTC) grimperait à 406 400 dollars d’ici à 2030 est apparu en premier sur Cointribune.

Solana-based options trading platform PsyOptions has acquired Tap Finance in a bid to add structured investment products to its lineup.

PsyOptions paid for Tap Finance with a mix of tokens and cash, core contributor Tommy Johnson said. He declined to state its total value, saying it would “distract” from the news.

The deal bolsters PsyOptions’ effort to become a full-service crypto options outfit. Already host to “American style options” (which traders can execute right up to expiration), it will now also house Tap’s “Decentralized Options Vault,” or DOV.

Read more: PsyOptions Raises $3.5M for Options Liquidity Mining and NFT Derivatives

DOVs spin up complex options trading strategies for users to trade. Tap currently focuses on bitcoin (BTC), ether (ETH), solana (SOL) and a handful of other coins.

The platform has around 1,000 individual wallets plugged in, according to developers, whereas PsyOptions has 4,000.

Tap Finance is rebranding to PsyFinance under the terms of the deal, a press release said.

“From a business standpoint we need the PSY DAO to own the full stack, otherwise we can get the rug literally pulled out from under us from everyone just swapping over some other primitive,” Johnson, the PsyOptions contributor, said.

NFL quarterback and NFT startup founder Tom Brady officially announced his retirement Tuesday, saying he planned to spend more time with his family and working on his businesses.

Brady played for the New England Patriots for 20 years, winning a record six Super Bowls before joining the Tampa Bay Buccaneers and winning a seventh in 2021. ESPN reporter Adam Schefter first reported Brady’s departure on Saturday.

« The future is exciting, » Brady wrote in an Instagram post. « I’m fortunate to have cofounded incredible companies like [Autograph, BRADY and TB12 Sports] that I am excited to continue to help build and grow, but exactly what my days will look like will be a work-in-progress. »

The quarterback first announced Autograph, his NFT platform, in April 2021, saying the company would help athletes and other famous individuals create and market their own digital collectibles. The company partnered with DraftKings and Lionsgate to create NFTs based on film franchises as well as sports stars.

Autograph raised $170 million earlier this month with backing from venture capital firm Andreessen Horowitz, Katie Haun and Kleiner Perkins. But Brady said he’s been interested in crypto for far longer than just the past year.

He told CoinDesk’s Consensus 2021 conference that he wanted to be part of the crypto industry after discussing it with one of his coaches heading into the 2020 season.

« It’s really been a crash course in this offseason, all these things happen pretty quickly, » he said at the time. « But obviously, the more I learned about crypto and blockchain technologies, I really was wanting to be a part of building a great platform that could create opportunities for myself, other artists, other entertainment brands to create great collectibles. »

While Brady said he did not think the NFL would pay its athletes in crypto directly at the time, he does believe an increasing number of football players may choose to invest in digital assets, saying he himself had invested in some crypto.

Alright the laser eyes didn’t work. Anyone have any ideas? https://t.co/43WyShRxr2

— Tom Brady (@TomBrady) June 28, 2021

On football, Brady said at Consensus that he enjoyed playing with teammates « half [his] age » because he felt he could mentor these younger players.

« It’s not about me going, ‘wow, I’ve accomplished this in comparison to what everyone else has, in my particular career,' » he said. « It’s really about ‘what were the opportunities that were presented to me, and based on all the things and experiences that have happened in my life the people that have come into my life, how do I make the most of my opportunity?' »

At the time he had just won his seventh Super Bowl, setting a record for having more NFL championships than any player or team in the league.

« Competition, I think brings out the best in all of us, » Brady said.

If you Google “NFT scams,” the results will likely lead you down a rabbit hole filled with, in some cases, actual cartoon rabbits.

Non-fungible tokens (NFTs) have exploded into a multibillion-dollar sector of the crypto industry in the last 12 months alone. Top collector’s items, such as rare pieces from the Cool Cats and Bored Ape Yacht Club collections, trade for upwards of $30,000 or more.

If five- and six-figure price tags seem like a lot for a JPEG, NFT creators have a one-word answer for you: utility. Because NFTs create an indelible digital record of your ownership on the blockchain (aka the same tech on which crypto is minted), owning a digitally tokenized piece of art can also serve as your membership ticket to exclusive online clubs, gaming communities, Discord chat rooms and interactive experiences.

At least, that is, in theory. But in practice, NFTs are still new and a little messy. While blockchain enthusiasts consider them an exciting signal that mainstream crypto adoption is on its way, NFTs create some pretty lucrative opportunities for scammers due to the pure volume of money exchanging hands.

Ahead, we dive into what the most common NFT scams are, how to avoid them and why they’re becoming so frequent.

Common NFT scams (and how to avoid them)

Phishing scams and suspicious pop-ups

To buy your first NFT, you’ll need to sign up for a wallet that transacts on the Ethereum blockchain. MetaMask is perhaps the most popular Ethereum wallet for NFT collectors. However, MetaMask users were recently targeted in a phishing scam involving phony advertisements that asked for users’ private wallet keys or 12-word security seed phrases (a big red flag). There are also fake malicious pop-ups operating via Discord, Telegram and other public forums that link to normal-looking login pages, such as MetaMask or other popular websites.

If a bad actor gets a hold of your private information through a phishing attempt, they can drain all of the crypto in your digital wallet.

Discord is holding back the future of #NFTs. So many scams happening in that app… https://t.co/7DWfaJX4CC

— nickolastazes.eth (@nickolastazes) January 13, 2022

How to avoid these scams

As a general rule of thumb, you will only need your seed phrase when creating a hardware backup of your crypto wallet or when recovering your wallet. Never enter information into the MetaMask pop-up, or any other pop-up while you’re at it. Always go directly to the verified website for any crypto transactions, never using links, pop-ups or your email to enter your information. Write your seed phrase down on paper, and never give it out to anyone – don’t even store a photo of it in your phone.

Catfishing and fake personas

Because NFT sales happen virtually, and all marketing is done on social media, it’s easy to get catfished. Popular NFT communities commonly hire influencers and celebrities to promote them, making it difficult to tell which ones are real or not.

How to avoid these scams

If you ever receive a direct message from someone who claims to be a founder, celebrity or influencer, don’t respond. It’s commonly known etiquette in the NFT world that C-level staff will never DM you unless you send them a message first or you come to a specific agreement in a public Twitter thread or Discord channel. It’s kind of like when you were young and your parents told you never to give information to a telemarketer who called your house. The same thing applies in the NFT world – if someone DMs you first, don’t click links or reveal any secrets.

Pump-and-dump schemes

Pump-and-dump schemes are unfortunately becoming somewhat predictable in the crypto and NFT worlds. The term refers to when a group of people buys up a bunch of NFTs or currency and artificially drives demand way up. Once they are successful, the schemers cash out when prices are high and leave those who weren’t in on it behind with worthless assets.

a lot of these huge NFT « sales » are people selling it to themselves as part of either a pump and dump or a money laundering scheme https://t.co/s5QIIKhUL3

— Robert Evans (The Only Robert Evans) (@IwriteOK) October 29, 2021

Similarly, you may also have heard of “paper money” in reference to NFT projects that aren’t technically scams but have limited liquidity thanks to a handful of aggressive buyers.

“When you have 5,000 NFTs that are being controlled by 20 of the top collectors and none of them have any pressure whatsoever to sell, essentially anyone who wants to buy into that collection has to buy in at a very high floor price,” said a pseudonymous NFT collector known as Whale Shark, who owns over 400,000 NFTs. If you’re buying NFTs as an investment, odds are better when the project has more buyers and therefore more liquidity.

How to avoid these scams

Check the history and wallet records of whatever project you’re interested in. This is where blockchain’s transparency comes in super handy. On OpenSea or any NFT marketplace, view the number of transactions and buyers for the NFT collection. With EtherScan, you can see all incoming or outgoing transactions that happen on the Ethereum blockchain.

Also, follow the project on Twitter and join its Discord channel. For a project to have good liquidity and/or lasting community or artistic value, there should be a good number of engaged investors and collectors, plus an active community where people talk, engage and share information.

Bidding scams

Bidding scams happen mostly in the secondary market after you’ve purchased your NFT and you want to resell it to the highest bidder. Once you list your NFT for sale, bidders might switch up the cryptocurrency used without telling you. Instead of receiving 5 ETH (roughly $15,000 to $20,000) for your favorite NFT, you could get $5.

How to avoid these scams

Double-check the currency used and never accept a lower bid than what you want.

Counterfeit or plagiarized NFTs

It’s worth remembering that minting a piece of artwork as an NFT is not the same as having intellectual property (IP) ownership of it. Thanks to OpenSea’s beginner-friendly software, anyone can turn any photo or image into an NFT whether or not they own the rights to that IP. Scammers and bad actors could easily steal an artist’s work and open a fake OpenSea account where they list counterfeit artwork for auction. This would make your NFT essentially valueless once the community finds out what that scammer is up to – and there’s no way to get your money back.

How to avoid these scams

Before buying an NFT from any marketplace, do your research to make sure the artwork you are buying is from a verified account. Look for the blue check mark next to the artist’s profile picture on OpenSea or other NFT marketplaces. If there is none, find the artist on Twitter or through their website or other social media channels. Ask them directly if the artwork you want to buy is theirs, and if you have the right user profile. Also, see if the artist or NFT project has a Discord channel and ask others in the community.

This was the first #NFT I ever bought. It’s a fake. I found it exploring #OpenSea. So, I speak from experience when I tell you: only follow official links you find in the project’s #Discord server. #NFTs #NFTCommunity #NFTCollection #NFTScam pic.twitter.com/Jy12uA7QXF

— kanoa.eth (@0xKanoa) January 13, 2022

Watch out for counterfeit blue checks. A true verified account shows a blue check on the border of the profile image, not on the inside. See this example from an NFT scam quiz (which we highly recommend you take) developed by Curious Addys’ Trading Club. The second example is the correct one.

Untrustworthy storage sites

This is another ethical gray area, not so much a scam. NFTs can go missing once you purchase them. That’s because the contract that lives on the blockchain (the NFT) is different from the actual artwork. For example, say you were to upload an mp3 file of original music to a platform like OpenSea. When a collector is ready to buy it, they place a bid and pay you in ether, which will then create a record of ownership known as a smart contract.

The smart contract is what actually gets minted on the blockchain. But the file you uploaded (aka the content and the metadata) is separate. It sounds abstract, but remember that NFTs are just about the ownership of an asset, but the asset itself could be anything.

Therefore, if you store the artwork, house deed or other digital content that came along with the smart contract on a centralized platform, make sure it is a trustworthy one. And don’t buy an NFT that merely links to a URL with an image. Whatever page or artwork is stored on that URL can be changed any time without your permission, leaving you holding a token that essentially points to nothing.

Bottom line

If you buy an NFT, make sure you also take possession of the tangible or digital asset (in the form of a JPEG, mp3 or PDF file) outright.

The ultimate way to avoid NFT scams

New scams are always storming the NFT scene, which is why you can’t go it alone. The best way to avoid existing and new NFT scams is to stay informed, and that’s where finding fellow NFT enthusiasts becomes imperative.

Your NFT journey might start with self-education, said Denise Schaefer, co-founder of the crypto education platform Surge. But eventually, you’ll hit a wall and get overwhelmed – and that’s when you’ll need to rely on more experienced collectors and creators you relate to.

“As I started researching by myself, going down the rabbit hole, there were two issues that quickly became apparent to me that I wanted to help fix,” Schaefer said.

”Number one, I felt that there wasn’t a lot of easily accessible and easily digestible content out there. And the other one was that the space felt very male-dominated.”

If you’re new to NFTs and feel unsure where to begin, check out resources like Surge, which has a free Discord channel for women and non-binary people who want to get started creating and collecting NFTs, or Curious Addys’ Trading Club, a crypto community for newcomers.

“It’s been amazing to see the speed at which things are growing,” Schaefer told CoinDesk. “We have a newsletter now, and we’ve created our Discord, which is a safe space for women.”

Inside the Surge Discord channel, you might encounter somebody who has never made a Metamask wallet before getting advice from somebody who’s running a decentralized finance (DeFi) organization, Schaefer said.

“It’s really great to have people of all levels helping each other in their journey,” said Schaefer.

Why are NFT scams so common?

“Essentially, NFTs right now are in the ICO [initial coin offering] stage,” said Nelson Merchan Jr., co-founder and CEO of blockchain PR firm Light Node Media. “Anybody can basically hire an artist to create a specific number of NFTs and then create a lot of hype with crypto influencers.”

This “hype” makes it difficult to discern who in the NFT space is a trustworthy creator and who is a bad actor, especially when so many NFT collectors and creators now use popular cartoon NFT profile pictures (PFPs) and anonymous names on Twitter.

And it’s not just crypto newbies who face risk: Merchan, a crypto investor since 2017, has owned NFTs from the popular Pudgy Penguins collection since it dropped in July 2021. Now facing what some outlets are calling a coup, Pudgy Penguins founders are under scrutiny from angry collectors who claim the project failed to deliver on its promise of creating an in-depth virtual game.

“People are [creating] these NFTs, and spending between $50,000 and $60,000 – sometimes even less – then making a million dollars in NFT sales if they really hit it right,” Merchan said. This leads to an issue of governance and transparency because once an NFT creator or community founder makes a $1 million promise, collectors naturally expect them to follow through.

“They’re paying themselves very handsomely,” Merchan said. “But then the value of the NFT itself is going to basically zero. There’s no trading, no game and barely a community. They have a sizable treasury fund, but an absolute failure of a project. And that is very worrisome.”

But are these types of projects the same thing as scams? Time will tell, Merchan said.

“When the market turns on everyone, which I think is still going to take some time, these people are going to be considered basically criminals because [collectors] spent all this money on their NFTs, and they’re basically worthless now. What are [the founders] going to do with that money? Are [they] going to give it back? Did [they] spend it?”

In addition to the ethical gray areas of NFTs, there are also a number of known NFT scams where the bad actors are very clear – and the losses quite real. So stay alert, make the most educated decisions you can and never invest more than you can afford to lose.

Le Crypto Drink Paris revient ! Mardi 1er février à 19h, les passionnées de Cryptomonnaies, NFT, Blockchain, DeFi vont à nouveau pouvoir se retrouver autour d’un verre pour échanger sur l’actualité de la finance décentralisée.

Suite à l’annulation de l’édition du mois de janvier liée aux règles sanitaires mis en place par le Gouvernement, le Crypto Drink Paris revient donc en ce début février, cette fois-ci dans le bar The French Flair, situé dans le 9ème arrondissement.

Pour rappel, en octobre dernier, nous vous avions présenté cette belle initiative de rencontre de la communauté crypto, lancée par un collectif de passionnés (@crypto_drink_75 sur Twitter) pour favoriser les échanges, créer du lien, et générer des rencontres professionnelles ou amicales. 

Leur constat était simple : l’univers des cryptomonnaies fait vibrer des milliers de personnes en Ile-de-France, qui apprennent et partagent chaque jour derrière leurs écrans. Le contenu sur internet est riche et il est aujourd’hui très simple de se former, et de rejoindre des communautés virtuelles pour enrichir ses connaissances ou assouvir sa curiosité… mais les gens ne se rencontrent pas !

Et la vie derrière son écran est rarement suffisante pour générer de réels liens avec les autres membres du réseau ou les différentes communautés.

La création d’une rencontre physique mensuelle dans un cadre décontracté s’est donc imposée comme une véritable nécessité, afin de compenser les limites d’une vie passée derrière les écrans.

Ainsi, tous les premiers mardis du mois, un Crypto Drink est organisé dans un bar parisien dont l’adresse est communiqué une dizaine de jours avant l’évènement.

Cette rencontre est ouverte à tous : que vous soyez débutants, passionnées, professionnels, ou influenceurs… N’hésitez pas à venir nous rencontrer !

La première édition du 7 décembre 2021 a été un franc succès puisqu’elle avait réuni plus de 200 personnes au Milton Bar. Nous avons pu voir des groupes se former, des coordonnées s’échanger, des projets prendre vie au rythme des discussions sérieuses ou des éclats de rire.
Le Crypto Drink Paris est devenu le premier rassemblement parisien ouvert à tous, indépendant des influenceurs ou professionnels du milieu.

Cette initiative populaire appartient donc à tout le monde, et la présence de centaines de passionnés chaque premier mardi du mois, en fait sa valeur.

A chaque édition, la communauté Crypto se développe et se renforce un peu plus.

Rendez-vous donc pour cette première édition de l’année 2022, aujourd’hui, ce mardi 1er février, au bar The French Flair (Paris 9) à partir de 19h !

Les restrictions sanitaires encore imposées pour l’heure seront appliquées : présentation du pass vaccinal, port du masque et places assises.

L’article Crypto Drink (Paris) – Fans de Bitcoin, de cryptomonnaies et de la DeFi : venez boire un verre ce 1er février ! est apparu en premier sur Journal du Coin.