Our educational hub provides a foundation for getting started as a creator, collector or visitor. We hope that here, you will find everything you need to become an NFT-pro!
Table of Contents
This educational center is aimed at all newcomers to the NFT space. With this guide we intend to familiarize you a little with the fundamental concepts of the NFT space, and to make the experience more enjoyable for you.
Most of the articles are followed by external resources. We invite you to click on them to delve into each topic. And don’t forget: always do your own research!
Also, keep in mind that this educational center will evolve. Over time we will be expanding/enriching the content of this educational center, with the aim of keeping you updated at all times of any potential news.
WHAT IS AN NFT?
An NFT is a ‘Non-Fungible Token’. When something has fungibility, it means it is mutually interchangeable, so Non-fungible means that it can’t be exchanged for another asset of the same type.
NFTs use blockchain technology to store anything digital this can include; art music, videos, tickets, games, collectibles, etc.
Definitely, not all NFTs are only about art. Many NFTs have underlying utility, this can include:
– Exclusive access
– Collaboration with brands
– Commercial use
– Early access
– Ownership of physical items
– Benefits through partnerships
Blockchain technology provides traceability and ownership.
In short, blockchain is a digital ledger of permanent and auditable (i.e. verifiable) information. A blockchain ledger can include (but is not limited to) the following information of buyers, sellers, current owner, creator, transaction data, smart contract data, properties of the NFT and much other information.
WHAT ARE CRYPTOCURRENCIES?
Cryptocurrency is decentralized digital money that’s based on blockchain technology. Unlike regular currencies there is no central authority that manages and maintains the value of a cryptocurrency. Instead, these tasks are broadly distributed among a cryptocurrency’s users via the internet.
“Crypto” is short for “Cryptography” which is the technique of writing or solving codes (which is what enables data security). Currency is a system of money in general use in a particular country, or in this case digital world or Metaverse or Web 3.0.
Cryptocurrency is digital money. Like money or currencies all over the world there are also several different tokens on the internet that operate in their own special way, like bitcoin, ether, MATIC powering the Polygon protocol and many more.
Asset – This is another way to talk about a digital collectible.
Blockchain – Think of it as an open spreadsheet that everyone in the crypto world has access to, and it records any changes or transactions.
Bridge – If you want to trade your NFTs but don’t have a way, then you can use a bridge service like Evodefi. A bridge will move your tokens from one blockchain to another for a fee, and you can get back your tokens on the new chain.
Burning – If you want to get rid of an NFT, send it to the NFT contract address. This will destroy your tokens and they’ll no longer be transferable.
Collectible – Think of this as something that has value or rarity, such as mini-figures or special edition sneakers.
Dapps – Think of these as apps that run on decentralized networks (and not just Ethereum, but any platform). They’re crypto projects.
Decentralized Exchanges (DEX) – These are exchanges that allow for peer-to-peer transactions rather than going through a third party.
DeFi – Think of this as an acronym for decentralized finance.
Etherscan – This is the most popular block explorer to check the worth of your digital collectibles. You can also use it to verify balances and transactions.
Fiat – This is the name for currencies like USD, Euro, and GBP.
Gas – An amount required to perform cryptocurrency transactions on the blockchain. Every time you buy an asset, send ETH, or set up a smart contract, then gas has to be paid in order to run the transaction.
Minting – Think of this as the creation process.
Smart Contract – An agreement that automatically executes between two or more parties under certain conditions. They’re enforced on the blockchain network, irreversible, and not subject to change.
Tokenomics – The branch of economics that deals with the design, issuance, trading, and regulations of crypto tokens.
Wallet – This is where your tokens live while they’re not in use. Think of it like a house that you store all your digital collectibles in until you want to sell them or send them somewhere else.
Roadmap – A is a document that points out the goals and strategies of an NFT project, which shows its long-term value
Floor – The floor price is the lowest price for NFT – collection items.
Devs – Developers are called the people/founder behind an NFT project.
FOMO – “Fear Of Missing Out”.If you FOMO into buying an NFT, your decision was made by your emotions.
1:1 Art – Is a single, unique NFT artwork from.
WHAT IS BLOCK EXPLORER?
Block explorers connect directly to a specific blockchain, such as Bitcoin or Ethereum. They allow the user to view and query individual blocks — providing visibility to anyone of the transactions or other actions made by holders of individual cryptocurrencies.Block explorers are a key part of cryptocurrency’s mission of transparency and decentralization and the universal visibility of all transaction data is one of the key differentiations between cryptocurrency and conventional currencies
Etherscan is known as Ethereum’s leading “block explorer”. It is essentially a search engine that lets users look up, confirm and validate transactions on the Ethereum decentralised smart contracts platform. By entering an address into the search box, you can view the balance, value and all the transactions made through that address.
WHAT IS BLOCKCHAIN?
Blockchains are made up of a series of individual blocks. Each block contains information about transactions conducted within a given time period. They also contain a unique identifier to differentiate them from every other block in the chain.Blocks are created by solving cryptographic problems. The process of solving these problems is known as mining. Mining a block on the blockchain attracts a reward. For example, at the inception of the Bitcoin blockchain, miners solving the cryptographic hashing problem required to add a new block to the blockchain were rewarded with 50 BTC.Blockchains are decentralized records. Instead of being stored in one central location, the blockchain is stored on the computers of every user of that given blockchain.
Meanwhile, the unique block identifier — known as the hash — is derived from the information contained in every previous block in the blockchain. This means that, in order to falsify any record on the blockchain, a nefarious actor would have to change every block on every instance of the blockchain. As a result, blockchains are considered to be virtually unfalsifiable, and are thought of as inmutable records of transactions. Today, most blockchains are public. This includes prominent cryptocurrencies such as Bitcoin and Ethereum. Anybody can view records of transactions conducted on a given blockchain, using a tool called a block explorer. Theoretically however, blockchains afford a high level of anonymity to users.
While public blockchains are the norm, private versions are also being explored as a solution for many business and governmental use cases.
NFTs have taken the world by storm, disrupting the art world and industries beyond. While crypto enthusiasts consider this an exciting sign that crypto adoption is starting to catch on, it’s hard to discern who is a trustworthy creator and who is a bad actor in the new space.
The growing mainstream interest in NFTs has made many popular NFT projects’ communities subject to phishing attacks.This has sparked active discussions on how to best protect your NFT assets.
Since the NFT space is still budding, keeping abreast of common scam tactics and the latest in NFT safety and security is very important.
However, there are a few common scams that you should be aware of.
COMMON NFT SCAMS
1. Fake Marketplaces
If you’re thinking about investing in your first NFT, the first thing is to find a platform where you can buy and sell NFTs. A quick google search will get you millions of search results, but sadly there are many phony NFT marketplaces among them. These fake sites don’t have legitimate NFTs, so if you buy one, the site will record down your credentials from your transaction details. Moreover, these sites may even ask for your private keys or 12-word security seed phrases, and use it to drain your digital wallet of all your assets.
2. Fake Offers
NFT scammers often impersonate legitimate NFT trading platforms and send you fake emails claiming that someone has made an offer for your NFT. These phishing emails aim to get you to follow the embedded link that takes you to a fake NFT marketplace.
And like all other phishing scams, the button will lead you to a fake page that will ask you to link your digital wallet and submit your seed phrase, allowing bad actors to hack into your wallet.
To avoid these kinds of NFT scams, always check and verify the sender address of any email received from an NFT trading platform.
3. Fake Technical Support
Fake customer service representatives or technical support messages is another common scam. For example, imagine you’re having technical difficulties on a popular NFT marketplace and ask for help on a public forum like Discord. Someone who claims to represent the marketplace then offers their assistance.
The fake support agent might ask you to share your screen to check what’s going on, making you inadvertently reveal your cryptocurrency wallet’s credentials.
How do you avoid these kinds of scams and keep your NFTs safe? Only ask for help through the official NFT marketplace and double check the site domain. Some scammers may send you fake security alerts about your account or NFT collection, but the tactics are similar. Don’t click on anything before verifying its legitimacy.
4. Fake Giveaways
Posing as employees from popular NFT trading platforms, scammers will contact you via social media and ask you to join their NFT giveaway campaign.
They might promise you a free NFT as long as you spread the giveaway and sign up for an account on their website – a phishing site.
And once they have gotten you to link your digital wallet credentials to receive your prize, they will record what you type, gain access to your account and potentially steal your library of NFTs.
To avoid falling for this type of NFT scam, make sure you check out that person’s social media accounts and double check that the link you’ve received from them matches the company’s legitimate domain name.
5. Rug Pull Scams
Rug pull scams are when a person or a group of people release a preliminary collection of NFTs to kick off a bigger project that the project plans to unfold over time with a game component, merch or an event.
The rug pull comes in when they run off with the millions of dollars raised before any of the promised actions can take place. In many cases, this happens quickly, but there have also been instances of slow rug pulls where the project is gradually abandoned, with a lack of updates and new developments.
The best way to avoid falling into the trap of a rug pull scam, is to DYOR( Do your own investigation). Investigate the team behind the project and evaluate their long-term business plans.
Follow the project on Twitter, Discord or other public forums, because for an NFT project to have good liquidity or lasting artistic value, there should be a sizable active community of engaged investors.
6. Counterfeit NFTs
Minting a digital file as an NFT doesn’t make it a new piece of intellectual property or give you ownership of it. Instead, this simply turns a digital file into something that you can store on blockchain.
Scammers can easily steal a digital creator’s work and open an account on an NFT marketplace where they list the counterfeit piece for auction.
If you purchase the counterfeit NFT, this would make your NFT worthless once the community realizes it’s not the real deal, and there would be no way to get your money back.
How can you avoid this scam? Before bidding on the NFT, check the seller’s Discord or social media profile for a verification tick for added credibility.
Moreover, instead of searching for a collection directly on an NFT marketplace, use the official link from the creator’s social media account and bookmark the page to avoid phishing.
The potential pitfalls of not doing your own due diligence are many, and a simple web search will return many cautionary tales.
7. Pump and Dump Schemes
Another thing to watch out for are so-called pump and dump schemes.
In this case, the term refers to when a person or group aggressively buys up a ton of NFTs to artificially drive up the demand.
They do this within a short period to make it seem like the NFT is popular, and once it gets attention, they will cash out when the selling price hits the amount they’re comfortable with.
Leaving the highest bidders behind with worthless assets.
With that said, always review the transaction history of the NFT you want to purchase. Several transactions made around the same date could indicate a pump and dump scheme.
Now that we’ve covered some of the more common NFT scams, here’s five tips you can follow to protect your NFT collection online.
Don’t blindly click: Never click on links or attachments from unknown sources. And when it comes to seeking help regarding issues on an NFT platform. Always look to the official customer service on official NFT trading sites for help instead of someone who contacted you via other platforms like social media.
DYOR on NFT Projects: Scrutinize the project’s website, roadmap, social media channels, and creators’ biography before investing in NFTs, to assess the long-term value of your investment.
Check the contact address: The address should specify where the NFT was minted. If you’re not sure, check the creator’s website to make sure the information is genuine.
Be smart with your wallet credentials: Keep your seed stored in a safe location, and don’t share it with anyone or keep a picture of it on your phone. Moreover, use strong passwords and enable two-factor authentication (2FA) to enhance the security of your accounts.
Use legitimate wallet apps and browser extensions: There are a lot of malicious apps impersonating official ones. Download your wallet app or browser extension from the legitimate, official site to avoid getting phished.
While it’s clear that the technology behind NFTs has the potential to revolutionize the digital world, the NFT space is still in its infancy. All the hype in the space can make it hard to determine who is a trustworthy creator and who is a bad actor. So stay alert, and always DYOR before you invest in a digital asset.
Now that you’re equipped with top tips to keep your NFT collection and wallet safe, ready to immerse yourself in the world of NFTs?
NFTs come in all sorts of formats. From digital artwork, video and audio files, to profile picture collections, there’s a big world of unique digital assets to explore.
Although NFTs can be created on many different blockchain networks, here we’re going to focus on Ethereum, the most popular for NFTs.
Follow this step-by-step guide to find out how to buy your first NFT!
Set up a wallet
There are many crypto wallets to choose from, but MetaMask is the most popular. With direct integration on OpenSea—the largest Ethereum NFT marketplace—and a gallery to view your digital collectibles, MetaMask is also the best choice for beginners.
While using MetaMask on OpenSea is the most popular way to buy an NFT, these instructions can also be applied to any crypto wallet and most marketplaces.
To create your MetaMask account, simply download the mobile app on your iOS or Android device or browser extension for your desktop (MetaMask currently supports Chrome, Firefox, Brave, and Edge). Unless you strongly prefer to buy NFTs on your mobile device, we recommend the desktop app as it’s easier for first-time users.
Fund your wallet with ETH
Next you’ll need to add funds so you can make your purchase if you want to buy and sell NFTs online. There are many different exchanges and on-ramps available to buy ETH, including MoonPay.
MetaMask, like most wallets, makes it safe and easy to copy your crypto wallet address in the app to paste as your destination when completing your purchase. When prompted by your preferred platform, enter your MetaMask Ethereum address and add the amount of ETH you want to buy.
The amount of ETH you should add depends on the price of the NFT you want to buy, but you should always buy a bit more to cover the gas fees required by Ethereum transactions.
Connect your wallet to OpenSea
Whether you’ve chosen to download the MetaMask chrome plug-in extension for desktop or the mobile app, you’ll be able to seamlessly access OpenSea.
On desktop, head over to OpenSea.io (we recommend bookmarking the site to avoid NFT scams online), and click the profile icon in the top right corner.
You’ll be prompted to connect your digital wallet. We’re covering MetaMask here, but you should choose the option that corresponds to your preferred platform.
Enter your account password (not your seed phrase), and you will be connected to OpenSea!
Choose the NFT you want to buy
So you’ve made it to OpenSea! Your MetaMask wallet is funded and you’re ready to buy your first NFT. Now what?
There are many factors to consider when buying NFTs. Each particular digital asset is unique, and beauty lies in the eye of the beholder.
Maybe you’re looking for a specific digital art piece, or an NFT project released by a specific creator. Perhaps you’ve seen the hype coming from the latest alliterative animal NFT collection and you want to be part of a budding community.
Whatever you’re looking for, you can search OpenSea for a particular digital collectible, creator, or collection.
Buy your NFT
Once you find your desired NFT, click “buy” and OpenSea will take you to a purchase screen. You’ll need to approve the transaction in your cryptocurrency wallet, usually just by clicking a button.
Next you’ll have to set the gas amount based on the transaction priority. If you want your purchase to go through right away you can set a higher limit, or if you’re willing to wait a bit longer you can save some ETH by setting a lower limit.