In the NFTs space, where you can buy and own digital assets from anyone on the internet, it is easy to be scammed or as they call it ” being rug pulled”. But this is one of the possibilities…
Not all NFT projects are scams, they are verified contracts, with creators’ reputation on the line and is being used by well-known brands and celebrities. We can’t generalise that all NFTs are a scam.
First of all, any product in the world can be a scam. Even if you buy something as simple as a pack of gum, what guarantees to you that it is not actually expired and they managed to hide that from health authorities?
We will discuss in this post why not all NFTs are a scam.
Verified Creators and Transactions on a Public Ledger
Just like cryptocurrencies the NFTs are built on the Blockchain. When transactions are recorded on the Blockchain it means that they are immutable and no one can do any changes.
With that in mind, it also means that such transactions are verified by the creator and the meta data (like time, date and the receiver details) which allows to make sure that every NFT is unique for its holder.
If an artist decided to host an event and give out NFTs for their event attendants. The distributed NFTs will be officially recorded on the blockchain, and it will be hard for someone to impersonate the artist unless the wallet is hacked.
If you think about it, hacking a wallet and being able to scam people is similar to the case of a person decide to forge a fake legal contract and find a legal loophole to utilise it in the system.
Creators Reputation are on the line
If you did proper research and you find out who is behind the project, a publicly revealed person may less likely attempt to scam.
Unless this scammer does not care about his reputation, he will not take any wrongful action.
Well-known Brands and Artists are in the space
With a wide range of artists musicians and celebrities using NFTs. It is less likely that it would be a space with scams in general. Because if it is the case, we will already see in the media celebrities calling it out.
I understand some celebrities and brands could be cash grabs and are trying to take advantage of their audience but it’s really difficult to believe all of them are just scamming their audience.
Maybe few are after the quick money? it is possible :)
Here is a list of few of celebrities who are in the Bored Ape Yacht Club project (also partners with Adidas).
- Tom Bilyeu (Impact Theory Founders Key)
- Gary Vaynerchuck (Vee Friends)
- Paris Hilton (Paris: Past Lives, New Beginnings)
- Justin Bieber
- DJ Khaled
- Much More…
Yes, they are all in just one NFT project! Some of the list above are also running their own projects (I linked some in brackets).
Web 3.0 has more potential than the available today
This space is relatively new and the use cases has not been fully realised. Right now, most of the projects are focused on profile pictures and early stage utilities, but in reality there are so much utilities that adds value for the NFT holders.
Just remember a NFT is a programmed smart contract with access to the blockchain. So creators can program the contract details and store the data in the blockchain (basically you can do almost anything with it), like:
- Use it as a discount coupon which can be used on multiple online websites (through connecting your wallet)
- Use it as a ticket to attend events digitally and even physically
- Use it as a gaming character/item on multiple games (yes multiple games and not just one)
- Use it to connect with physical devices (imagine a NFT that tracks your blood sugar and is reporting details to your doctor on real-time)
- Use as a certificate of ownership/authenticity (university certificate, job position, personal ID, license, authentic LinkedIn profile)
- Used as a programmed AI (a robot voice recorded employee, an NPC for a video game)
- … possibility are endless
That is what excite me about the NFT space, I know that in reality 98% of all projects will crash, but successful projects may end up adding so much value to their holders for many years to come.
Not all Value is realised by Current Holders of the available NFT projects (YET)
Again, this is not to disregard the value current projects added, but it is just hard to give benefits for their holders quickly when the space is just few years old.
Majority of the NFT contracts are programmed and requires time and effort in order to deliver value for the users, so for example play to earn games requires many years to prepare a decent game.
Another example is the profile picture projects which would give the users access to attend events and activities whether they are digital or physical. The thing is right now is that the physical events are being slowed down given the current pandemic (COVID-19) and the digital events are most likely going to be through the Metaverses which are still on early stage.
Just please be careful
I know that the post is focused on how legitimate the NFT space is. However you have to be very careful because it’s still new and it is very easy to get scammed, whether it is through a direct message in Discord or a website that collecting your wallet through signing a contract, Just make sure that you do your research and avoid risking money you cant afford to lose.
At the end anything can be a scam whether it’s an NFT project or even if you would buy vegetables from a shop. Having said that as long as you are planning to be in the space just be careful, do your own research and double check everything and enjoy the journey!
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