NFTs have been all the craze for the last year, but in the virtual sea of NFTs, there is a mix of real and fake NFTs to sort through.
I’ve spent time on Discord and Twitter, talked to experts, and absorbed as much intel as possible to learn how to differentiate real from fake NFTs, and now I want to share this information with you to help equip you with the tools to navigate the NFT space safely.
First, What is an NFT?
An NFT is a non-fungible token, which may not make things any clearer to you if you don’t use the words “non-fungible” regularly.
Non-fungible simply means that something is unique and cannot be replaced by something else, and this is one of the reasons why NFTs can have such value, even be it intrinsic.
People buy NFTs for various reasons, such as investing in the NFT for profit, buying an NFT out of appreciation of the artwork and utility, or wanting to be a part of an NFT community. We actually wrote a guide on what to do with NFTs after you buy them.
Nobody wants to be duped into buying a worthless asset or buying an inauthentic copy of an NFT. I’ll go through a few different scenarios in the NFT buyer’s journey to help you spot the signs of fake NFTs and how to avoid buying them.
What Constitutes a “Real” NFT vs. a “Fake” NFT?
NFTs are relatively new to the mainstream public, and many people are still trying to wrap their heads around what is an NFT, let alone trying to distinguish what is a real NFT vs. a fake.
However, by spending some time thinking about why an NFT has value, can lose value, why you’re buying an NFT, and what makes an NFT authentic will serve you well before you reach into your crypto wallet and pull out your hard-earned money to pay for an NFT.
When you see how easy it is to create/mint an NFT, you can understand why fraudsters make copycat NFTs in order to make a quick buck.
Here it’s my goal to lay out a framework that you can use when thinking about buying an NFT that will help increase your confidence that you’re purchasing an authentic NFT and not a fake.
There is no concrete, binary way to categorize NFTs into real or fake (yet). Still, there are signs that you can look at that can inform you about the likely nature of your NFT of interest and ultimately lead you to make informed investment decisions.
Some techniques that you can use to spot a fake NFT are to:
- Examine NFT metadata
- Identify a fake NFT artist
- Distinguish fake pre-sales or offers
- Notice real and fake NFT websites
- Keep your eye on social media as an NFT project launches.
Examine the NFT’s Metadata to Determine its Location on the Blockchain
A “real NFT,” technically speaking, is anything digital that exists on a blockchain. (Yet, fakes exist on the blockchain as well.)
For example, if you have a piece of artwork or image, and this has been minted to the Ethereum blockchain, it is technically a real NFT.
I’m going to try my best to articulate this as it may be confusing.
There is little that really separates real NFTs from fake NFTs with respect to the manner in which they are stored on the blockchain, except for their respective locations on the blockchain.
By looking at an NFT’s metadata, you can determine the source address at which the NFT was created (minted) and the lineage of buyers and sellers that have traded the NFT since it was created.
By paying particular attention to the contract address that the NFT originated from, you can make sure that the NFT originated from the correct contract address of the official NFT collection from which you’re trying to buy.
Every NFT has verifiable metadata and transaction log that can assist in proving the record of ownership. The metadata will tell you who owns the NFT before you buy it, but also, more importantly, the original source of the NFT.
It may be helpful to use this guide to using metadata or check out “How to Check the Ownership of an NFT (7 Methods)” if you haven’t done this exercise before.
There are also signs of an authentic NFT collection that you can look for. If a collection has reached over 100ETH in sales, this is a good indication that this sales volume from the same contract address is from an authentic collection. (Of course, this is going to apply to NFTs on the Ethereum blockchain.)
If an NFT collection has reached this sales threshold, it will be verified with a blue checkmark on OpenSea, indicating that it is a Verified Collection.
How to Spot Fake NFT Artists
A fake NFT artist is someone who steals artwork from another artist and passes it off as their own. Buying into an NFT that has plagiarized artwork is something you want to avoid, and doing a reverse image search of an image of an NFT can give you a sense of whether the artwork is copied.
This practice is very easy to do as fraudsters can essentially screenshot an image, create an NFT wallet account, mint the copied piece of art, and place it on the market for sale.
In order to determine if the NFT artwork is copied from something that is already available on the internet, you can do a “reverse Google search” to see if the image already exists elsewhere on the web. To learn how to do a reverse image search with Google, see this guide here.
If you find that your image of interest already exists on the web and was authored by someone else (other than the original artist or creator), this means the NFT art was most likely stolen, and you shouldn’t buy the NFT.
The secondary market, OpenSea, has started taking action against NFTs that turns out to be plagiarized or stolen by removing those NFTs from their platform in an effort to fight back against fake NFT artists profiting from the work of legitimate artists.
How to Spot Fake Pre-sales or Offers for Upcoming NFT Launches in Discord
Discord is an app that is usually one of the main venues where an NFT project is discussed, and as a result, this is a significant target area for scammers looking to peddle fake NFTs.
If you’re in Discord and you receive an unsolicited direct message from someone claiming to be a team member or founder of an NFT project, the chances are that this is a scam.
These direct messages (DMs) often claim that there is a “stealth mint” for an NFT project or that they are offering you a chance to get on the whitelist or allowlist of a given project.
If it’s an unsolicited DM from someone claiming to offer you something enticing, it’s likely a scam. If you open the DM, you will probably be led to click on malicious links that will fool you into purchasing fake NFTs.
In these situations, the fake NFT will mimic a more well-known and established upcoming NFT project, posing as that NFT project.
Clicking on a malicious link in a Discord DM will generally:
- Direct you to a fake website posing as the official NFT website.
- Initiate a request to your Metamask wallet or whatever wallet you are using to approve transactions that will transfer your assets to a scammer’s wallet.
This DM scam is the most common type of scam you’ll see of scammers impersonating legitimate NFT projects, and it’s something that you should stay vigilant and aware of as you spend time on NFT Discord servers or wherever you are socializing.
How to Spot Fake NFT Websites
For our purposes, we’ll define a “fake” NFT website as one that is posing as another legitimate NFT website that is home to a real NFT project, creator, or artist. In other words, a website that is posing as another website.
The fake NFT website will look remarkably similar to the real NFT website in these situations. Still, the differentiating element between the two will usually be the website’s web address you are visiting.
This web address should match the web address given on the NFT project’s official Twitter account and/or can be found in the “Official Links” section of the project’s Discord server.
If the web address of your website of interest does not match the web address found in the official Twitter or Discord, it is most likely a fake website posing as the official website.
Look closely before taking any action or connecting your wallet to any sites because the fake ones typically only differ from the official sites by one or a few characters.
For example, the official web address may be “NFTproject.io” and the fake website may be “NFTproject.com” or “NFT-project.io.” Very tricky!
How to Keep Your Ear to the Ground to Avoid Getting Scammed by a Rug-pull
What do I mean by saying “keep your ear to the ground” with each NFT project? Specifically, I mean, stay tuned to Twitter and the project’s official Discord server for signs that something just doesn’t add up.
Between what you see on Twitter and Discord, you may see signs that the project founders or managers have ill intent or no real plans to follow through on their promises to their NFT community. These are situations where the NFT project may be what is called a “rug-pull,” and this is something you want to avoid.
A rug-pull is a type of scam perpetrated by the founders of a project to raise money from an NFT project and then abandon the project without providing any value to the NFT investors.
When scammers do this, they inevitably leave signs that the project is inauthentic. Detective-like NFT followers of the project will often sniff out the nonsense and sound the alarm to warn others about the suspected scam.
Keeping an eye on Twitter and certain Twitter accounts will help you stay vigilant on which NFT projects may be potential rug-pulls. One of these accounts is @NFTethics, and the owners of this account have a team of people who do due diligence on NFT projects to determine which ones look like rug-pulls, then warn the NFT community through their Twitter posts.
Another Twitter account that will help stay aware of potential rug-pulls is @rugpullfinder, which does similar work to @NFTethics in surfacing potential rug-pull projects on Twitter. You’re welcome to check out this simple guide by @rugpullfinder on the Top 10 Signs of a Rug-Pull.
In addition to keeping an eye on Twitter, you’d be smart to keep a pulse on what is being said on the Discord server of the NFT project.
Some basic Discord signs that indicate that something isn’t quite right are:
- Members of the Discord are posting messages saying “rug” or “scam.”
- Discord members who ask simple questions about the project are banned or silenced by the moderators.
- Too good to be true
How Can You Know if You’re Buying a Real NFT vs. a Fake One?
In order to spot a fake NFT and differentiate it from a real NFT, examine the NFT’s metadata, website, creator, or artist and learn to look for the tell-tale signs of a rug-pull.
By evaluating these four aspects of an NFT, you can start to spot the fakes and disqualify them from your list of investment opportunities.
This will protect you against the many scams in the NFT space and leave you free to invest in exciting and worthwhile projects. Remember, stay hungry, but don’t stay foolish.
Are fake NFTs legal?
The NFT community does not have definite criteria that separate fakes from real NFTs, so there can’t yet be widespread regulation preventing all people from making fake NFTs. Yet, counterfeit NFTs fall under copyright laws, and there are legal moves to make to help combat the problem. I discuss more in this article: Is NFT Art Protected by Copyright Law? (How To Get Sued)
I recently read about a move by the Department of Justice that involved them prosecuting a couple of NFT project founders for wire fraud after the founders blatantly stole the funds from an NFT project for themselves.
This marked a defining moment when the DOJ started prosecuting people for creating fake NFTs.
So, fake NFTs are becoming more illegal with each passing day, as the DOJ sets precedents for what makes an NFT illegal and what will be the punishments for people who create fake NFTs.
Who protects against fake NFTs?
Right now, the DOJ, in combination with the general NFT community, protects prospective NFT buyers from falling prey to fake NFT scams.
Self-motivated sleuths in the NFT community help gather information to show others that a project may be based on a fake NFT, and the DOJ formally prosecutes offenders who try to make off with stacks of NFT money.
Over time, I feel like the collaboration between the DOJ and NFT community will only strengthen, providing much-needed protection and oversight in the NFT space. Still, use the tips in this article to train yourself to look out for fake NFTs and save your money for the real ones.
More Tips
With more education, our NFT communities will become safer and safer. Like anything in the world, it’s all about education. That’s why we have so many articles on this site. We want to share the knowledge and point you in the right direction to help grow the NFT space.
If you are newer to NFTs, I highly suggest checking out these top articles.
- 11 Essential NFT Tips for Beginners
- Do All NFTs Lose Value? The Facts Explained
- 9 Things to Do With NFTs After Buying Them
Good luck out there!!