NFT’s is are an Extremely Risky Investment. High Risk, High Reward is at play here.
That being said, there are ways to minimize risks and as an NFT trader you have to prioritize security.
Unlike cryptocurrencies where you can simply keep them on an exchange, NFT’s for the most part, need to be kept on a Private Wallet.
Metmask is the most popular choice but there are many mobile wallets, cold wallets, etc that can do the job. With assets of so much value kept on a simple device, it is more important than ever to keep your private keys 100% safe!
Along with this, keeping your assets spread among multiple wallets minimizes the risk of losing everything in the case of a hacking event.
Double Check Over the Counter Transactions
Trading NFT’s over the counter rarely needs to happen these days. Before, the only choice for Decentraland land owners to sell their land was to find a willing buyer who’d transfer the MANA first and trust the seller enough to send the land.
You can imagine the risks here….
Surprisingly I never have been scammed from 100’s of deals BUT the risk was always there and others DID get scammed.
The only way I’d do these transactions is if,
Seller was a known and trusted member. Others could vouch for them.
They were an active member of the community and they 100% owned that wallet.
They were willing to send land by land. I’d never send 100% of my money up front. Maybe 2% of it in exchange for one land to make sure seller is legit.
Have an escrow who’s a trusted member if I really didn’t trust the seller.
This was the old days but now we have some awesome tools that can help us conduct private deals.
OpenSea allows for private deals so you can set only 1 address to be able to make the purchase to your listing.
From private deal requests to free giveaways, crypto is full of it and NFT’s aren’t an exception.
This is something you will become more aware of knowing as you spend more time in the NFT industry.
Death Distribution Plan
I’ve never seen anyone discuss this but what will happen to your assets if you pass away?
10’s of thousands of dollars worth of digital tokens no one will know what to do with if they inherit. I still haven’t figured this out but have a plan to give it to a trusted member and a process on how to liquidate assets at a comfortable price.