Are Cryptocurrencies and NFTs Scams?

by Josh Biggs in Finance on 23rd February 2022

If you aren’t caught up on the topic of cryptocurrency lately, it might come as a surprise just how many news sources and various blogs will talk about NFTs, for better or for worse. NFTs, known as non-fungible tokens, are basically non-interchangeable pieces of data stored in a digital ledger or blockchain. The NFT can point to various files, including photos, video, audio, and much more.

NFTs can be sold and traded, much like any other form of cryptocurrency, though that’s where the trouble begins. Suddenly everyone is talking about NFTs and how they could potentially enrich the career of artists, and you’ll likely see news about people purchasing NFTs left and right — some for millions of dollars. There are even crypto games where NFTs can be sold and traded through gaming. 

For every person singing its praises, you’ll likely find two or three more talking about how cryptocurrency and NFTs, in general, are scams.

What to do if you’ve been scammed

Fortunately, there are still plenty of options for you in the event that you’ve been scammed. Chargeback is all about getting your money returned — specifically if it was a credit card transaction. You can look into My Chargeback review to see how they can help you with your financial dispute and recover your funds.

Why NFTs are seen as a scam

People who are into NFTs will tell you that you can be the proud owner of a unique work of art. However, that digital file’s presence in the blockchain is only a piece of code pointing toward the art file. It’s much too big to place on the blockchain, which is something NFT owners won’t tell you. The actual file can be saved by anyone, and while you might have something in the blockchain calling you the owner, it’s only a receipt and can’t be used for anything outside of trading with other NFT users.

It’s a strange situation where you can only make money from NFTs by selling your own to someone willing to pay more for what you have.

The point of a pyramid scheme

The reason why it’s called a pyramid scheme in the first place is that those at the top will earn, while everyone else at the bottom suffers as a result. It’s the reason why games such as Axie Infinity have new players being entirely dominated by long-time veterans. They purchase the leftover NFTs and are soundly thrashed by the competition, encouraging them to pay more until they eventually have to make that money back, trying to take it from others at the bottom of the ladder.

NFTs are considered a scam because they offer no actual use for anyone who’s never owned an NFT before. As if that wasn’t enough, the process necessary to mine crypto and sustain NFTs is harmful to the environment.

It’s best to avoid NFTs altogether, especially if you have little to no experience. Thankfully, there’s no reason to fret if you feel you’ve been scammed. A bit of research will get you precisely what you need.

Categories: Finance