Non-fungible tokens: Difference between revisions
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{{Incomplete|Issue 1=Needs some sources added, some replaced with more reputable sources|Issue 2=Potential section - Genericide - See discuss tab for details}} | {{Incomplete|Issue 1=Needs some sources added, some replaced with more reputable sources|Issue 2=Potential section - Genericide - See discuss tab for details}} | ||
'''Non-fungible tokens''' (also referred to as 'NFTs' or simply 'tokens') are a type of media centered around purely digital ownership backed through [[cryptocurrency]] infrastructure. Ownership of NFTs are however, reliant on the maintenance of the systems these tokens are designed for, and often due to either the usage of pump and dump schemes or neglect of these systems, ownership of these tokens becomes effectively useless, or worse, [[Quidd|ownership of these NFTs are voided]]. What exactly is owned is also questionable as many users may associate the media itself as the NFT, however due to the large size of many media formats, NFTs are commonly just links to the media, not the media itself. <ref>{{Cite web |date=December 21, 2021 |title=Right Clicking All The NFTs |url=https://www.youtube.com/watch?v=i_VsgT5gfMc |access-date=August 17, 2025 |website=youtube.com}}</ref> | '''Non-fungible tokens''' (also referred to as 'NFTs' or simply 'tokens') are a type of media centered around purely digital ownership backed through [[cryptocurrency]] infrastructure. Ownership of NFTs are however, reliant on the maintenance of the systems these tokens are designed for, and often due to either the usage of pump and dump schemes or neglect of these systems, ownership of these tokens becomes effectively useless, or worse, [[Quidd|ownership of these NFTs are voided]]. What exactly is owned is also questionable as many users may associate the media itself as the NFT, however due to the large size of many media formats, NFTs are commonly just links to the media, not the media itself. <ref>{{Cite web |date=December 21, 2021 |title=Right Clicking All The NFTs |url=https://www.youtube.com/watch?v=i_VsgT5gfMc |access-date=August 17, 2025 |website=youtube.com |archive-url=https://preservetube.com/watch?v=i_VsgT5gfMc |archive-date=23 Feb 2026}}</ref> | ||
==How it works== | ==How it works== | ||
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====Plagiarism==== | ====Plagiarism==== | ||
As there are a lack of measures to verify the authenticity of media ownership when minting NFTs, especially when these tokens are associated with its own custom cryptocurrency, there is a common pattern of these users claiming the content of others for the purposes of minting their own tokens.<ref name=":1">{{Cite web |date=Oct 1, 2022 |title=Common NFT Scams: Duplicated or Plagiarized NFTs |url=https://notcommon.com/articles/common-nft-scams-duplicated-or-plagiarized-nfts |access-date=Jun 13, 2025 |website=Not Common}}</ref><ref>{{Cite news |last=Bailey |first=Johnathan |date=Mar 16, 2021 |title=NFTs and Copyright |url=https://www.plagiarismtoday.com/2021/03/16/nfts-and-copyright/ |access-date=Jun 13, 2025 |work=Plagarism Today}}</ref> [[OpenSea]]'s '[[OpenSea lazy minting|lazy minting]]' provides an easy model for malicious actors to freely mint these tokens and profit off of the effort of artists with zero financial investment.<ref>{{Cite web |date=Feb 8, 2022 |title=Plagiarism, Theft, And Scams: The Daily Problem Of Artists In The NFT Era |url=https://www.nfthubble.com/plagiarism-theft-and-scams-the-daily-problem-of-artists-in-the-nft-era/ |access-date=Jun 13, 2025 |website=NFT Hubble}}</ref> Alternatively, malicious actors could mint NFTs that are clones of the visual assets of existing tokens.<ref name=":1" /> | As there are a lack of measures to verify the authenticity of media ownership when minting NFTs, especially when these tokens are associated with its own custom cryptocurrency, there is a common pattern of these users claiming the content of others for the purposes of minting their own tokens.<ref name=":1">{{Cite web |date=Oct 1, 2022 |title=Common NFT Scams: Duplicated or Plagiarized NFTs |url=https://notcommon.com/articles/common-nft-scams-duplicated-or-plagiarized-nfts |access-date=Jun 13, 2025 |website=Not Common |archive-url=http://web.archive.org/web/20251020211632/https://notcommon.com/articles/common-nft-scams-duplicated-or-plagiarized-nfts |archive-date=20 Oct 2025}}</ref><ref>{{Cite news |last=Bailey |first=Johnathan |date=Mar 16, 2021 |title=NFTs and Copyright |url=https://www.plagiarismtoday.com/2021/03/16/nfts-and-copyright/ |access-date=Jun 13, 2025 |work=Plagarism Today |archive-url=http://web.archive.org/web/20251127214832/https://www.plagiarismtoday.com/2021/03/16/nfts-and-copyright/ |archive-date=27 Nov 2025}}</ref> [[OpenSea]]'s '[[OpenSea lazy minting|lazy minting]]' provides an easy model for malicious actors to freely mint these tokens and profit off of the effort of artists with zero financial investment.<ref>{{Cite web |date=Feb 8, 2022 |title=Plagiarism, Theft, And Scams: The Daily Problem Of Artists In The NFT Era |url=https://www.nfthubble.com/plagiarism-theft-and-scams-the-daily-problem-of-artists-in-the-nft-era/ |access-date=Jun 13, 2025 |website=NFT Hubble |archive-url=http://web.archive.org/web/20251021000215/https://www.nfthubble.com/plagiarism-theft-and-scams-the-daily-problem-of-artists-in-the-nft-era/ |archive-date=21 Oct 2025}}</ref> Alternatively, malicious actors could mint NFTs that are clones of the visual assets of existing tokens.<ref name=":1" /> | ||
This lack of authenticity in minting tokens means that users may unwittingly invest in offending NFTs on platforms such as [[OpenSea]] and lose the token they paid for due to a DMCA from the author. | This lack of authenticity in minting tokens means that users may unwittingly invest in offending NFTs on platforms such as [[OpenSea]] and lose the token they paid for due to a DMCA from the author. | ||
====Pump-and-dump==== | ====Pump-and-dump==== | ||
Frequently, NFT projects, much like the cryptocurrencies that back them,<ref>{{Cite news |last=Gonzalez |first=Oscar |date=Aug 6, 2021 |title=Cryptocurrency pump-and-dump schemes: What you should know about these scams |url=https://www.cnet.com/personal-finance/crypto/cryptocurrency-pump-and-dump-schemes-what-you-should-know-about-these-scams/ |access-date=Jun 13, 2025 |work=CNET}}</ref> will face pump-and-dump schemes, wherein the creator of the token, or a group of malicious actors, will attempt to inflate the value of the NFTs they own, and essentially scam users via tactics such as [[Fear of missing out|FOMO]] to have said users invest in tokens from the promoted collection, thus inflating the value of the product, before the actor(s) attempt to quickly dump the tokens they own onto the market, causing the value to quickly tank,<ref>{{Cite web |date=Dec 8, 2023 |title=Pump and Dump Schemes in NFTs |url=https://immunebytes.com/blog/pump-and-dump-schemes-in-nfts/ |access-date=Jun 13, 2025 |website=Immune Bytes}}</ref><ref>{{Cite news |last=Castor |first=Amy |title=Here's why NFTs are crypto's latest pump-and-dump scheme designed to make crypto insiders rich |url=https://www.businessinsider.com/nfts-cryptos-scheme-value-pump-and-dump-2021-6?op=1 |access-date=Jun 13, 2025 |work=Business Insider}}</ref><ref>{{Cite news |last=Itimi |first=Stephanie |date=Jan 26, 2023 |title=Pump-and-Dump NFT Scams: The Do’s & Don’ts |url=https://medium.com/protegr/pump-and-dump-nft-scams-the-dos-don-ts-f87076cd2dd1 |access-date=Jun 13, 2025 |work=Medium}}</ref> harming all unaware parties in the process. | Frequently, NFT projects, much like the cryptocurrencies that back them,<ref>{{Cite news |last=Gonzalez |first=Oscar |date=Aug 6, 2021 |title=Cryptocurrency pump-and-dump schemes: What you should know about these scams |url=https://www.cnet.com/personal-finance/crypto/cryptocurrency-pump-and-dump-schemes-what-you-should-know-about-these-scams/ |access-date=Jun 13, 2025 |work=CNET |archive-url=http://web.archive.org/web/20260209130344/https://www.cnet.com/personal-finance/crypto/cryptocurrency-pump-and-dump-schemes-what-you-should-know-about-these-scams/ |archive-date=9 Feb 2026}}</ref> will face pump-and-dump schemes, wherein the creator of the token, or a group of malicious actors, will attempt to inflate the value of the NFTs they own, and essentially scam users via tactics such as [[Fear of missing out|FOMO]] to have said users invest in tokens from the promoted collection, thus inflating the value of the product, before the actor(s) attempt to quickly dump the tokens they own onto the market, causing the value to quickly tank,<ref>{{Cite web |date=Dec 8, 2023 |title=Pump and Dump Schemes in NFTs |url=https://immunebytes.com/blog/pump-and-dump-schemes-in-nfts/ |access-date=Jun 13, 2025 |website=Immune Bytes |archive-url=http://web.archive.org/web/20260209022950/https://immunebytes.com/blog/pump-and-dump-schemes-in-nfts/ |archive-date=9 Feb 2026}}</ref><ref>{{Cite news |last=Castor |first=Amy |title=Here's why NFTs are crypto's latest pump-and-dump scheme designed to make crypto insiders rich |url=https://www.businessinsider.com/nfts-cryptos-scheme-value-pump-and-dump-2021-6?op=1 |access-date=Jun 13, 2025 |work=Business Insider |archive-url=http://web.archive.org/web/20260215220813/https://www.businessinsider.com/nfts-cryptos-scheme-value-pump-and-dump-2021-6?op=1 |archive-date=15 Feb 2026}}</ref><ref>{{Cite news |last=Itimi |first=Stephanie |date=Jan 26, 2023 |title=Pump-and-Dump NFT Scams: The Do’s & Don’ts |url=https://medium.com/protegr/pump-and-dump-nft-scams-the-dos-don-ts-f87076cd2dd1 |access-date=Jun 13, 2025 |work=Medium |archive-url=http://web.archive.org/web/20251017214242/https://medium.com/protegr/pump-and-dump-nft-scams-the-dos-don-ts-f87076cd2dd1 |archive-date=17 Oct 2025}}</ref> harming all unaware parties in the process. | ||
===Ownership=== | ===Ownership=== | ||
NFTs can be associated with content beyond just a link to a JPEG file, such as items and cosmetics for games. However, despite the tokens themselves persisting on exchanges if they are minted with non-custom cryptocurrencies, users can be rugpulled, either intentionally<ref name=":2">{{Cite web |last=Biase |first=Nicholas |date=Mar 24, 2022 |title=Two Defendants Charged In Non-Fungible Token (“NFT”) Fraud And Money Laundering Scheme |url=https://www.justice.gov/usao-sdny/pr/two-defendants-charged-non-fungible-token-nft-fraud-and-money-laundering-scheme-0 |access-date=Jun 13, 2025 |website=United States Attorney Office - Southern District of New York}}</ref> or through neglect,<ref>{{Cite news |last=Hitchcock |first=Logan |date=May 2, 2025 |title='The Walking Dead' Ethereum NFT Game Is About to Be Killed Off |url=https://decrypt.co/317687/the-walking-dead-ethereum-nft-game-is-about-to-be-killed-off |access-date=Jun 13, 2025 |work=Decrypt.co}}</ref> and have the products they paid for as NFTs be rendered effectively useless. Particularly in the NFT gaming space, this introduces concerns with [[right to own]], as companies such as [[Electronic Arts]] and [[Ubisoft]] attempt to produce NFT games, with some that end with excessively short lifespans<ref>{{Cite news |last=Klotz |first=Johnathan |date=Nov 5, 2024 |title=Ubisoft's New Pay-To-Win Game is So Broken No One Can Play It |url=https://hardcoregamer.com/ubisofts-new-pay-to-win-game-is-so-broken-no-one-can-play-it/ |access-date=Jun 13, 2025 |work=Hardcore Gamer}}</ref><!-- Might cite this one too: | NFTs can be associated with content beyond just a link to a JPEG file, such as items and cosmetics for games. However, despite the tokens themselves persisting on exchanges if they are minted with non-custom cryptocurrencies, users can be rugpulled, either intentionally<ref name=":2">{{Cite web |last=Biase |first=Nicholas |date=Mar 24, 2022 |title=Two Defendants Charged In Non-Fungible Token (“NFT”) Fraud And Money Laundering Scheme |url=https://www.justice.gov/usao-sdny/pr/two-defendants-charged-non-fungible-token-nft-fraud-and-money-laundering-scheme-0 |access-date=Jun 13, 2025 |website=United States Attorney Office - Southern District of New York |archive-url=http://web.archive.org/web/20260222084943/https://www.justice.gov/usao-sdny/pr/two-defendants-charged-non-fungible-token-nft-fraud-and-money-laundering-scheme-0 |archive-date=22 Feb 2026}}</ref> or through neglect,<ref>{{Cite news |last=Hitchcock |first=Logan |date=May 2, 2025 |title='The Walking Dead' Ethereum NFT Game Is About to Be Killed Off |url=https://decrypt.co/317687/the-walking-dead-ethereum-nft-game-is-about-to-be-killed-off |access-date=Jun 13, 2025 |work=Decrypt.co |archive-url=http://web.archive.org/web/20251210015925/https://decrypt.co/317687/the-walking-dead-ethereum-nft-game-is-about-to-be-killed-off |archive-date=10 Dec 2025}}</ref> and have the products they paid for as NFTs be rendered effectively useless. Particularly in the NFT gaming space, this introduces concerns with [[right to own]], as companies such as [[Electronic Arts]] and [[Ubisoft]] attempt to produce NFT games, with some that end with excessively short lifespans<ref>{{Cite news |last=Klotz |first=Johnathan |date=Nov 5, 2024 |title=Ubisoft's New Pay-To-Win Game is So Broken No One Can Play It |url=https://hardcoregamer.com/ubisofts-new-pay-to-win-game-is-so-broken-no-one-can-play-it/ |access-date=Jun 13, 2025 |work=Hardcore Gamer |archive-url=http://web.archive.org/web/20260207164229/https://hardcoregamer.com/ubisofts-new-pay-to-win-game-is-so-broken-no-one-can-play-it/ |archive-date=7 Feb 2026}}</ref><!-- Might cite this one too: | ||
https://www.cbr.com/ubisoft-nft-game-controversy/ --> and inflame the problems caused by [[predatory microtransactions]]. | https://www.cbr.com/ubisoft-nft-game-controversy/ --> and inflame the problems caused by [[predatory microtransactions]]. | ||
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Non-fungible tokens (also referred to as 'NFTs' or simply 'tokens') are a type of media centered around purely digital ownership backed through cryptocurrency infrastructure. Ownership of NFTs are however, reliant on the maintenance of the systems these tokens are designed for, and often due to either the usage of pump and dump schemes or neglect of these systems, ownership of these tokens becomes effectively useless, or worse, ownership of these NFTs are voided. What exactly is owned is also questionable as many users may associate the media itself as the NFT, however due to the large size of many media formats, NFTs are commonly just links to the media, not the media itself. [1]
How it works
Non-fungible tokens are centered around a digital code that proves ownership over a form of media, commonly an image,[2] and often cryptocurrency infrastructure, also referred to as the blockchain, handles the data behind who owns these codes.[2] The most common cryptocurrency NFTs are associated with is Etherium,[2] however later NFT projects would crop up with its own cryptocurrencies to handle the tokens.[citation needed]
Why it is a problem
Fraud
Often, many NFTs are generated with the exclusive intent to generate revenue,[citation needed - check comment] and as there are no regulations established within the NFT market, tokens can be minted fraudulently through various means.
Plagiarism
As there are a lack of measures to verify the authenticity of media ownership when minting NFTs, especially when these tokens are associated with its own custom cryptocurrency, there is a common pattern of these users claiming the content of others for the purposes of minting their own tokens.[3][4] OpenSea's 'lazy minting' provides an easy model for malicious actors to freely mint these tokens and profit off of the effort of artists with zero financial investment.[5] Alternatively, malicious actors could mint NFTs that are clones of the visual assets of existing tokens.[3]
This lack of authenticity in minting tokens means that users may unwittingly invest in offending NFTs on platforms such as OpenSea and lose the token they paid for due to a DMCA from the author.
Pump-and-dump
Frequently, NFT projects, much like the cryptocurrencies that back them,[6] will face pump-and-dump schemes, wherein the creator of the token, or a group of malicious actors, will attempt to inflate the value of the NFTs they own, and essentially scam users via tactics such as FOMO to have said users invest in tokens from the promoted collection, thus inflating the value of the product, before the actor(s) attempt to quickly dump the tokens they own onto the market, causing the value to quickly tank,[7][8][9] harming all unaware parties in the process.
Ownership
NFTs can be associated with content beyond just a link to a JPEG file, such as items and cosmetics for games. However, despite the tokens themselves persisting on exchanges if they are minted with non-custom cryptocurrencies, users can be rugpulled, either intentionally[10] or through neglect,[11] and have the products they paid for as NFTs be rendered effectively useless. Particularly in the NFT gaming space, this introduces concerns with right to own, as companies such as Electronic Arts and Ubisoft attempt to produce NFT games, with some that end with excessively short lifespans[12] and inflame the problems caused by predatory microtransactions.
Examples
This section is incomplete. This notice can be deleted once all the placeholder text has been replaced.
Some predatory examples of NFTs include:
- Frosties - A NFT game project which rug-pulled investors, and incurred $1.3M in fines from the DOJ.[10]
References
- ↑ "Right Clicking All The NFTs". youtube.com. December 21, 2021. Archived from the original on 23 Feb 2026. Retrieved August 17, 2025.
- ↑ 2.0 2.1 2.2 McCormack, Jon (May 3, 2021). "The paradox of NFTs: What are people actually paying for?". Monash University. Retrieved Jun 13, 2025.
- ↑ 3.0 3.1 "Common NFT Scams: Duplicated or Plagiarized NFTs". Not Common. Oct 1, 2022. Archived from the original on 20 Oct 2025. Retrieved Jun 13, 2025.
- ↑ Bailey, Johnathan (Mar 16, 2021). "NFTs and Copyright". Plagarism Today. Archived from the original on 27 Nov 2025. Retrieved Jun 13, 2025.
- ↑ "Plagiarism, Theft, And Scams: The Daily Problem Of Artists In The NFT Era". NFT Hubble. Feb 8, 2022. Archived from the original on 21 Oct 2025. Retrieved Jun 13, 2025.
- ↑ Gonzalez, Oscar (Aug 6, 2021). "Cryptocurrency pump-and-dump schemes: What you should know about these scams". CNET. Archived from the original on 9 Feb 2026. Retrieved Jun 13, 2025.
- ↑ "Pump and Dump Schemes in NFTs". Immune Bytes. Dec 8, 2023. Archived from the original on 9 Feb 2026. Retrieved Jun 13, 2025.
- ↑ Castor, Amy. "Here's why NFTs are crypto's latest pump-and-dump scheme designed to make crypto insiders rich". Business Insider. Archived from the original on 15 Feb 2026. Retrieved Jun 13, 2025.
- ↑ Itimi, Stephanie (Jan 26, 2023). "Pump-and-Dump NFT Scams: The Do's & Don'ts". Medium. Archived from the original on 17 Oct 2025. Retrieved Jun 13, 2025.
- ↑ 10.0 10.1 Biase, Nicholas (Mar 24, 2022). "Two Defendants Charged In Non-Fungible Token ("NFT") Fraud And Money Laundering Scheme". United States Attorney Office - Southern District of New York. Archived from the original on 22 Feb 2026. Retrieved Jun 13, 2025.
- ↑ Hitchcock, Logan (May 2, 2025). "'The Walking Dead' Ethereum NFT Game Is About to Be Killed Off". Decrypt.co. Archived from the original on 10 Dec 2025. Retrieved Jun 13, 2025.
- ↑ Klotz, Johnathan (Nov 5, 2024). "Ubisoft's New Pay-To-Win Game is So Broken No One Can Play It". Hardcore Gamer. Archived from the original on 7 Feb 2026. Retrieved Jun 13, 2025.