NFT Art NFT Security and Best Practices 2

Question 1

What is a 'rug pull' in the context of NFT art projects?

Accepted Answer

When project developers abandon the project after raising funds

Answer

A rug pull occurs when NFT project creators collect funds from buyers then disappear, leaving investors with worthless tokens.

Question 2

Which type of wallet storage is considered most secure for holding high-value art NFTs long-term?

Accepted Answer

Hardware wallet (cold storage)

Answer

Hardware wallets store private keys offline, making them immune to online hacking attempts and the safest option for long-value NFT storage.

Question 3

What does 'doxxing' mean in the NFT art community, and why is it a security concern?

Accepted Answer

Publishing an artist's real identity publicly without consent

Answer

Doxxing exposes a creator's or collector's real-world identity, which can lead to harassment, theft targeting, or physical danger.

Question 4

Why should NFT art buyers verify contract addresses directly on a blockchain explorer before purchasing?

Accepted Answer

To confirm the contract is the legitimate one and not a copycat

Answer

Scammers create fake contracts mimicking popular collections; verifying on a blockchain explorer confirms you're buying from the authentic contract.

Question 5

What is 'wash trading' in the NFT art market?

Accepted Answer

Artificially inflating NFT prices by buying and selling between controlled wallets

Answer

Wash trading involves a seller buying their own NFTs through different wallets to create fake price history and manipulate perceived value.

NFT - Art Practice Test