All You Need to Know About the Metaverse and NFTs

If a time-traveler from the 19th century landed in your living room, you’d likely have a hard time explaining the way our world works – especially the way we deal with finances. Your visitor can watch as you hold an oblong object in your hands and proceed to order a full summer wardrobe, new bedroom furniture or maybe even airline tickets. Who would have imagined we’d be able to do all that and more or without ever touching a dollar bill, coin or even a credit card?

But the changes to the way we handle our money continue, and the world of finance evolves along with technology in the most incredible ways. Let’s take a look at two major innovations in the world of technology and finance, as well as how they may affect us in the very near future: the metaverse and NFTs. 

The Metaverse

What is the metaverse?

The term “metaverse” has generated many curious Google searches since Facebook rebranded itself as Meta in October of 2021. In short, the metaverse is a scaled, interoperable network of real-time rendered 3D virtual worlds that can be experienced simultaneously by an infinite number of users. In addition, the metaverse has continuity of data, which includes identity, objects, communications and payments. In simple English, the metaverse is an all-immersive digital universe where users can live, connect and even make financial transactions through virtual reality and augmented reality. If you played “Second Life,” you’ve already had a taste of this.

Does the metaverse exist?

While some forms of the metaverse already exist, the full experience that tech giants envision likely won’t be ready for consumer use for another five to 10 years. However small aspects of the metaverse, including ultra-fast broadband speeds, online worlds that are always “on” and virtual reality headsets to bring the user into another world are already quite common across the internet and gaming world. 

What are some examples of the metaverse?

Here’s where you can get a feel for what the metaverse is actually about: 

  • Meta. Formerly known as Facebook, the platform’s CEO speaks openly and often about the metaverse and the role Facebook will play in its rollout. 

“The next platform and medium will be even more immersive and embodied than the internet, where you’re in the experience, not just looking at it, and we call this the metaverse,” Zuckerberg said after the company’s rebranding. 

  • Microsoft. Similarly, the software giant has made no secret about where it believes the future of technology lies. Microsoft is already developing mixed and extended reality applications through its Microsoft Mesh platform, which blends the real world with augmented reality and virtual reality. Of course, Xbox Live already connects millions of gamers across the globe in a small-scale metaverse. 

 How will the metaverse affect the world of finance?

Experts envision a world where a consumer can enter a massive virtual shopping mall, purchase a unique digital item and sell that item in a different virtual world, such as on Twitter or eBay. In addition, the expected meteoric rise in popularity of the metaverse creates a unique investment opportunity for the savvy investor. 

NFTs

What are NFTs?

NFTs (non-fungible tokens) are a kind of crypto asset in which each token has a unique value. This is as opposed to “fungible” assets like Bitcoin and dollar bills, which all have exactly the same value. Because every NFT is unique, they can be used to authenticate ownership of digital assets including artworks, recordings and virtual real estate or pets.

How do NFTs work?

NFTs are part of the Ethereum blockchain. Ethereum is a cryptocurrency, like Bitcoin, but its blockchain can support NFTs as well. It’s important to note that other blockchains can easily implement their own versions of NFTs. 

NFTs can be anything digital, like music, videos or drawings, but digital art has been monopolizing NFT trading since its inception. NFT art collecting is not unlike fine art collecting in the real world: Millions of people can buy a Monet print, but only one person can own the original – and pay for it. Similarly, while anyone can own a copy of a digital piece of art, the original can sell for hundreds of thousands of dollars, or in some cases, even millions. The irony here is that while the owner of an authentic Monet has a genuine piece of art, there is no real difference between owning a copy of a digital artwork and owning the original.

As bizarre as it may sound, NFTs are gaining popularity at record speed. A 50-second video by Grimes sold for $390,000, a tweet by the founder of Twitter sold for just under $3 million, and a video by Beeple sold for $6.6 million.

What’s the purpose of NFTs?

NFTs present a world of financial possibilities for artists and collectors alike. 

Digital artists with real talent can earn a pretty penny through NFTs. Instead of posting a creative meme they designed on their Facebook page, digital artists can now try selling their work as an NFT. The good news is the artist will continue enjoying dividends of their work far beyond its sale. Every time the NFT changes hands, the artist gets paid a percentage of the profits. This way, if the work only becomes popular a while after it’s created, the artist can still pocket their share of its ultimate value. 

Collectors can use NFTs to purchase unique digital artwork as a financial asset. A work of art always carries with it the possibility of becoming wildly popular and spiking in value. Digital artwork is no exception. In addition, owning an NFT comes with some basic rights, which include being able to post the image online or use it as a profile picture.

The world of finance is constantly evolving as technology races to stay ahead of current trends and futuristic visions. The metaverse and NFTs are just two mediums that can change the way we handle our finances in the near future. Use the primer here to learn all about these technological wonders so you are better prepared to participate in and invest in the future. 

Your Turn: Do you think the metaverse and NFTs will play a major role in our finances? Why, or why not? Share in the comments. 

Beware Cryptocurrency Scams

As one of the hottest investments on the market, cryptocurrency has been enjoying the spotlight for quite a while, and scammers are eager to cash in on the excitement. Cryptocurrency scams are particularly nefarious since the digital currency is not regulated by any government, and once it has transferred hands it usually cannot be reclaimed. Here’s what you need to know about cryptocurrency scams and how to avoid them. 

How the scams play out 

There are several ways scammers are using cryptocurrency to con people out of their money. 

  • Blackmail. In this ruse, scammers send emails to their targets claiming they have compromising photos, videos, or embarrassing information about them. They threaten to go public with these unless the victim pays up in cryptocurrency. Of course, the scammer is lying about the materials they possess and this is illegal blackmail and extortion.
  • Social media. Here, a target receives a social media message appearing to be from a friend and asking them to send cryptocurrency immediately to help them out of an alleged emergency. If the target complies and sends cryptocurrency to their “friend,” they’ll never see that money again. 
  • Mining. In this scam, bogus websites lure targets into what appear to be opportunities for mining or investing in cryptocurrency. The site may even offer several investment tiers, promising bigger returns for a more significant investment. Unfortunately, any money invested through these sites can never be withdrawn. 
  • Giveaways. These “giveaways” appear to be sponsored by celebrities or big-name cryptocurrency investors, like Elon Musk. Victims are promised exponential returns for small investments in cryptocurrency, or for simply sharing some personal information. Of course, none of it is real, except the loss you’ll experience if you fall victim.
  • Romance. Through online dating sites, scammers convince victims they have met a legitimate love interest. As the “relationship” deepens, the victim’s long-distance date starts talking about fabulous cryptocurrency opportunities with incredible returns. The victim acts upon this advice, and sadly, loses their money to the person they believed was a new romantic partner. 

In each of these scams, the victim has no way of recovering the cryptocurrency they shared if an “investment” has been made. Scammers also use common spoofing technology to make it appear as if they represent a legitimate business or website. As always, when in doubt, opt-out. 

How to spot a cryptocurrency scam

Look out for these red flags to help you avoid cryptocurrency scams: 

  • You’re promised big payouts with guaranteed returns for a small investment in a specific cryptocurrency. 
  • A celebrity or famed cryptocurrency investor is sponsoring a cryptocurrency giveaway.
  • A friend contacts you on social media, claiming they are caught up in an emergency and need immediate rescue, but only through cryptocurrency. 
  • You’re promised free money in cryptocurrency in exchange for sharing some personal information.
  • A caller, new love interest, organization, or alleged government agency insists on payment via cryptocurrency.

Be sure to follow common safety measures when online and never share personal information or money with an unverified contact. If you are unsure whether you’ve actually been contacted by a friend or an authentic business, reach out to them to learn the real deal. Finally, if you’re looking to invest in cryptocurrency, never click on an ad or email; look up secure investment sites like Robinhood and Coinbase on your own.

If you’ve been targeted

If you believe you’ve been targeted by any of the above cryptocurrency scams or a similar scheme, immediately report the scam to the FTC. If the scam was pulled off on social media, let the platform owners know so they can take appropriate measures. Finally, let your friends and family know about the circulating scam.

Cryptocurrency offers unique opportunities for beginner and experienced investors alike, but scammers are exploiting digital currency for their own schemes. Proceed with caution to keep your money and your information safe. 

Your Turn: Have you been targeted by a cryptocurrency scam? Tell us about it in the comments. 

Bitcoin Theft

The FBI is warning of a rise in Bitcoin ransom scams in which scammers use scare tactics and extortion to squeeze money out of victims in the form of Bitcoin payments.

“Fraudsters are leveraging increased fear and uncertainty during the COVID-19 pandemic to steal your money and launder it through the complex cryptocurrency ecosystem,” the FBI warns.

a gold coin etched with the Bitcoin "Capital B with vertical strokes" and circuit traces in the background

Unfortunately, the cryptocurrency payment leaves no room for reclaiming the lost funds. Here’s all you need to know about these scams and how to best protect yourself.

How the scams play out
In some Bitcoin ransom scams, scammers hijack an email address associated with a business website and contact a client of the business. The email informs the victim that a hacker has found a vulnerability in the company’s website and is holding the victim’s data hostage until a Bitcoin payment is made for its release. The victim, fearing monetary loss, may comply with the scammer and make the payment. In reality, though, the scammer has only hacked into the company’s email database. They have no access to the customer’s sensitive information.
While the scammer can hijack any website that has access to clients’ sensitive information, financial institutions like Advantage One Credit Union, are especially vulnerable to this scam. We utilize strict protective measures, like encryption and updated security software to protect our members’ information, but fraudsters may still try to scam members by persuading them that their data is at risk of being exposed.

In another variation of the Bitcoin ransom scam, scammers use “sextortion” to take the victims for money. They’ll claim to have evidence of the victim engaging in questionable internet usage and threaten to share this information with the victim’s contacts unless a ransom payment is made immediately. Some criminals have taken this scam a step further during the COVID-19 pandemic. In addition to the threat of releasing the information they supposedly have on the victim, they’ll also promise to infect the victim and their family with the coronavirus unless a payment is sent to a Bitcoin wallet.

Protect yourself
Fortunately, ransom scams are easy to spot. If you receive an email allegedly sent from a business you use, and it contains a message similar to what’s described above, do not respond. You can contact the company yourself to ask if there has been a data breach. You will likely learn there has not been any sort of breach within the company.

Similarly, if you receive an email threatening to expose your internet usage history and/or to infect you or your family with the coronavirus, do not respond. Mark the email as spam and delete it promptly.

If you’ve been scammed
Unfortunately, cryptocurrency transactions pose an extra risk by being absolutely final. There’s no way to cancel a cryptocurrency payment, back out of a purchase or trace the Bitcoin wallet to its owner.

However, if you believe you’ve been targeted by a Bitcoin ransom scam, you can help prevent others from falling victim by reaching out to the appropriate authorities.

If the scammer posed as representatives of Advantage One Credit Union, be sure to let us know! We’ll send out a warning to all of our members and caution them not to respond to any emails claiming to have hacked our database or to have accessed our members’ sensitive information. If the scammer is posing as a representative of a different company, it’s a good idea to let them know about it, too.

It’s equally important to alert law enforcement agencies about every scam attempt. The FBI’s Criminal Investigative Division has a team that’s dedicated to preventing and fighting cryptocurrency laundering and fraud. If you are the victim of a cryptocurrency scam or you’ve been targeted by one, be sure to contact your local FBI field office or visit the bureau’s Internet Crime Complaint Center . You can also alert the Federal Trade Commission at FTC.gov.

Many people are struggling with financial hardships due to the economic fallout of COVID-19. Unfortunately, scammers are trying to make a difficult time even harder by extorting victims for money. Stay alert and stay safe!

Your Turn:
Have you been targeted by a Bitcoin ransom scam? Tell us about it in the comments.

Learn More:
consumer.ftc.gov
bitcoin.com
fbi.gov