How to Protect Your NFT assets?
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So, you have made your first NFT purchase. The immediate question in your mind would be, “how to keep NFTs safe?”. The NFT market we have today is best described as the Wild, Wild West. With more and more metaverse platforms being launched with every passing day, NFTs sure are finding a diverse range of use cases. However, the global NFT market at large is still experimental, and there’s little to no regulatory measures implemented. Therefore, it has clearly attracted a lot of bad actors and hackers so far, and it’s only natural for you to want to take extra strict protective measures for your NFT assets.

So, how to keep NFTs safe and away from all scammers? Let’s find some solutions in this post!

First Things First: What are NFTs?
Let’s go through the basics first. NFTs, or non-fungible tokens, are not very different from your usual cryptocurrencies. They are created on blockchains, and the main purpose of the NFT model is to serve as a proof of ownership. Each NFT is unique and cannot be exchanged for another NFT- this is where NFTs primarily vary from crypto like BTC or ETH. Hence the name of the ‘non fungible’ token too.

NFTs can be minted for any asset- namely artwork, manuscripts, photos, videos, in-game goods, real estate, precious metal, and essentially anything under the sun you can think of. For example, Twitter founder Jack Dorsey’s first ever tweet was minted as an NFT and sold for as much as $2.9 million in 2021.

The records of an NFT’s creation, current ownership, and transaction history are recorded on the native blockchain ledger. Most NFTs we have available today are created on the Ethereum blockchain and follow the ERC-721 standard.

For NFT developers, Ethereum is the most popular blockchain for NFTs due to the well-equipped infrastructure the chain brings. However, Ethereum NFT marketplaces can still bring the priciest offerings, since developing on Ethereum itself doesn’t come very cheap. Solana and Tezos are both comparatively cheaper options, however, these blockchains don’t exactly provide the wide variety of NFT marketplaces that Ethereum brings.

Are Your NFTs in Danger of Being Stolen?

As exciting as the NFT sector is right now, your NFTs do still face the risk of getting stolen if you fail to take the required security steps. Here are a few different kinds of cyber-attacks to be wary of:

  • Phishing attacks: Hackers use phishing attacks more often than not to access your NFT wallet. Usually this is done through sending you a malicious link and prompting to enter your login details once you click on that link. This gives the hacker the credentials to access your NFT wallet.
  • Fraudulent NFT projects: This is another popular way for scammers to steal NFTs. Some bad actors usually set up a deceptive NFT project and promote it aggressively across several social media platforms. Once they have enough investors putting their money behind this scam, they disappear with the funds overnight. This kind of attack is also known as a rug-pull scam.
  • Other NFT scams: Other NFT scams that are carried out often include fake biddings, pump-and-dump scams, and even plagiarized/copied NFTs that sell you a copy of an original asset.

How to Keep NFTs Safe: a Few Easy and Secure Methods

The usual online storages we use to keep our NFTs may be susceptible to hacking attacks by scammers. That’s why here are a few alternative storage options you can consider keeping your NFTs secure from scams and hacks:

  • Hard wallets for cold storage: This is a physical device (might look similar to a USB stick) that lets you store your non fungible tokens offline, as opposed to the usual online wallets. This way, no scammer can access your NFTs through the internet. Hardware wallets might just be one of the safest ways to store your NFTs, especially if you plan to hold them for the long term or are creating your collection of highly valued NFTs. Popular hardware wallets you may choose from include Ledger and Trezor. However, you have to be careful to not buy a second-hand wallet, as that might already be compromised.
  • InterPlanetary Files System or IPFS: The InterPlanetary Files System or the IPFS is a decentralized protocol that allows you to store your NFT off-blockchain, again making it difficult for hackers to reach your NFTs. The IPFS makes use of an addressing protocol that is content-based instead of being location-based like general storages. What this signifies is that every time you are putting new content inside the IPFS, it is giving the added item a unique CID or content identifier. This makes the content less vulnerable to hacking attacks than the usual URLs.

With the IPFS system, the CID hashes are kept on your computer, and you get alerted immediately if a hacking attempt is made by anyone. A popular IPFS protocol used by many would be Pinata.

Aside from adopting secure storage options, here are a few mandatory things to keep in mind to protect your virtual non fungible assets:

  • Never click on a link sent to you through messages or emails without verifying the source first. As we mentioned above, this is a widely used way by hackers to launch phishing attacks on your NFTs.
  • This goes without saying, but never share your login credentials, private keys, or seed phrases with anyone or any website ever.
  • To avoid being scammed by a fake project, do thorough research before investing in a particular NFT or a NFT marketplace. Check their history, and additionally find out about the team behind the project.
  • For an additional layer of safety, you can opt for wallets that use security methods like two-factor authentication.

Conclusion:

As time goes by, NFTs are only growing in popularity with an increasing number of investors joining the space. It’s high time for the burgeoning NFT sector to have some regulations implemented by national authorities from all over the globe, so investors have an easier time protecting their assets. As for now, the answer to ‘how to keep NFTs safe’ is still to use highly secure wallet options and keep an eye on your holdings always to note any discrepancies immediately.

Interested in reading more about NFTs? Visit WazirX blog for more content on blockchain, NFTs and crypto.

Also Read | What is DeFi? Popular DeFi protocols


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