Following its introduction to the mainstream market, the demand for non-fungible tokens (NFTs) has grown exponentially. NFT sales reached a staggering $25 billion in 2021, attesting to the industry’s meteoric rise. New users and crypto enthusiasts alike have shown an interest in NFTs. But one should not randomly invest in an NFT project for fear of missing out or because celebrities like Paris Hilton and Jay-Z invested in NFT collections like Bored Ape Yacht Club and CryptoPunks. As with any industry, making discretionary purchases in the NFT world is key to ensuring the value and safety of your investments.
The rising popularity of NFTs has also attracted hackers, scammers, and other malicious actors. With some high-end NFTs selling for millions of dollars, protecting these valuables should be a top priority for anyone looking to invest in the market. This article will cover how to store NFTs and secure your NFTs afterward.
The attack on NFTs
It is no surprise that scammers are looking to cash in on the NFT craze. The good news is that you can avoid falling victim to NFT scams simply by being conscious of the most common ones. Most people would believe that NFTs are inherently safe because they are held in crypto wallets and use blockchain technology for transactions. However, NFT owners are susceptible to the same NFT security issues that plague cryptocurrency investors.
Before diving into best security practices to keep your collectibles safe, let us look at the many risks surrounding NFTs.
Phishing
Phishing is the most common method used by cybercriminals to steal sensitive information, including NFT account credentials. They do this by disseminating malicious links via email or popular online platforms like Twitter and Discord. When you click the link and enter your information, hackers employ keyloggers or malware to access and compromise your account.
There has been a noticeable increase in NFT phishing attempts. For instance, in February 2022, fraudsters successfully used a phishing attack on OpenSea, the most widely used NFT platform, to steal roughly $1.7 million worth of NFTs. OpenSea prompted investors to update their contact information, but fraudsters used the trading platform’s email template to trick NFT owners into visiting fake websites.
Bidding Scams
Bidding scams happen while selling NFTs on the secondary market. When you list your NFT for sale, fraudsters will post the highest price, and you will want to sell it to them. But these scammers can switch the cryptocurrency being bid without the seller knowing it.
Let us say an imposter bids 20 Ether on your NFT artwork. You could expect to get roughly $24,000 in payment (per the going rate at the time of writing). However, a clever scammer can swap the cryptocurrency for 50 Dogecoin, which is worth less than five dollars.
To protect yourself from fraud, ensure you know precisely which cryptocurrency is being used to pay you, and never accept an offer lower than the one you agreed upon in the bidding process.
Fake customer support
This is a phishing scheme in which criminals act as representatives of an NFT marketplace and trick users into sending them money or their NFT assets. They will often try to resolve an issue with your account via a social networking platform. Then, pretending to be helpful, they will email you a link to a fake NFT marketplace where you will be asked to input your private wallet keys.
Generally, it would be best to ignore customer service inquiries that do not come via an NFT marketplace’s verified channel. If you need help, be sure to use the appropriate channels provided by your NFT marketplace.
Fake influencer accounts
Common fraud tactics include transposing or altering the spelling of an influencer’s social media accounts by adding an extra letter, symbol, or number. These fake accounts often make an offer through a direct message and try to steal your NFT asset. To avoid this trap, verify the account’s followers, posting history, and content before interacting.
Twitter is particularly popular for this attack because most NFT promotions and influencers are on the platform. Investors should use extreme caution when interacting with any Twitter account, even if they are verified and have hundreds of thousands of followers.
Malicious NFT marketplaces
When making an online purchase, you most likely search for the desired item and select a marketplace from the many results returned. But how can you tell if a particular market can be trusted? To avoid being taken advantage of by scammers, most stick to well-known brands and reputable websites.
The same holds for each NFT market you may discover when selling your NFTs. Never begin using an NFT platform without first doing your research. Hackers often create phony NFT trading platforms to steal NFTs from the accounts of unwary users. Putting your security seed phrase or private keys on a shady NFT marketplace leaves you vulnerable to having your whole digital wallet emptied.
Always buy and sell NFTs from legitimate and popular platforms like the ByteX NFT platform and Opensea.
Malware
You need to keep an eye out for any signs of malware. Because NFT systems are still relatively new, there may be several undiscovered vulnerabilities that hackers can exploit.
Cybercriminals have used a technique known as “airdropping” to transmit malware. When an NFT is airdropped, it is sent free of charge to a cryptocurrency wallet. NFT artists occasionally resort to this method to get the word out about their latest or future works. Meanwhile, fraudsters can drop malware on unsuspecting victims through airdrop by appearing as an NFT.
If you accept an NFT airdrop without verifying the sender, dangerous malware might infiltrate your wallet and steal your private keys, seed phrases, and other sensitive information. Always protect yourself from malicious software using antivirus and other cybersecurity software.
How to keep NFTs safe
Now that you know how attackers can try to steal your precious collectibles, it’s time to look at how you can secure your NFTs:
Use hardware wallets
Before buying an NFT, you must understand how to store NFTs. For safe and easy access to your NFTs, you may use a hardware wallet, a dedicated piece of hardware containing your private keys. Keeping your private keys in this way is far safer than doing it on a computer or mobile device, where they would be vulnerable to remote hacking.
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Moreover, the fact that hardware wallets need two-factor authentication (2FA) for transactions further increases their security. Because of this, if someone managed to steal your wallet, they would still be unable to make a transaction without entering a code delivered to your phone.
Last but not least, hardware wallets are created to be user-friendly so that anybody can use them to store their NFTs securely and safely.
Strong passwords and 2FA
Now, you must be wondering how to protect your NFT wallet. Safeguarding your NFT wallet from unwanted access requires the use of strong passwords. Passwords that are too simple to guess or crack open the door to theft and fraud. Use a mix of capital and lowercase letters, numbers, and symbols (at least 8 characters in length) to make a secure password.
With two-factor authentication (2FA), users are asked for not one but two different pieces of information to access their accounts. This could be a text message, email, or biometric scan of fingerprints or face recognition. Two-factor authentication is an added layer of security that can thwart hackers even if they have your username and password.
Check your website addresses
A non-secure website should not be trusted with sensitive information like your name, address, or credit card number. Check that the site’s address begins with “https://” rather than just “http://” to ensure it is secure. The letter “s” stands for secure, which implies that any information you input on the website will be secured and safe from hackers.
A padlock icon or green bar indicating an extended validity certificate are two more security features worth looking for. These features point to a reputable website where your information will be safeguarded.
Antivirus
Antivirus applications actively seek out and remove malicious programs, including viruses, worms, Trojan horses, and other forms of malware. It is also helpful in warding off phishing attacks.
All devices, including those used for NFT transactions, should have antivirus software installed. As a result, any harmful software accidentally downloaded onto your computer will be quickly identified and removed. Antivirus programs can also warn you if the website you are visiting often has been known to have viruses.
Keep devices updated
Constant updates are released for operating systems to address security flaws and correct bugs. Failure to install critical security updates for your operating system leaves you vulnerable to attacks. It is vital to keep all of your computer’s apps updated regularly. Many applications have security updates and bug fixes that must be installed to provide the best possible security.
Back up your data
NFTs are susceptible to loss and theft, just like any other digital asset. Your NFT data will be irretrievably lost if you do not back it up regularly. Most wallets and exchanges have a simple backup process. Always export the private key for your wallet or exchange account. If something happens to your primary wallet or exchange account, you will still be able to access your assets.
Always keep copies of your data in more than one safe location. For instance, you could save one copy on an external hard drive, one on a USB stick, and another in cloud storage. That way, even if one copy is lost or stolen, you still have two other secure copies.
How to transfer NFTs from a compromised wallet
If your NFT wallet is compromised, there is very little chance you will be able to retrieve your NFT assets. Most NFT transactions are irreversible and don’t allow users to reverse transactions.
This is specifically why you should take extreme care when it comes to securing your NFT assets. Always store your NFTs in a hardware wallet and use reliable platforms like ByteX and OpenSea to make your NFT purchases.
Closing note
NFTs provide tremendous upside potential to all sorts of digital artists. However, it should be noted that this new space offers a perfect environment for scammers and crooks. That being said, taking adequate care to secure your digital assets while also keeping a watch out for scammers will ensure you do not have to experience the disappointment of losing your precious NFTs.
Important Disclosures:
Certain statements in this document might be forward-looking statements, including those identified by the expressions “anticipate”, “believe”, “plan”, “estimate”, “expect”, “intend”, “target”, “seek”, “will” and similar expressions to the extent they relate to the material produced by Bytex staff member. Forward-looking statements are not historical facts but reflect the current expectations regarding future results or events. Such forward-looking statements reflect current beliefs and are based on information currently available to them. Forward-looking statements are made with assumptions and involve significant risks and uncertainties. Although the forward-looking statements contained in this document are based upon assumptions the author of the material believes to be reasonable, none of Bytex’s staff can assure potential participants and investors that actual results will be consistent with these forward-looking statements. As a result, readers are cautioned not to place undue reliance on these statements as a number of factors could cause actual results or events to differ materially from current expectations
The commentaries contained herein are provided as a general source of information based on information available as of MMMM DD, 2022. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change investment decisions arising from the use or relevance of the information contained here. ByteX. makes no representation or warranty to any participant regarding the legality of any investment, the income or tax consequences, or the suitability of an investment for such investor. Prospective participants must not rely on this document as part of any assessment of any potential participation in buying and selling of virtual currency assets and should not treat the contents of this document as advice relating to legal, taxation, financial, or investment matters. Participants are strongly advised to make their own inquiries and consult their own professional advisers as to the legal, tax, accounting, and related matters concerning the acquisition, holding, or disposal of a virtual currency. All content is original and has been researched and produced by ByteX.