November 28, 2022

NFT Hacking? Here is How to protect your NFT from theft

NFT Hacking? Here is How to protect your NFT from theft:

NFT Hacking? Here is How to protect your NFT from theft

Over the years, the NFT industry has witnessed a dramatic increase. As a result, it is fast becoming the most discussed topic in blockchain technology and social media. This has placed NFT as a hot commodity filled with speculators and investors. As a quick refresher, a Non-fungible Token is a digital cryptographic asset on the blockchain. It represents real-world objects such as art, images, tweets, memes, games, and videos with unique identification codes and metadata.

With such enormous capital entering this industry, NFTs have become very attractive to millions of artists, investors. But unfortunately, criminals and fraudsters around the world also delve into the market. Artists earning crypto through NFT sales are now becoming potential targets for the ‘bad guys.’ As a result, there have been numerous theft attacks. One of the most recent hack tales worth mentioning is the phishing attack on OpenSea – the most popular NFT marketplace. It happened in February 2022, which led to at least 32 users losing their NFTs worth $1.7 million.

How can you protect your NFT from Theft?

NFT assets, just like cryptocurrencies, must be protected from theft, fake copies, or hacking. Here are four steps to reduce the chances of getting heartbreak from losing your creations to fraudsters and hackers.

1. Use a non-custodial wallet

A custodial wallet is one where a third party manages the private key However, a non-custodial wallet is a wallet where only the owner possesses and controls the private keys. Simply put, it lets you be your own bank. This wallet is ultimately protected by a 12-24 word seed phrase and a combination of touch identification and passwords.

Nevertheless, merely using a hot wallet would not ultimately secure your asset from malware or phishing scams. To fully secure your wallet, make sure your seed phrase remains a secret. If your wallet is compromised and the NFT is transferred to another wallet, there is little or no resort. This is because the transactions are irreversible and pseudonymous.

2. Create a very strong password

If you must use a password, protect it. Afterward, encrypt it. It is important to avoid using obvious names for the note or filename. This password should be kept in an unusual place and mix up the order in a way only you will remember. Your password should be a tricky blend of letters (upper and lowercase), numbers, and symbols. Also, ensure to change your password frequently.

3. Beware of fake minting sites on discord or Twitter.

These fake minting sides have dominated the market. Unfortunately, they tend to appear similar to the real sites. It is crucial to not click unverified links, popularly called ‘deadlinks’. With a single click, your wallet security can be compromised and all NFT investments can disappear in a second. Even popular marketplaces have fake website links on the web, and you must cross check before signing into these bogus websites. In fact, it is best to not click discord dm links until you are certain of the sender and the purpose.

4. Verify the marketplaces and identity of buyers and sellers

There are a lot of attractive offers that can come your way. Hence make sure you deal wisely with potential buyers or investors by always verifying the identity of buyers or sellers. It is crucial to only use trustworthy NFT marketplaces for transactions with your crypto wallet and NFT. Examples are Opensea, Axie, or Rarible. You may receive fake notifications and emails from these marketplaces, and this implies a need to be highly suspicious of links.

In conclusion, the NFT industry is flourishing. NFT sales in just the first half of 2021 totaled more than $2.5 billion. Thus, everyone wants a piece of it, including fraudsters. Consequently, it would be best if you took precautions to protect your digital asset and investment proactively.

Links

https://www.theverge.com/2022/2/20/22943228/opensea-phishing-hack-smart-contract-bug-stolen-nft?msclkid=eb3e4904afd511ecada3079f2c86a72b
https://www.reuters.com/technology/nft-sales-volume-surges-25-bln-2021-first-half-2021-07-05/

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