Non-fungible tokens, or NFTs, have captivated the attention (and wallets) of people and organizations across the world. It is primarily due to the staggering price tag sales like the digital artwork by Beeple sold for over $69 million.
Discovering new and innovative ways to trade currency is now standard practice in the digital era, but being aware of security concerns and taking actions to protect yourself against them will be critical immediately and over time. If you want to invest in buying NFT, here are three things to know.
Are NFTs Secure?
The short answer is that they aren't exceptionally safe. It's no secret that threat actors are motivated opportunists who will go after any asset, physical or digital, that has worth. The growing popularity of NFTs has created an entirely new route for hackers, who are already feeling the rush. It isn't just a future-oriented concern; this is something that's already happening.
In March, hackers compromised numerous Nifty Gateway NFT user accounts and were able to move previously purchased NFTs from their accounts and buy new ones to use with their payment cards on file. While the users' funds were restored, the NFTs were dispersed to another NFT buyer on a different platform since the platform itself, such as Nifty Gateway, possessed the private keys associated with the NFTs, and they couldn't be recovered once moved.
Attackers can also spoof NFTs to steal users' credentials or install malware. Remote access trojans are potent attacks that give the attacker complete remote control over the infected computer. It also allows them to steal passwords and keystrokes, among other things.
Will New Laws be able to Save the Day?
Maybe in the future, but not just yet. Because NFTs are blockchain-based and have no regulations or supervision, they are a burgeoning market with a lack of rules and oversight. As a result, legal gaps in the sector will enable some people to operate without inhibition under certain circumstances.
The monitoring of past transactions about digital wallets linked to a customer is most likely to occur in these areas, as regulations may be expanded to crypto exchanges. This is comparable to what mainstream banks are now required to report. For example, the Department of Justice and the Financial Crimes Enforcement Network have recently collaborated to reduce fraudulent activity in decentralized exchanges. So far, they've concentrated on the data retention requirements that businesses must follow.
How can You Protect Yourself from Hackers and other Online Dangers?
The most significant thing individuals can do to safeguard their NFTs is enable multi-factor authentication (MFA). According to the official statement of March 15, none of the victims of the Nifty Gateway hack had MFA enabled.
When you combine MFA and a strong password, you can utilize additional security measures to increase your protection. The strength of a strong password should not be overlooked, which means you should create passwords that are long and complex enough without being used on any other accounts. While nothing is perfect, those simple measures go a long way toward preventing fraudulent behavior.
For businesses and platforms, basic security hardening procedures such as drive encryption, employee background checks, employee user awareness training, secure sensitive communication, bug bounty programs, vulnerability testing, and third-party penetration testing services are just a few of the actions to take. And, of course, you’ll need a reliable crypto wallet, such as Crypterium.
When it comes to online protection, offline storage (i.e., cold storage) is the most outstanding security for both consumers and companies. You should take these three things into account before buying NFT.