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Non-fungible tokens, or NFTs, have recently gained popularity. This isn’t surprising, especially when you hear about artists making tens of millions of dollars selling a single NFT. NFTs assets have skyrocketed in the market in the last year alone. Trading in NFTs increased from $100 million in 2020 to a staggering $22 billion in 2021, according to tracking company DappRadar. The combined value of the top 100 NFTs is $16.7 billion.
NFT stands for Non-Fungible Tokens. These non-fungible tokens are digitized tokens of physical assets such as art, music, albums, and so on. These digitized tokens are currently less valuable than physical assets, but some of them are worth millions of dollars. It emphasizes the importance of learning how to securely store NFTs to avoid losing access to your NFT investments.
Prior to the adoption of blockchain technology, digital assets were less popular than they are now. However, due to poor distribution and lack of ownership in the centralized ecosystem. The owner of digital assets could not trace their distribution, causing them to lose value. Blockchain provides an immutable digital ledger that allows creators and artists to validate the original piece of their creation and manage their assets without the use of intermediaries.
Also Read: Top 5 NFT trading Strategies
According to one survey, the exponential growth began in 2021. The global NFT market increased from 13.7 million to 2.5 billion dollars. People were trading NFTs in large quantities, with total sales exceeding $5 billion. In October, the most popular NFT marketplace, OpenSea, reached an all-time high of $ 1 billion in sales.
According to industry data from Cryptoslam.io, global NFT sales peaked at about $4.9 billion in January 2022 but have since declined to only about $565 million so far in December. The amount is about 80% less than December 2021’s $2.8 billion in non-fungible tokens sales.
The popularity of NFTs has grown significantly in tandem with the rise of blockchain technology. With Blockchain Council’s lifetime valid NFT certifications, you can become an NFT expert today.
Non-fungible tokens have developed into valuable, scarce assets over time. For those who are interested in how NFTs can be hacked if supported by blockchain technology, it has attracted investors and hackers with success. The security of NFTs depends largely on how you are storing them. Keys that the owner stores can be used to access NFTs. If someone manages to obtain the access key to NFTs, they are free to take ownership.
With blockchain ledger technology, it can be followed, though. Similar incidents where hackers stole digital assets from Nifty Gateway, an NFT marketplace, have occurred before. However, a careful examination of the business’s security revealed that it had not been jeopardized. What caused it, then? Well, improper NFT storage is the cause of this. In the world of cryptocurrencies, there is a saying that goes, “If you don’t have the keys, you don’t own the crypto.” It also implies NFT because, without access to one’s wallet keys, one cannot access NFTs.
Security is just as important for NFT storage as it is for cryptocurrency storage. You run the risk of being the target of hacks, exchange fraud, or single points of failure if you leave them on an exchange.
Decentralized blockchain-based storage is much more secure than centralized storage of digital assets and gives owners complete control over their assets. Additionally, it offers a variety of options for increased mental clarity.
It’s important to keep in mind that you shouldn’t keep cryptocurrency or NFTs in your wallet. Instead, a wallet uses a private key to ensure access to the investments stored on the blockchain.
Also Read: What is Physical NFT?
Therefore, it is crucial to save and store NFTs in offline solutions for cold storage. This assumes storage in a platform that is not connected to the internet and is thus less vulnerable to unauthorized access, cyberattacks, and other flaws common to data that is connected to the internet.
By purchasing a cold storage hardware wallet and transferring the digital assets there, you can store NFTs offline in the best possible way. The wallet won’t be accessible to hackers and keyloggers because it won’t be online. Every hardware wallet also includes a password and ID for additional security.
Software wallets are online and simple ways for novices and non-technical users to store NFTs. These wallets are the most popular option for regular people, and the user interface is comparatively friendly. One of the most well-known software wallets that provide basic security for your non-fungible tokens is MetaMask. A 12–24 word seed phrase and a password are used to encrypt and secure MetaMask transactions. These digital wallets, like MetaMask, are online and open to hacker attacks. Enjin and Math wallet are two additional popular MetaMask alternatives.
The Interplanetary Filing System is a peer-to-peer hypermedia protocol that enables users to store their non-fungible tokens off-chain. The way information is disseminated around the world is altered. Unlike other systems, IPFS uses content-based addressing as opposed to the more common location-based addressing. When a user adds a file to IPFS, the file is broken up into smaller pieces and cryptographically hashed. Each of these smaller pieces is given a distinct fingerprint known as a CID, or content identifier. These CIDs are hashes that are linked to non-fungible tokens directly.
A cold, offline, or hardware wallet is the most common and effective security option for storing non-fungible tokens. It indicates that the private keys necessary to access a non-fungible token’s ownership are kept in a physical hardware wallet that is not online. It lessens the susceptibility of wallet gadgets. As an added measure of security, it also has two-factor authentication. Without physically accessing the hardware wallet, it is impossible to hack it. Users’ most preferred hardware wallets for storing their non-fungible tokens are Ledger and Trezor.
Non-fungible tokens are expanding quickly, and users need to be made aware of the rising risks associated with digital assets. Inadequate storage and security measures are typically to blame for a hacker’s inability to recover keys to NFTs. Because NFTs are so common, businesses have begun to create solutions that raise security standards. With regard to threats and countermeasures related to non-fungible tokens, the NFT certification from the Blockchain Council provides a thorough and in-depth understanding.
Also Read: Explain NFT Whitelist. How Do You Join An NFT Whitelist?
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