A Complete Guide to Follow - NFT Security Tips and Best in 2023

NFTs have caught the attention of both crypto experts and new users. Non-fungible tokens' popularity raises after they were released to the general market in 2021. NFT sales reached $25 billion last year, attesting to the market's undeniable growth. The growing popularity and value of NFTs have attracted hackers, con artists, and other malicious actors. The numerous cases of NFT theft and hacking may deter people from investing in NFTs.

NFT security is an inevitable priority because many NFTs are worth hundreds of dollars and others are worth millions. To safeguard valuable assets, a thorough explanation of NFT security issues and best practices is required. The following is a description of some recommended practices for securing NFTs that you should consider.

What Are Non-Fungible Tokens (NFTs)?

Non-fungible tokens are unique digital assets that are linked to particular assets represented on blockchain networks. The tokens are commonly associated with digital art, video games, music, and other forms of digital media. Real-world assets such as real estate and collectibles could also be represented by NFTs. One of the distinguishing features of non-fungible tokens is the verification of true ownership of assets, both digital and physical. Thus, NFTs may find applications in a variety of other use cases across various industries, with promising value advantages.

The Importance of NFT Safety

The technical foundation of NFTs on blockchain technology provides cryptographic security assurance. NFT security and safety, on the other hand, are critical, as any malicious actor could steal your NFTs. Without adequate safeguards, hackers can gain access to your NFT wallets through phishing attacks or other vulnerabilities.

A simple error, such as clicking on an unverified malicious link, can expose your login information and lead to the theft of your valuable assets. In addition, there are numerous other threats to the security of your non-fungible tokens. If you want to invest in NFTs, you should be aware of the best practices for ensuring the security of all NFT transactions.

NFT Scam

Since Non-fungible tokens are stored in cryptocurrency wallets and depend on blockchain technology for exchanges, most people would assume that they are inherently secure. Owners of NFTs are thus susceptible to the same security risks that affect cryptocurrency users. One of the most recent attacks occurred in February 2022, and NFTs worth $1.7 million on OpenSea were taken. Axie Infinity, a well-known play-to-earn NFT platform, also suffered a loss of about $600 million due to a Ronin Bridge breach.

Compared to centralized systems, blockchain has been designed to offer a comparatively higher level of security. However, users need to be aware of risks like malware attacks, phishing scams, and NFT wallet hacks. In some circumstances, the loss of priceless digital assets may result from a compromised NFT platform or wallet. Before determining the best security practices, let's examine all the threats to NFT security that could exist.

Fake Marketplaces

NFT marketplaces are the simplest way for any beginner to buy or sell a non-fungible token. What do you do when you go shopping online? You must have compared several retailers' offers before making your final decision. The same is true for NFTs, as there are numerous NFT marketplaces and platforms for interacting with non-fungible tokens.

One of the most important NFT safety tips is to use trusted NFT marketplaces and platforms. Make an effort to conduct research on the NFT marketplace or trading platform. In-depth research into a trading platform's origins and goals may help in verifying its legitimacy. You would never put your private keys and seed phrase on a malicious NFT marketplace where they could take eveything in your wallet without your knowledge.

1. Phishing attacks

Phishing attacks are another common entry among NFT scams. Depending on the hackers, the use of phishing for NFT hacks could take different forms. Phishing attacks are carried out through emails claiming to offer free NFTs or the chance to purchase NFTs from an exclusive collection. Most importantly, phishing emails contain a link that appears legitimate and leads users to fraudulent platforms. Phishing attacks are always given priority on the list of NFT best practices for security because their content is constantly changing.

2. Identity Theft

You may have heard of scammers making false calls claiming to offer large sums of money as a reward. The dynamics of the NFT world may lead any unsuspecting victim to believe that every offer represents a new opportunity. Hackers may use the appealing nature of NFTs as a tool in their attacks that rely on playing as a representative of trustworthy NFT platforms.

Identity theft could cause issues for users who become victims of hackers. The list of NFT security tips emphasizes avoiding any calls claiming to be from reputable NFT marketplaces or platforms. Some of them may claim to provide free assistance or threaten you with the loss of your assets.

3. Rug pulls scams

Rug pull scams are a threat to NFTs, just as they are to cryptocurrencies and dApp projects. Rug pull scams involve gaining buyers' trust and providing them with a false sense of security. For example, through targeted promotion, a new NFT collection or a grand giveaway is launched and generates social media buzz.

Once it has amassed enough users to grant a large sum of money, the developers or founders will take it all. All that would be left are NFTs with no real value. The Frosties collection is a notable example of a rug-pull scam.

4. Pump and Dump Scams

Pump and dump schemes are typically carried out by a group of malicious agents. The scam entails pumping money into a specific NFT project in order to increase its value by huge margins in a short period of time. As a result, the project may attract the attention of prospective NFT buyers while experiencing an artificial increase in value. The hackers could then sell the NFTs to secure profits, causing the price of NFTs to fall.

How Can You Protect Your NFTs?

Many other threats to NFT security and safety are mentioned, such as social engineering attacks and fake NFT collections. On the other hand, there are numerous recommended best practices for securing NFTs. You can strengthen your defense against non-fungible token security threats by implementing the best practices listed below.

Use Reliable Crypto Wallets and Marketplaces

The Simplest way to avoid malicious NFT trading platforms is to set up your NFT account on a reliable wallet. Depending on your preferences, you can use Coinbase, Ledger, or Exodus wallets. When it comes to security, hardware wallets are your best bet. At the same time, NFT security best practices necessitate a focus on the leading NFT marketplace, OpenSea.

Enable Security Settings in Your New Crypto Wallet

If you want to use a popular crypto wallet, look for security protocols that can protect your NFTs. The security protocols are generally not enabled with the wallet's initial settings and must be activated.

Consider where you put your money

NFT collections are the most popular among enthusiasts and newcomers. Popular options like BAYC and CryptoPunks have performed exceptionally well in secondary sales. Due to NFT collections' growing popularity, fraudulent platforms and businesses have been attracted. It is one of the traditional methods for checking any cryptocurrency project before investing money in it. Investors should examine the details of the NFT project as well as the founders. Furthermore, you must attempt to identify the project's underlying goals as well as its future roadmap.

Avoid clicking on links in direct messages

DMs, or direct messages, are one of the innovative ways that scammers use to defraud users of their NFTs. Hackers can create fake websites and send the link to a victim in order to initiate an interaction. Random links in your DMs are always a red flag that you should avoid at all costs.

Protect Your Seed Phrase

Without emphasizing the safeguards for the seed phrase, the outline of NFT security best practices would be incomplete. You should be aware that your NFT wallet's seed phrase also functions as a password recovery tool. By using the seed phrase, hackers can set up your wallet on another device and gain access to the private keys for all of your transactions in your wallet.

Thus, you should avoid entering your seed phrase into any registration forms or other application prompts. Simultaneously, you must adhere to the best practices for securing your seed phrase. Keep in mind that you should never save your seed phrase on a device that is connected to the internet. You could, however, try writing it on paper or metal securely.

Protect your privacy

Having an NFT is a status symbol in digital communities, particularly on social media platforms like Twitter. Many NFT collectors proudly display their non-fungible tokens without fear of repercussions.

Transparency in transactions and wallet data is provided by blockchain technology. Malicious entities could use their addresses to focus on targeted phishing attacks. Subsequently, NFT owners may become victims of such flaws and have their wallet information compromised.

Stay updated with the trends

The best approach for protecting against NFT security threats is to stay up-to-date on the latest trends. You must be aware of what is going on in the NFT industry and be aware of the most recent security breaches. Maintain your knowledge of evolving security threats and plan for every possible scenario.

To sum up

The final impression about NFT safety advice demonstrates that being cautious about protecting one's assets takes little effort. Although you must pay close attention to the numerous security best practices, they are not difficult to implement. Best practices for NFT security can be implemented in a few simple steps. Acceptance of non-fiat currencies is highly dependent on trust in the safe use of valuable assets.