Best Practices to Keep Your NFTs Safe

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You're probably aware by now that NFTs, as much as they're backed by the conveniences and security of the blockchain, can still be lost or stolen. 

You're probably aware by now that NFTs, as much as they're backed by the conveniences and security of the blockchain, can still be lost or stolen. 

Just last month, an estimated $1.7 million worth of NFTs were stolen by hackers from multiple OpenSea accounts. While the thievery was an industry-shaker, some pundits saw it coming, revealing that the "Wyvern Protocol" used in NFT smart contracts had a glaring security hole.

But even with occasional reports of high-profile NFT heists, the near-immutability of blockchain ensures that NFTs are still much safer than traditional assets like fiat currency or gold. After all, once an NFT is minted to the blockchain, it cannot be altered, destroyed, or duplicated — unlike a physical painting that anyone can take possession of or a banknote that could be counterfeited.

Still, it's important to take extra precautions with your NFTs, as they're unique digital assets that can't be replaced if lost or stolen. 

First, let's talk about storage options:

The Safest Way: Cold Storage Hardware Wallet

The safest way to store your NFTs is by using a cold storage hardware wallet like the Ledger. Hardware wallets are physical devices that store your private keys offline, away from the prying eyes of hackers. 

To access your NFTs stored on a hardware wallet, connect the device to your computer and enter your PIN. Ledger hardware wallets also come with a companion app to view your NFTs and make transactions easily.

Crucial information linked to your NFTs, i.e., touch authentication and passwords, is stored in a device, making it impossible to hack into unless it gets physically stolen. 

The Next Best Option: Software Wallet

If you're not ready to purchase a hardware wallet or simply don't want to carry around another device, a software wallet is the next best option. Software wallets are applications installed on your computer or mobile device and allow you to store your NFTs offline.  

One of the most popular software wallets for NFTs is MetaMask. MetaMask allows you to store your private keys locally on your computer or mobile device in an encrypted format. MetaMask also has a built-in browser to view and transact with your NFTs on multiple decentralized applications (dApps).

Less Safe but More Convenient: Online Wallets

Online wallets are the least safe but most convenient option for storing your NFTs. Online wallets are websites or applications that allow you to store your NFTs online in an encrypted format. 

Most online wallets come equipped with a built-in browser to view and transact with your NFTs on decentralized applications (dApps), similar to a software wallet. The main benefit of online wallets is that they're easy to use and allow you to access your NFTs anywhere.

The biggest downside of online wallets is that they are susceptible to hacking. In fact, the OpenSea hack mentioned earlier was carried out by hackers who gained access to the online wallet provider's website. 

So, which storage option is right for you?

It depends on your risk tolerance and how much convenience you want. If you're comfortable with using a software wallet and are willing to take the extra step of encrypting your private keys, then MetaMask is a good option. 

If you're looking for a more secure storage option, we'd recommend using a hardware wallet like the Ledger. And if you're focused on convenience, then an online wallet is the way to go.

No matter which storage option you choose, just make sure to follow these additional safe practices:

1 - Never, for any reason, click unverifiable links.

This is one of the easiest ways for hackers to access your NFTs. If you're unsure whether a link is safe, always check with someone you trust before clicking on it.

2 - Use strong passwords and 2-factor authentication (2FA).

This is another basic security measure that'll protect your NFTs from hackers. Use a strong password that's at least eight characters long and includes a mix of uppercase and lowercase letters, numbers, and symbols. 

You should also enable 2-factor authentication for any online accounts linked to your NFTs. 2FA adds an extra layer of security by requiring you to enter a code that's sent to your mobile phone or email address in addition to your password. 

3 - Store a limited number of NFTs online.

If you're going to use an online wallet, only store the NFTs you need for immediate transactions. The rest of your collection should be stored offline in a cold storage hardware wallet or software wallet.

4 - Back up your NFTs.

It's always good to backup your NFTs if something happens to your storage device or online wallet. There are several ways to backup your NFTs, including writing down your private keys and saving them to a USB drive or cloud storage service.  

5 - Use a reputable online wallet provider.

Not all online wallet providers are created equal. Make sure to do your research and only use providers with a good reputation and who have been around for a while. The number of users also gives you an idea of how popular and well-trusted a provider is.

6 - Keep your software and operating system up to date.

Be sure to keep your software and operating system up to date with the latest security patches. Likewise, your devices, i.e., mobile phone, laptop, PC, must also be up-to-date. This is another basic security measure that'll help protect your NFTs from anyone with bad intentions.

7 - Always perform a double-check when handling domain links.

Domain links can be easily copied and pasted, so it's important always to perform a double-check to avoid sending NFTs to the wrong address. This includes checking the spelling of the recipient's name and ensuring the link corresponds to the correct address. 

8 - Avoid sharing screens as much as possible.

When sharing screens, there's always a risk that someone could copy your private keys or other sensitive information. If you have to share screens, use a secure remote access tool.

9 - Make a habit of bookmarking verified websites linked to your NFTs. 

This will help you avoid phishing scams and other types of attacks. More importantly, bookmarking means you're less likely to go to a fake page. 

10 - Research (lots of it).

The NFT space is relatively new to you, so it's important to research before buying, selling, or storing any NFTs. This includes familiarizing yourself with the different wallets and storage options available. 

At the end of the day, the best way to keep your NFTs safe is to educate yourself about the risks and always exercise caution when handling them. Sometimes, we only adhere to stringent security measures when we've already been hacked. By then, it's usually too late. So, it's crucial to be proactive and take the necessary steps to protect your NFTs from the start. 

References:

https://www.theverge.com/2022/2/20/22943228/opensea-phishing-hack-smart-contract-bug-stolen-nft

https://www.artnews.com/art-news/news/todd-kramer-nft-theft-1234614874/

https://cyberscrilla.com/securely-storing-your-nfts-a-complete-guide/

https://decrypt.co/93087/how-to-keep-your-nfts-safe

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