As the NFT space has grown in prominence, it has also become a more appealing target for hackers and scammers looking to profit from the huge reward potential and lack of regulations. These scams are further exacerbated by the hype surrounding the metaverse and NFTs, which have all sizes and types of organizations rushing to launch new platforms without putting adequate safeguards in place.
Thanks to the inherent security of blockchain, it is highly unlikely that anyone will lose their assets via a blockchain-level hack, but there are a growing number of other scams concerning fake NFTs, inflation of prices by traders who sell NFTs to themselves, bugs that allow attackers to get massive discounts on popular NFTs, the growing use of NFTs for money laundering, and so on. This means that you can lose your NFTs even if you don’t explicitly get robbed.
In this article, we will look at four simple ways to protect your NFTs.
1. Create complex credentials
In order to make it more difficult for hackers to guess your login credentials, you should ideally use a combination of capital letters, numbers, and symbols. It’s also critical to keep your credentials private and avoid texting or emailing them to anyone. Keeping credentials and passwords in a physical format is the best option if you need to maintain them in one place. Use a secure password manager, or write it down on paper and hide it somewhere like a safe deposit box. It’s possible to prevent a data breach and reduce the chance of someone gaining access to your NFTs by keeping them offline.
2. Use offline storage
Avoid storing your NFTs in a custodial wallet. Even centralized systems are vulnerable to hacks, so it’s better to keep your digital assets offline, especially if you don’t need to sell them or trade them immediately. Instead, invest in a hardware wallet, which forces you to sign every transaction manually, preventing anyone from accessing your funds remotely. You must, however, take full responsibility for your security, which usually entails backing up and storing your seed phrases and private keys in a secure location. You should also avoid keeping all your crypto assets and NFT assets in the same wallet.
3. Avoid scammers and copycat websites
It is more common for scammers to pose as influential people so that they can gain your trust and obtain your personal information. Likewise, beware of bogus sites that look exactly like the real ones, but when you try to mint, your wallet security gets compromised, and you lose your money. Be careful when dealing with NFT transfers; never follow links from unofficial channels, and make sure the person you are speaking with is who they claim to be.
4. Ensure the credibility of your marketplace
The marketplace you choose must be both safe and reputable. You can verify this by reviewing their public audits, which ensure that their smart contracts are bug-free and safe for use. However, this may be more difficult to find on newer platforms, so it would be best to stick with the established NFT marketplaces. While it’s certainly worth testing out new platforms, especially if there are significant incentives or reward potential, it’s always a good idea to be cautious. Before committing to a platform, especially if it’s new, do your homework, be wary of anything that seems unusual, and take the necessary precautions to keep yourself safe.
Scammers are constantly coming up with new and inventive ways to deceive people. Undoubtedly, the NFT space has opened up exciting new opportunities and life-changing advantages. However, the space is also fraught with significant threats. Inexperienced people might have trouble avoiding these scams since they are often targeted because they are easy prey. However, following the rules mentioned above will dramatically reduce your risk of falling victim to fraud.
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Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn’t represent any investment advice or WazirX’s official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.