There is no denying that hacks and scams dominate the NFT industry. 10s of millions of dollars have been stolen this year alone.
That is why in this article I will be going over 7 ways of protecting yourself from NFT theft. So without further ado, let’s jump right in.
Can NFTs be stolen?
NFTs can be stolen using the same methods seen in traditional cyberspace. Ultimately, hackers exploit sensitive information to gain access to users’ cryptocurrency wallets. This includes the private key and account details that grants full control of their assets.
Now let’s look at 8 ways of protecting yourself.
1. Use a hardware wallet
Simply put, a hardware wallet is a separate device that you use to access your cryptocurrency wallets. It is shaped like a USB stick and is used to authorize transactions.
Moreover, the security that these devices provide is second to none. In most instances, it requires physical possession of this device to gain access. Not to mention, they cannot be hacked.
The hardware wallet that I recommend is the Ledger Nano X. You can check my review by clicking here.
2. Hide your private key
The number one reason NFTs get stolen is that users’ private keys are compromised. At the end of the day, these alphanumeric seed phrases provide full access to your cryptocurrency assets therefore it is of utmost importance to not disclose this information.
Overall, there are several best practices to follow. Firstly, do not store your private key online as this leaves it susceptible to hackers.
Secondly, only store it in physical form. Whether that be a piece of paper or a metal plate with fireproof protection.
Lastly, for the highest security, you can encrypt them and use a decoy.
3. Install a VPN & Antivirus
VPNs are a great way of protecting sensitive information. Simply put, they hide your location and network activity through various encryption techniques. Ultimately, this reduces the amount of information that hackers can leverage to gain access to your NFT wallets.
Additionally, antivirus is also a necessity. Ultimately, viruses are one of the main attack vectors for hackers so a good antivirus program is a must. Moreover, they block ads, restrict access to suspicious websites and protect passwords.
4. Limit exposure of personal info
NFT scammers leverage personal information to gain access to cryptocurrency accounts. Therefore, you should limit the amount of personal information you expose.
This includes your name, address, date of birth, etc. Therefore, when using social media be wary of what information you are disclosing as malicious actors can exploit it.
5. Enable 2-Factor authentication
This is a separate application that you pair with your cryptocurrency accounts to enhance security. In essence, 2-Factor authentication is a mobile application that requires a 6-8 digit code to log in to your account.
Moreover, it refreshes every 30 seconds for further security. Overall, if you are using various cryptocurrency exchanges to buy NFTs such as Coinbase and Binance it is imperative to pair it with 2FA. The most popular 2FA app is google authenticator
6. Do your research
When investing in NFTs it is vital to remain vigilant. Overall, scam projects have several warning signs. For instance, promises of exorbitant returns or vague details on the goals and aspirations of the project. Moreover, poor website design with grammatical errors is another red flag.
Furthermore, it is important to avoid projects with a weak reputation and team. Anonymous creators are also a major warning sign. Ultimately, they are rarely held responsible if something goes wrong.
7. Only interact through official channels
There is no denying that phishing scams are rampant in the NFT space. Fake websites and accounts imitate legitimate ones in hopes of gaining personal information from unsuspected customers.
Therefore, it is imperative to only interact with official websites. This can be ensured by double-checking the URL, avoiding suspicious links, declining cold calls, and looking for verified accounts (e.g check marks on Twitter).
If you want to view this article in a more visual format then please check out my video below:
FAQ
How common is NFT theft?
NFT theft is extremely common. In just 2022 alone over $100 million in NFTs were stolen.
What was the most valuable NFT ever stolen?
The most valuable NFT stolen was CryptoPunk #4324. It sold on the 13th of November 2021 for $490,000. Moreover, the largest theft ever was a collection of 16 pieces worth over $2 million when combined.
Can stolen NFTs be sold?
Yes, stolen NFTs can be sold. Thanks to the underlying technology they are free from censorship and can therefore be traded peer to peer. However, stolen NFTs are usually flagged by marketplaces and sold at a discount.
Final thoughts
Although there are plenty of opportunities for hackers to steal your NFTs there are also several ways to prevent them. From hardware wallets to VPNs there is an option for everyone.
All in all, if you follow the best practices in this article then you can navigate the space with ease. I hope you found this article useful and thanks for reading it.
Want to learn about how to promote NFT? Click here to read my previous article.
