A Brief Understanding of NFT Security and Its Issues

NFT, defined as Non-Fungible tokens, are virtual assets that are trackable in the crypto world, and each virtual asset has its unique nature. The value of NFT depends on many factors such as minting number, market demand, particular traits, and the community behind the asset. With great popularity comes the great concern, NFTs are growing in popularity, and the concern is NFT security. NFT constitutes the rapidly growing technology of the world that further promotes tokenization of the economy. As more people are getting involved in the adventure of digital money, it is essential to understand the requirement of a digital asset vault and the opportunities and risks associated with the asset class. 
 
The NFT sector has shown remarkable growth over the past few years despite the recession across the cryptocurrency market. Let’s get deeper into NFT security and its issues. 

One of the significant NFT risks threatening investors and projects is scams. Hackers and vindictive people use popular platforms, wallets, or exchanges to steal users’ data required to access their virtual assets, thus affecting NFT security. 
 
Phishing is one such cybercrime that is widespread in the digital world. One of the latest reports of Phishing came forward in January 2022 when the hackers tricked supporters of CrytpBatz (an NFT project). The scam was executed using an old URL and creating a fake Discord server. You can opt for a digital asset vault by Anonybit secured by Turnkey biometric authentication to protect your digital money. 

1. Marketplace Security 

NFTs thrive from a centralized digital platform that allows individuals to buy and sell virtual assets. Platforms like Nifty Gateway and Open Sea own the private keys of all assets on their platforms. If their platform is attacked, a hacker can steal many NFTs. Even if the marketplace has a robust security system, individual hacks can continue to happen due to weak security by platform users. It may be a weak password, email scam, or no 2FA, to which users can lose their wallets and digital assets. 

2. Cyber security issues and NFT fraud 

Hackers try to access the user’s data through vindictive emails. These emails look like they come from a trusted source, but they are not. Hackers inform users that some suspicious activity is seen on their account, and they need to provide a login id and password to verify their identity. With the help of a login id and password, these hackers then access the user’s account and steal the NFT. 

3. Smart Contract Risk 

NFT smart contracts can be exploited to benefit hackers. Smart contracts are used in NFT to explain the limitations of virtual assets and develop trust between the parties involved in the trade of NFT. There is a high-level risk of smart contract NFT in the market. If the rights governing statement is not clearly outlined in the contract, an NFT seller can lose his assets. 
 
The NFT world is still in its infancy; as the opportunities grow, so is the risk. Contact Anonybit to get solutions for your NFT security.