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NFTs and The Importance of Storing Them Safely

Digital currency is a market that never sleeps and is the mainstream of the fast-growing niche of blockchain. Facilitating the users now, NFTs are more like crypto assets.

A non-fungible token is something digitally unique artwork and can’t be replaced with something else. It may be drawings, music, or any kind of artistic image representing academic titles, car ownership, house ownership, etc.

Blockchain has provided security to digital assets, providing the immutable digital ledger to store them, which was impossible before that. It allows artists to manage their assets without intermediaries. Same way, NFTs are stored in a secure location such as a software crypto-wallet protected by a seed phrase of 12 words, a password, or touch authentication. Let’s take a look at why such precautions are needed.

Why Store NFTs:

Keeping some physical artwork worth thousands of dollars means spending a good amount of money and time to keep it in a safe place. The same goes for NFTs also, learning how to store NFTs is also very much needed to avoid theft.

Highly attracted by the investors, nonfungible tokens have been highly valuable assets, which in return sometimes get targeted by hackers, stealing digital artwork. Of course, there is a probability of scamming or theft everywhere. Hackers do try to steal digital assets or NFTs, although it’s quite difficult to do so on a blockchain

In case you leave it in an insecure marketplace, NFTs can easily be hacked or there may be some fraudulent activity. Blockchain-based decentralized storage is safer and offers supreme rule over their property providing multiple solutions for greater peace of mind.

Keeping the NFTs in your wallet gives you access to the investments through a private key providing a cryptographic address. As it goes online, it may be vulnerable to hacking attacks. To be on the safe side, it’s essential to store the NFTs offline in a platform that is not connected to the internet and less suspected of cyber-attacks. If there’s a cold storage hardware wallet for storing NFT, it lessens the risk of being hacked.

Now let’s keep in mind some of the common ways to store NFTs:

Software Wallets:

The easiest and popular way of storing digital assets is setting up an online software wallet that has a user-friendly interface for newbies. They have both mobile and web applications. One of the most famous such wallets is Metamask which is the standard software wallet built as a chrome application only, its transactions are encrypted by a password and a 12–24 words phrase.

Interplanetary File System (IPFS):

Decreasing the chances of being hacked, an IPFS is a protocol that allows users to store their NFTs off-chain. The file splits into smaller pieces when added here, and a unique fingerprint is provided called a content identifier(CID). The information is distributed across the world using content-based addressing instead of the standard location-based addressing.

Cold Storage Hardware Wallet:

In this wallet, the private key is provided for a hardware wallet to increase the security of the assets that enable users to access their digital assets in an unhackable hardware wallet device where they are invulnerable.

Two hardware wallets are Trezor and Ledger providing extra security in two-factor authentication. These wallets do not contain physical artwork or any crypto but stores the private keys that users access for holdings stored on-chain.

Closing lines:

Nowadays, owning some collectibles or digital assets is not a thing to worry about for their security. Everyone can opt for expensive or cheap online solutions, as of their choice. Hardware wallets are somehow expensive but provide enhanced security for those investors holding a considerable amount of NFTs.

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