Are NFTs safe? 3 things you should know before you buy

2021-05-06 06:00

What are NFTs? NFTs are pieces of digital content that are stored on a blockchain, which is the same foundation for other cryptocurrencies, such as Bitcoin or Ethereum.

The difference between NFTs and other cryptocurrencies like bitcoin is that NFTs are unique tokens, they cannot be replicated or traded with another equal NFT. How secure are NFTs? The short answer to this is not very secure.

It's no secret threat actors are motivated opportunists who will attempt to pilfer any asset, physical or digital, that holds value; and even though NFTs are still in their infancy from a market perspective, the rapid growth in popularity has opened a brand-new avenue for hackers.

In March, attackers compromised multiple Nifty Gateway NFT user accounts and were able to both transfer the previously purchased NFTs from their account and purchase new ones to transfer with their payment cards on file.

While the users' cash was recovered, the NFTs were lost to the attackers who promptly sold them to another NFT purchaser located on a different platform since the platform itself, like Nifty Gateway, holds the private keys associated with the NFT and they weren't recoverable after being transferred.

The most important thing users can do to protect their NFTs is enabling multi-factor authentication.

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