How to keep your NFTs safe and stay informed in the world of digital collectibles
Hello, fellow NFT enthusiasts!
You might be new to this whole NFT thing, or you might already be the proud owner of some variation of Ape, Bored or otherwise. In fact, you might already be using DegenKnows, our new NFT analytics and exploration tool to discover and verify digital collectibles.
Developed by Opera, DegenKnows provides services around NFT security as well as NFT on-and-off chain data analysis through DegenKnows.io and partner API. DegenKnows also helps users search and research NFT projects in a more efficient and timely manner.
The tool includes upcoming projects, which are not available yet on marketplaces such as OpenSea. Users can easily learn everything about an NFT project, from on-chain trading performance to social media analysis such as project team rating, Twitter, and Discord performance analysis.
But it doesn’t matter how invested you are in this exciting space where digital artwork and ownership intersect. First and foremost in your mind must be how to stay safe and secure when buying, selling, or even just browsing for NFTs. Because, as it turns out, this is a bit of a challenge these days.
What are NFTs?
If you’re not sure what we’re talking about in that intro, here’s a quick catch-up: NFT stands for “Non-Fungible Token”. And yes, we know this doesn’t make things any clearer, so keep reading.
An NFT is a unique digital asset that exists on a blockchain. Each such token represents a piece of work such as an image, a GIF, a song, and more. Items that have been “minted” as NFTs (i.e. they have been associated with a unique token on a blockchain) also include tweets and even memes.
Holding such a token (usually in your chosen crypto wallet) is proof that you own this piece of work. You can keep it as an investment or sell it according to its market value. Think of NFTs as digital versions of trading cards, each with its own unique value and status among investors and collectors.
What are the risks involving NFTs?
Depending on a number of factors, an NFT can get pretty valuable. The most famous example is the work “Everydays: The First 5000 Days” by digital artist Beeple. The NFT was sold through auction house Christie’s last year for a record-breaking $69 million.
It’s easy to see how those numbers could attract the attention of less savory figures in the online world. And attract them they do: According to research by blockchain analytics firm Elliptic, the year between July 2021 and July 2022 saw more than $100 million worth of NFTs reported as stolen through scams. In fact, this last July was a record month for such incidents, with over 4,600 NFTs stolen.
As the NFT industry quickly develops and evolves, more and more types of scams are threatening NFT investors’ assets. The level of security infrastructure in the NFT field is not matching the speed of its development. Our security service can help users find different types of scams. DegenKnows will cover malicious copycats, flawed smart contracts, and suspicious behavior like wash trades and airdrops, which can trick users into investing in something that’s a certain loss.
So how do I keep my NFTs safe?
There are certain steps every NFT owner should take to keep their assets safe. In fact, they’re not much different from the standard security and safety measures that every online user should be mindful of. But if you factor in the risk of serious financial loss, these steps become even more vital.
Watch where you click
This goes without saying no matter what you do online. Scammers often set up websites or send emails impersonating legitimate parties to trick users into revealing sensitive information like passwords and other data that can help with authentication. In the case of NFTs, scammers often impersonate marketplaces or exchanges, or even artists doing token giveaways. They lure the user into entering their private key or seed phrase. Just like that, they have given the scammer full access over their assets.
So whenever you see a link that looks suspicious, or find yourself interacting with a party that asks you for your sensitive data, always think twice, double check, and avoid sharing such data with any pages or services you’re unsure about.
Take good care of your sensitive information
Your password, private key, and seed phrase are hands-down the most important elements of your online security. They are what provides access to your wallet, which contains your assets – including any cryptocurrency and NFTs. Needless to say, if you lose this information, you’ll be locked out of your wallet and all its contents!
So always make sure to store those in a safe place that cannot be accessed by others. Some password managers now allow you to store these credentials on them just like you would your normal passwords. However, many experts say you should never store your seed phrase on an internet-connected device or service.
That’s why you will find many recommendations on physical methods of storing your seed phrase: from the highly specialized (steel plates and capsules, encrypted files on offline hard drives, etc.) to the downright apocryphal (marking specific words in specific pages of a specific book!). What all these avenues have in common is that they are inaccessible to an online attacker.
Generally a good piece of advice no matter what kind of service you access. Two-factor authentication is a method of confirming your identity when you log in to a website or service, or when you authorize a transaction. When you log in or confirm a transaction, you receive a prompt to prove your identity using a separate channel – for example, an SMS containing a unique code, or entering a code from an authenticator app such as Google Authenticator or Duo Mobile.
This gives you a little extra peace of mind – even if an attacker had your password, for example, they would still need access to your two-factor authentication method to log in. So don’t waste time enabling 2FA on any services you use that support it!
If you’re buying or selling NFTs – which can cost a pretty penny, as we just mentioned – it’s best to be well-informed. By doing your own research (DYOR), you can understand which marketplaces are trustworthy, determine which projects and collections are worthwhile, and decide whether you’re getting your money’s worth out of a particular transaction. Dealing with NFTs is like being a high-stakes investor and an art collector all at once – so knowledge is your superpower.
A platform like DegenKnows can be instrumental in discovering new NFTs as well as finding and studying the most popular projects, collectors, creators, and opinion leaders. It’s a wealth of information and data on NFTs, all in one place for you to explore. Learn more here.
Happy (and safe) trading!