2021 can undoubtedly be seen as the year of the NFTs. In that year, NFTs, which stand for non-fungible tokens, have become extremely popular. For example, many NFTs had already been sold for more than 1 million dollars.
More and more people are buying an NFT, and you may also belong to this group. Because the value of an NFT can get so high, it is extra important that you store your NFT in the most secure way. Of course, you don’t want criminals/hackers to steal your NFT.
In this article, I will explain how you can best secure your NFTs in a wallet.
How can you store an NFT?
An NFT (read more about what NFTs are here) is of course just a token that runs on the blockchain. Therefore, you can store an NFT like any other token: in a crypto wallet. However, there are a number of points to keep in mind when you want to store NFTs.
First, it is important to look at the protocol that is used, and on which blockchain the NFT runs. You cannot store an NFT running on the Bitcoin blockchain in a wallet dedicated to Ethereum tokens. This is because such tokens use a protocol that must be supported by the wallet.
So always check on which blockchain your NFT runs and which protocol it uses. You will find that most NFTs run on the Ethereum blockchain, and use the ERC721 protocol, as this is seen as the standard protocol for NFTs. You could then store your NFT in an Ethereum wallet like MetaMask. However, this is not the most secure way to store your NFT, which we will explain in a moment.
Why is it important to securely store NFTs?
In fact, we shouldn’t have to explain why it’s important to store NFTs securely. The answer is the same as the question ‘why is it important to keep your money safe?’.
NFTs can be worth an awful lot. In fact; the value of an NFT can explode much faster than a crypto coin or token. This is partly because NFTs are unique and are sold as individual assets. As a result, the value of an NFT is much more influenced by supply and demand.
For example, on March 11, 2021, an artist named Beeple sold an NFT called “Everydays: the Frist 5000 Days” through Christie’s (an auction house) for $69 million. The artist had been working on this artwork for over 13 years. Or how about Twitter founder Jack Dorsey’s first Tweet? It was sold as NFT for more than 2.9 million dollars. Viral photos or videos are also increasingly being sold as NFT. For example, the video ‘Charlie bit my finger’ brought in more than $750,000:
Because NFTs can become so valuable, it is important that they are stored properly and securely. Not only because you can lose money, but also because more criminals are attracted to NFTs. The high value of NFTs acts as a magnet for criminals, as they can become very rich with them. They will therefore also do their best to hack a wallet with NFTs than a wallet with a few Ethereum coins.
Tips for the best NFT wallet security
Let’s dive into the best ways to secure your NFT wallet.
NEVER store your seed phrase on any of your devices
When you create a wallet, you always get a seed phrase. This is a combination of (often) 24 words, with which you can get your wallet back at any time. If you ever lose access to your laptop, you can get your wallet back on another device with your seed phrase.
This also means that hackers can get into your wallet when they have your seed phrase in their hands. It is therefore extremely important that you keep your seed phrase safe. Never do this on any of your devices that are connected to the internet. In that case, hackers always have the opportunity to gain access.
It is better to write the seed phrase on a piece of paper and store this piece of paper well (like in a safe). Another way is to save your seed phrase in a Word document and save it on a USB stick. Then delete the Word document from your computer. If you want to go for ultimate security, you can still choose to encrypt the Word document. If you want to go really hardcore you can have your seed phrase imprinted in metal so that if your house ever burns down your metal seed phrase plate will survive, a paper version won’t.
Use a hardware wallet
NFTs can be stored in different types of wallets. Of course, you quickly think of a software wallet, such as MetaMask. It is also possible to use a desktop wallet. Still, these are not the most secure options for storing NFTs.
The most secure wallet is of course a hardware wallet, which you can also use to store crypto coins and tokens. This is a kind of USB stick where your private keys are stored. When you disconnect the hardware wallet from your computer, it is impossible for hackers to get to the contents.
When you choose a hardware wallet, you will of course have to keep this wallet in a safe place. So don’t just take it with you anywhere, but always leave it at home. One of the safest ways is to store the hardware wallet in a fireproof safe at home.
You will come across different types of hardware wallets on the internet. The best-known wallets are from Trezor and Ledger. Both companies offer secure hardware wallets that are easy to use. So you can safely store your NFTs in a Trezor or Ledger hardware wallet.
Use secure and strong passwords
You often hear people say that you should use a different password for each account. I definitely recommend that, but I’m also realistic at the same time. Nowadays you have dozens, if not a hundred different accounts. Of course, you can never remember all of these passwords.
Fortunately, nowadays you can choose a suggested password in browsers such as Safari or Google Chrome. This is a strong password that is stored directly in a secure password vault in your browser or on your device. This way you don’t have to come up with or remember a new password yourself. At the same time, these passwords are often much stronger than passwords you can come up with yourself.
Would you rather not use a password vault? Then it is important to come up with a strong password, where you use small and large letters, numbers, and special characters.
Many people think that it is not a bad thing if certain accounts are hacked. ‘They can’t do anything with my Facebook account’, or ‘But I have nothing to hide in my e-mail’ are frequently used statements. Sure, maybe you don’t post anything on Facebook, but this could be the start of a major hack.
Once hackers hack into your Facebook, they can make you click on a link. Or upload a file to one of your devices. It’s even worse when hackers are in your mailbox. They can then log in to almost any account that is linked to your email address.
From here they can get further and further into your devices, with the possibility that they also gain access to the wallet that is in your browser or on your device. That’s why it’s important to use a strong password for “small” or “less important” accounts as well.
The video below explains more about how to choose the most secure password.
Activate 2FA on all your accounts
More and more services and devices let you use 2-Factor-Authentication (2FA). This is a technique where you have to perform at least 2 actions before you can log in to your account. For example, you must first enter a password, after which you will receive a text message with a code that you must enter in order to continue logging in.
In many cases, you can also use the Google Authenticator. When you log in, the website will ask you to enter the code in this app after you have entered a password. This way the website always knows that you are the one logging in.
It is important to use 2FA at a crypto exchange and wallets. This makes it virtually impossible for hackers to gain entry. Pay attention to where you receive the second code. It is safer to do this via Google Authenticator or to receive a text message. Hackers can access this less easily than, for example, in your mailbox.
Never share your computer screen with others
It is quite common to share your computer screen with others, for example when you are in contact with a help desk. For example, by means of Teamviewer, someone can remotely control your computer to help you further.
However, such people may also perform actions or actions that they should not perform. Think of opening files, or uploading files to your computer without you noticing.
Although this is often done by reliable companies, it is very unsafe. It also sometimes happens that employees of large companies (that you would trust) open or place files when they are not allowed to do this.
When you store your NFTs in a wallet on your computer, you should never use these types of services. The risk is many times greater than the benefit you get from this.
Don’t just click on a link (and don’t download unknown files)
This has always been important when it comes to internet security. Never click on a link if you don’t know where you are going. You can come across such a link on the internet, but it can also be sent to you via e-mail. Do you unexpectedly receive an email from someone with a link or file? Never click on this or download any files from this email. It is best to report the e-mail as spam immediately and delete it from your mailbox.
When you do click on a link, a file can be downloaded automatically (without you noticing it) that hackers can use to get into your computer. They could then (by means of certain techniques) gain access to your wallet. We also call this phishing.
NFTs are becoming more popular by the day. There are more people talking about it, but also more and more people buying and selling NFTs. This, of course, causes the price of such NFTs to explode in recent times. NFTs are therefore an attractive prey for hackers. It is therefore very important that you store your NFTs securely in a crypto wallet.
In this article I let you know what tips you can use to do this as safely as possible:
- NEVER store your seed phrase on any of your devices
- Use a hardware wallet
- Use secure and strong passwords
- Activate 2FA on all your accounts
- Share never your computer screen with others
- Do not just click on a link (and do not download unknown files)
When you actually use these tips, you reduce the chance of a hack and theft of your NFTs.