How to Store Your NFTs Securely From Hackers

 

Non-fungible tokens (NFTs) have exploded in popularity over the last couple of years. These digital assets represent ownership of unique items like artwork, collectibles, and more. With NFT sales reaching billions of dollars in 2021 alone, it’s clear that NFTs are much more than just a passing fad.

However, as with all things of significant value, the rise of NFTs has unfortunately been accompanied by a growing threat – NFT hacking and theft. As the prizes for hacking continue to grow, criminals are devoting more time and effort to developing strategies to steal coveted NFTs.

Recent high-profile cases like the Bored Ape Yacht Club hack, where over $3 million in NFTs were stolen, showcase the increasing risk. Since ownership records are stored on the blockchain, recovering stolen NFTs is extremely difficult.

That’s why it’s absolutely critical for NFT owners to learn how to properly secure their digital assets. This guide will explore key strategies and best practices for storing NFTs safely and guarding against hackers. Let’s dive in.

Choosing a Secure NFT Marketplace

The first step in securing your NFTs is only using trustworthy marketplaces for buying, selling, and storing your tokens. When evaluating platforms, research their reputation, security practices, and how they store user NFTs and transaction data.

Some key factors to examine when selecting a marketplace include:

• Security track record – Opt for established marketplaces like OpenSea or Rarible that have not suffered major breaches.
• Wallet options – Choose sites that allow using hardware wallets or external wallets versus holding tokens on the platform’s native wallet.
• Authentication methods – Favor marketplaces using sophisticated authentication like two-factor or multi-factor authentication.
• Community reviews – Check community forums and social media to gauge other users’ security experiences.
• Bug bounty programs – Platforms that incentivize white hat hacking and run bounty programs tend to have stronger security.

On the flip side, be wary of lesser-known marketplaces, especially ones that have lax authentication practices or don’t communicate how they’re securing user data and assets.

Using a Hardware Wallet for NFTs

One of the best ways to secure your NFT collection is by using a hardware wallet. These physical devices provide cold storage for private keys, allowing you to store crypto assets and NFTs offline away from hackers.

Popular hardware wallet options like Ledger and Trezor work seamlessly with NFT marketplaces while providing bank-grade security for your private keys.

Benefits of using a hardware wallet for NFTs:

• Private keys are generated and stored offline only on the device.
• Far more secure than using a hot wallet on an internet-connected device.
• Allows safely transacting NFTs without exposing keys.
• Special “NFT modules” on devices provide tailored NFT storage.

To start securing NFTs on a Ledger or Trezor, you’ll first need to purchase the physical device directly from the provider. Never buy used hardware wallets. Once received, initialize and set up your device while following the provided instructions closely.

Then you can use your hardware wallet’s Ethereum, Solana, or Polygon app to generate an associated wallet address for receiving and storing NFTs. Be sure to carefully write down and securely store your recovery phrase in case the device is lost or damaged.

Storing NFTs on Cold Wallets

Cold wallets represent another solid option for securing your NFT collection away from the dangers of being constantly internet-connected. These can come in multiple forms including:

• Paper wallets – Your wallet’s private and public keys printed out on paper.
• Physical USB drives – Encrypted USB drives that create air-gapped cold storage.
• Offline PCs – Old laptops with wallets holding private keys, kept disconnected.

To store NFTs on any cold wallet:

• Generate the cold wallet and record private key(s) and recovery phrase(s).
• Send NFTs to the associated public wallet address(es) for secure offline storage.
• When ready to transact or move NFTs, connect the cold wallet to sign transactions.
• Then disconnect it again for cold storage when done.

For maximum security, keep the cold wallet stored in a secure location like a deposit box when not needed.

Practicing Good Key Management

Since NFT ownership stems from having control of the private keys, properly securing keys is a top priority. Follow these key management best practices:

• Guard private keys – Never share or enter private keys unless absolutely necessary during transactions.
• Use password managers – Tools like 1Password let you generate and store ultra-strong passwords.
• Enable MFA – Use multi-factor authentication (MFA) for added protection on accounts with key access.
• Consider multisig – Multisignature wallets require multiple sign-offs to transact assets.
• Avoid key re-use – Generate unique key pairs for each wallet to limit exposure.

Securing Your Devices

Since your devices are the gateway to your NFT accounts and keys, they must be treated as securely as your valuables.

• Use clean, dedicated devices for NFT storage that are not exposed to risky online activity.
• Keep all devices completely free of malware, viruses, and keyloggers using antimalware suites.
• Set strong passwords, adjust privacy settings, and enable two-factor authentication wherever possible.

Avoiding Phishing Scams

With so much value at stake, the NFT landscape is rife with phishing scams attempting to steal keys and assets. Be vigilant against:

• Fake emails posing as legitimate NFT marketplaces.
• Malicious links promising early access to coveted NFT drops.
• Suspicious messages offering amazing deals or free giveaways.

Only access NFT sites directly by manually entering the URL – never via links, to avoid being directed to convincing phishing sites set up to steal your information.

Monitoring Your NFTs

Carefully monitoring your NFT holdings and activity can help detect unauthorized transactions early before major damage is done.

• Use blockchain explorers to monitor wallet transactions and NFT holdings.
• Set up alerts for suspicious transactions so you’re notified of transfers.
• If you see unauthorized activity, take swift action to secure your accounts.

Practicing General Online Security

Since NFTs exist entirely online, following sound general online security practices is key for protection.

• Use a VPN when accessing NFT sites and wallets on public/unsecured networks.
• Ensure home and work WiFi networks are properly secured with strong encryption.
• Avoid accessing NFT accounts from public computers.

Backing Up Your NFTs

If you suffer a lost or corrupted wallet, getting locked out of your NFT holdings could be devastating. That’s why backing them up is crucial.

• Back up any software or hardware wallets securing your NFTs.
• Encrypt backups and store them in secure offline locations.
• Test backups regularly by restoring to a fresh wallet.

Securing Your Email

Since email is commonly used for NFT account recovery, having a secure email is a must.

• Use a dedicated email address just for your NFT accounts and communications.
• Enable strong two-factor or multi-factor authentication on your email.
• Monitor your email closely for any unauthorized activity.

Spreading Out NFTs Across Accounts

Storing your entire NFT collection within a single wallet leaves you massively exposed in case of a hack. That’s why spreading holdings across multiple wallets helps mitigate risks.

• Create several software and hardware wallets to divide up your NFTs.
• Store only a portion of your collection within each wallet.
• This adds work but can limit losses in case any individual wallet is breached.

Using Trustworthy NFT Investment Services

If looking to invest in NFTs without collecting them directly, carefully vet any investment platforms or fund managers.

• Research the team’s credentials and look for a strong track record.
• Avoid “too good to be true” offerings with guaranteed high returns, as these are likely scams.
• Favor platforms following sound security practices with external auditing.

Maintaining Device Security

Keep the devices storing and transacting your NFTs patched, secure, and up-to-date.

• Install the latest OS and security updates regularly.
• Use a password manager to generate and store strong passwords.
• Avoid “jailbreaking” devices used for NFT storage.

Securing Your Home Network

Your home WiFi network should have proper protections in place against intrusions.

• Use a strong firewall and antivirus software suite.
• Change default administrative passwords and WiFi network names.
• Only provide WiFi access via a guest network with restrictions.

Being Cautious on Social Media

When using social media, be extremely wary of unsolicited messages about NFT opportunities. These often come from scammers seeking targets.

• Set social media profiles to private to limit visibility.
• Avoid clicking links about NFTs sent via social media messages. Verify legitimacy first.

Monitoring Account Activity

Keep a close eye on your account activity across NFT marketplaces, wallet providers, email, and social media.

• Use transaction notifications and email alerts for suspicious activity.
• Periodically review account logs and transaction histories for unauthorized transactions.

Educating Yourself on New Threats

As hackers develop more sophisticated tactics, you’ll want to stay informed on emerging NFT threats.

• Keep up with NFT security news and reports of new hacking methods.
• Learn to identify signs of new scam methods like deepfakes.
• When in doubt, always err on the side of caution.

Limiting Public Information

Be careful not to share too many details about your NFT holdings publicly, as this can attract hacking attempts.

• Avoid disclosing the sizes or values of your collection.
• Use pseudonyms rather than real names on marketplaces when possible.
• Share the minimum amount of personal info needed when setting up accounts.

Diversifying Assets

Don’t keep all your valuables solely concentrated in NFTs. Spread out risk by diversifying.

• Diversify into cryptocurrencies, real estate, stocks, and other assets.
• Don’t invest more into NFTs than you can afford to lose.
• Diversity protects if NFT holdings are compromised.

Using Trusted Friends or Family as Account Guardians

Appoint trusted contacts as “account guardians” with the knowledge to recover your accounts if necessary.

• Provide them the means to access or recover your accounts if you’re unable.
• Ensure they have proper secure storage to safeguard any sensitive information.

Reporting Scams and Threats

If you uncover an NFT phishing scam or have assets stolen, report it! This helps protect the community.

• Alert NFT marketplaces so they can block bad actors.
• Report stolen NFTs through marketplaces to potentially aid recovery.
• File reports about thefts with authorities – they’re still crimes.

Establishing a Secure Physical Location

For maximum security of crucial items like backup drives, store them in secure physical locations.

• Use a bank safe deposit box to securely store any physical wallet backups.
• Establish secure locations away from your primary residence as backups.
• Allow trusted contacts access in case you’re ever unable to physically access.

Planning for Emergency Account Recovery

Have clear, documented plans in place for restoring access to accounts in case of emergencies or security incidents.

• Outline step-by-step account recovery procedures for each NFT marketplace or wallet provider.
• Ensure trusted friends or family know the procedures in case you’re unable to recover accounts yourself.
• Have sufficient funds ready to cover gas fees required for initiating recovery.

Understanding On-Chain Security Practices

While basic for some, researching on-chain data encryption and security models used by NFT projects can be worthwhile.

• Learn about practices like on-chain encryption.
• Evaluate if projectsfollow sound on-chain data storage models.
• Factor a project’s on-chain security into investment decisions.

Learning Proper Wallet Management

Following the best practices for setting up, accessing, and managing your NFT wallets is key for security.

• Enable IP whitelisting features on wallets when available.
• Use unique, ultra-strong passwords for each wallet.
• Frequently update wallet software and apps to the latest secure versions.

Evaluating Risks of NFT Lending & Borrowing

While lending NFTs can provide yield, carefully assess platforms and risks if planning to use NFTs as collateral.

• Vet platforms thoroughly and understand loan terms before supplying collateral.
• Weigh potential yields versus the risks of losing collateral if loans default.
• Use the minimum amount of collateral possible to mitigate risks.

Establishing a Secure NFT Estate Plan

To ensure your NFTs are passed on if something happens, establish a secure NFT estate plan.

• Provide instructions for accessing NFT accounts in your will.
• Designate trusted executors and provide the means to access or recover your accounts.
• Clearly detail locations of any physical backups like seed phrases.

Staying Cautious of Social Engineering

“Social engineering” plays a big role in NFT hacking – tricking owners via psychological manipulation. Stay vigilant against requests trying to exploit sympathy or urgency to gain access or information. Verify identities extensively for any sensitive activities.

Keeping Perspective on Total Asset Security

While crucial, remember that securing your NFTs is just one part of sound cybersecurity practices. Be sure not to overlook:

• Securing your online identities, emails, and social media from compromise.
• Keeping banking accounts and credit cards safe via strong protections.
• Following sound financial planning and asset management beyond just NFTs.

Final Thoughts

While NFTs represent an exciting new digital asset class, owners must learn how to navigate risks like hacking. Follow the tips outlined in this guide to securely store, manage, and protect your NFT collection from theft or loss.

Pay particularly close attention to securing your wallets, private keys, devices, emails, networks, and online identities. Be vigilant for phishing attempts and other social engineering tactics aimed at gaining access to accounts and keys.

No single tip can make you completely immune from hacking. But putting these security practices into action can help deter criminals and minimize risks as much as possible.

Here’s to safely enjoying your NFT investments! Just remember to keep your guard up in this still-maturing space as new threats arise.

Non-fungible tokens (NFTs) have exploded in popularity over the last couple years. These digital assets represent ownership of unique items like artwork, collectibles, and more. With NFT sales reaching billions of dollars in 2021 alone, it’s clear that NFTs are much more than just a passing fad.

However, as with all things of significant value, the rise of NFTs has unfortunately been accompanied by a growing threat – NFT hacking and theft. As the prizes for hacking continue to grow, criminals are devoting more time and effort into developing strategies to steal coveted NFTs.

Recent high-profile cases like the Bored Ape Yacht Club hack, where over $3 million in NFTs were stolen, showcase the increasing risk. Since ownership records are stored on the blockchain, recovering stolen NFTs is extremely difficult.

That’s why it’s absolutely critical for NFT owners to learn how to properly secure their digital assets. This guide will explore key strategies and best practices for storing NFTs safely and guarding against hackers. Let’s dive in.

Choosing a Secure NFT Marketplace

The first step in securing your NFTs is only using trustworthy marketplaces for buying, selling and storing your tokens. When evaluating platforms, research their reputation, security practices, and how they store user NFTs and transaction data.

Some key factors to examine when selecting a marketplace include:

• Security track record – Opt for established marketplaces like OpenSea or Rarible that have not suffered major breaches.
• Wallet options – Choose sites that allow using hardware wallets or external wallets versus holding tokens on the platform’s native wallet.
• Authentication methods – Favor marketplaces using sophisticated authentication like two-factor or multi-factor authentication.
• Community reviews – Check community forums and social media to gauge other users’ security experiences.
• Bug bounty programs – Platforms that incentivize white hat hacking and run bounty programs tend to have stronger security.

On the flip side, be wary of lesser-known marketplaces, especially ones that have lax authentication practices or don’t communicate how they’re securing user data and assets.

Using a Hardware Wallet for NFTs

One of the best ways to secure your NFT collection is by using a hardware wallet. These physical devices provide cold storage for private keys, allowing you to store crypto assets and NFTs offline away from hackers.

Popular hardware wallet options like Ledger and Trezor work seamlessly with NFT marketplaces while providing bank-grade security for your private keys.

Benefits of using a hardware wallet for NFTs:

• Private keys are generated and stored offline only on the device.
• Far more secure than using a hot wallet on an internet-connected device.
• Allows safely transacting NFTs without exposing keys.
• Special “NFT modules” on devices provide tailored NFT storage.

To start securing NFTs on a Ledger or Trezor, you’ll first need to purchase the physical device directly from the provider. Never buy used hardware wallets. Once received, initialize and set up your device while following the provided instructions closely.

Then you can use your hardware wallet’s Ethereum, Solana, or Polygon app to generate an associated wallet address for receiving and storing NFTs. Be sure to carefully write down and securely store your recovery phrase in case the device is lost or damaged.

Storing NFTs on Cold Wallets

Cold wallets represent another solid option for securing your NFT collection away from the dangers of being constantly internet-connected. These can come in multiple forms including:

• Paper wallets – Your wallet’s private and public keys printed out on paper.
• Physical USB drives – Encrypted USB drives that create air-gapped cold storage.
• Offline PCs – Old laptops with wallets holding private keys, kept disconnected.

To store NFTs on any cold wallet:

• Generate the cold wallet and record private key(s) and recovery phrase(s).
• Send NFTs to the associated public wallet address(es) for secure offline storage.
• When ready to transact or move NFTs, connect the cold wallet to sign transactions.
• Then disconnect it again for cold storage when done.

For maximum security, keep the cold wallet stored in a secure location like a deposit box when not needed.

Practicing Good Key Management

Since NFT ownership stems from having control of the private keys, properly securing keys is a top priority. Follow these key management best practices:

• Guard private keys – Never share or enter private keys unless absolutely necessary during transactions.
• Use password managers – Tools like 1Password let you generate and store ultra-strong passwords.
• Enable MFA – Use multi-factor authentication (MFA) for added protection on accounts with key access.
• Consider multisig – Multisignature wallets require multiple sign-offs to transact assets.
• Avoid key re-use – Generate unique key pairs for each wallet to limit exposure.

Securing Your Devices

Since your devices are the gateway to your NFT accounts and keys, they must be treated as securely as your valuables.

• Use clean, dedicated devices for NFT storage that are not exposed to risky online activity.
• Keep all devices completely free of malware, viruses and keyloggers using antimalware suites.
• Set strong passwords, adjust privacy settings, and enable two-factor authentication wherever possible.

Avoiding Phishing Scams

With so much value at stake, the NFT landscape is rife with phishing scams attempting to steal keys and assets. Be vigilant against:

• Fake emails posing as legitimate NFT marketplaces.
• Malicious links promising early access to coveted NFT drops.
• Suspicious messages offering amazing deals or free giveaways.

Only access NFT sites directly by manually entering the URL – never via links, to avoid being directed to convincing phishing sites set up to steal your information.

Monitoring Your NFTs

Carefully monitoring your NFT holdings and activity can help detect unauthorized transactions early before major damage is done.

• Use blockchain explorers to monitor wallet transactions and NFT holdings.
• Set up alerts for suspicious transactions so you’re notified of transfers.
• If you see unauthorized activity, take swift action to secure your accounts.

Practicing General Online Security

Since NFTs exist entirely online, following sound general online security practices is key for protection.

• Use a VPN when accessing NFT sites and wallets on public/unsecured networks.
• Ensure home and work WiFi networks are properly secured with strong encryption.
• Avoid accessing NFT accounts from public computers.

Backing Up Your NFTs

If you suffer a lost or corrupted wallet, getting locked out of your NFT holdings could be devastating. That’s why backing them up is crucial.

• Back up any software or hardware wallets securing your NFTs.
• Encrypt backups and store them in secure offline locations.
• Test backups regularly by restoring to a fresh wallet.

Securing Your Email

Since email is commonly used for NFT account recovery, having a secure email is a must.

• Use a dedicated email address just for your NFT accounts and communications.
• Enable strong two-factor or multi-factor authentication on your email.
• Monitor your email closely for any unauthorized activity.

Spreading Out NFTs Across Accounts

Storing your entire NFT collection within a single wallet leaves you massively exposed in case of a hack. That’s why spreading holdings across multiple wallets helps mitigate risks.

• Create several software and hardware wallets to divide up your NFTs.
• Store only a portion of your collection within each wallet.
• This adds work but can limit losses in case any individual wallet is breached.

Using Trustworthy NFT Investment Services

If looking to invest in NFTs without collecting them directly, carefully vet any investment platforms or fund managers.

• Research the team’s credentials and look for a strong track record.
• Avoid “too good to be true” offerings with guaranteed high returns, as these are likely scams.
• Favor platforms following sound security practices with external auditing.

Maintaining Device Security

Keep the devices storing and transacting your NFTs patched, secure, and up-to-date.

• Install the latest OS and security updates regularly.
• Use a password manager to generate and store strong passwords.
• Avoid “jailbreaking” devices used for NFT storage.

Securing Your Home Network

Your home WiFi network should have proper protections in place against intrusions.

• Use a strong firewall and antivirus software suite.
• Change default administrative passwords and WiFi network names.
• Only provide WiFi access via a guest network with restrictions.

Being Cautious on Social Media

When using social media, be extremely wary of unsolicited messages about NFT opportunities. These often come from scammers seeking targets.

• Set social media profiles to private to limit visibility.
• Avoid clicking links about NFTs sent via social media messages. Verify legitimacy first.

Monitoring Account Activity

Keep a close eye on your account activity across NFT marketplaces, wallet providers, email, and social media.

• Use transaction notifications and email alerts for suspicious activity.
• Periodically review account logs and transaction histories for unauthorized transactions.

Educating Yourself on New Threats

As hackers develop more sophisticated tactics, you’ll want to stay informed on emerging NFT threats.

• Keep up with NFT security news and reports of new hacking methods.
• Learn to identify signs of new scam methods like deepfakes.
• When in doubt, always err on the side of caution.

Limiting Public Information

Be careful not to share too many details about your NFT holdings publicly, as this can attract hacking attempts.

• Avoid disclosing the sizes or values of your collection.
• Use pseudonyms rather than real names on marketplaces when possible.
• Share the minimum amount of personal info needed when setting up accounts.

Diversifying Assets

Don’t keep all your valuables solely concentrated in NFTs. Spread out risk by diversifying.

• Diversify into cryptocurrencies, real estate, stocks, and other assets.
• Don’t invest more into NFTs than you can afford to lose.
• Diversity protects if NFT holdings are compromised.

Using Trusted Friends or Family as Account Guardians

Appoint trusted contacts as “account guardians” with knowledge to recover your accounts if necessary.

• Provide them the means to access or recover your accounts if you’re unable.
• Ensure they have proper secure storage to safeguard any sensitive information.

Reporting Scams and Threats

If you uncover an NFT phishing scam or have assets stolen, report it! This helps protect the community.

• Alert NFT marketplaces so they can block bad actors.
• Report stolen NFTs through marketplaces to potentially aid recovery.
• File reports about thefts with authorities – they’re still crimes.

Establishing a Secure Physical Location

For maximum security of crucial items like backup drives, store them in secure physical locations.

• Use a bank safe deposit box to securely store any physical wallet backups.
• Establish secure locations away from your primary residence as backups.
• Allow trusted contacts access in case you’re ever unable to physically access.

Planning for Emergency Account Recovery

Have clear, documented plans in place for restoring access to accounts in case of emergencies or security incidents.

• Outline step-by-step account recovery procedures for each NFT marketplace or wallet provider.
• Ensure trusted friends or family know the procedures in case you’re unable to recover accounts yourself.
• Have sufficient funds ready to cover gas fees required for initiating recovery.

Understanding On-Chain Security Practices

While basic for some, researching on-chain data encryption and security models used by NFT projects can be worthwhile.

• Learn about practices like on-chain encryption.
• Evaluate if projectsfollow sound on-chain data storage models.
• Factor a project’s on-chain security into investment decisions.

Learning Proper Wallet Management

Following the best practices for setting up, accessing, and managing your NFT wallets is key for security.

• Enable IP whitelisting features on wallets when available.
• Use unique, ultra-strong passwords for each wallet.
• Frequently update wallet software and apps to the latest secure versions.

Evaluating Risks of NFT Lending & Borrowing

While lending NFTs can provide yield, carefully assess platforms and risks if planning to use NFTs as collateral.

• Vet platforms thoroughly and understand loan terms before supplying collateral.
• Weigh potential yields versus the risks of losing collateral if loans default.
• Use the minimum amount of collateral possible to mitigate risks.

Establishing a Secure NFT Estate Plan

To ensure your NFTs are passed on if something happens, establish a secure NFT estate plan.

• Provide instructions for accessing NFT accounts in your will.
• Designate trusted executors and provide the means to access or recover your accounts.
• Clearly detail locations of any physical backups like seed phrases.

Staying Cautious of Social Engineering

“Social engineering” plays a big role in NFT hacking – tricking owners via psychological manipulation. Stay vigilant against requests trying to exploit sympathy or urgency to gain access or information. Verify identities extensively for any sensitive activities.

Keeping Perspective on Total Asset Security

While crucial, remember that securing your NFTs is just one part of sound cybersecurity practices. Be sure not to overlook:

• Securing your online identities, emails, and social media from compromise.
• Keeping banking accounts and credit cards safe via strong protections.
• Following sound financial planning and asset management beyond just NFTs.

Final Thoughts

While NFTs represent an exciting new digital asset class, owners must learn how to navigate risks like hacking. Follow the tips outlined in this guide to securely store, manage, and protect your NFT collection from theft or loss.

Pay particularly close attention to securing your wallets, private keys, devices, emails, networks, and online identities. Be vigilant for phishing attempts and other social engineering tactics aimed at gaining access to accounts and keys.

No single tip can make you completely immune from hacking. However, putting these security practices into action can help deter criminals and minimize risks as much as possible.

Here’s to safely enjoy your NFT investments! Just remember to keep your guard up in this still-maturing space as new threats arise.