To secure NFTs against hackers and scammers, experts in the Web3 domain highlighted a variety of solutions and recommended practises.
Nonfungible Tokens (NFTs) draw more users, but scammers are also interested in them. Digital treasures have caught the attention of Web3’s bad actors, who have lost millions through frauds and other types of attacks.
However, experts in the Web3 industry claim that there are numerous strategies and resources available to help protect against falling victim to NFT theft. Users can also take a variety of options after experiencing hacks that result in the loss of their digital collectibles.
The co-founder and CEO of blockchain security company CertiK, Ronghui Gu, told Cointelegraph that conducting due diligence is always the first and most crucial step. Avoid clicking on shady URLs, and exercise extreme caution when signing the token authorization, advised Gu.
The CEO went one step further and revealed additional best practises, such as regularly reviewing and revoking unnecessary permissions and separating NFTs into distinct wallets based on their intended use. He further clarified that:
“Long-term holds should be kept in a secure wallet that interacts minimally, if at all, with applications. Hardware wallets have a somewhat steep learning curve, but the time investment is worth it.”
When asked what can be done if the assets are lost, Gu replied that customers have “not a lot” of options and that it is terrible that this is the case. However, NFT markets can put NFTs on a blacklist and prevent trading with them. “Increasing public knowledge of typical frauds is a continuous effort. The first step, he continued, is educating users about the riskiest ways to transact and how they might reduce it.
Here are some resources to help artists deal with the growing problem of plagiarized art on NFT marketplaces. A few of these are links that have been shared with us, but we have not had the chance test ourselves. Please add you experiences/suggestions to help others:— NFT thefts (@NFTtheft) December 27, 2021
Although hardware wallets might be a fantastic solution, there are still hazards, according to Michael Pierce, CEO of Web3 security company NotCommon. He detailed this:
“People should buy the hardware directly from the manufacturer to minimize any chance the wallet has been tampered with before the person receives it.”
Meanwhile, if the scam or attack has already taken place, Pierce encourages victims to report it to databases such as NotCommon “to protect other users and identify the scammers.” If the potential loss is significant, executives urged victims to seek legal action if possible.
Senior strategist Mohamed Issa from the data company Chainalysis also contributed some knowledge on the subject. Issa claims that as one of the crypto industry’s fastest-growing sectors, NFTs are turning into a “go-to target for hackers.” He detailed this:
“NFT transactions are creating a new challenge for cryptocurrency investigation as decentralized protocols are more complex and very difficult to trace compared to traditional centralized services.”
Issa also spoke with Cointelegraph about the significance of taking preventative measures when a theft occurs. He argues that even while it’s crucial to report scams and hacks to law enforcement, NFT holders may safeguard their investment with tools like Storyline, an analytical programme developed by their company.
Issa thinks that the programme can help users aid investigators after they have been hacked and assist them in focusing on the transactions and funds that are most crucial.