In 2021, the market for non-fungible tokens, most commonly known as NFTs, has grown exponentially with top-tier pieces selling for millions of dollars. However, the soaring prices of NFTs have also attracted hackers and scammers alike. In most cases, these fraudsters take advantage of social media platforms such as Discord and Telegram to target NFT collectors and get a hold of their most valued possessions. With this, NFT artists, developers and investors are encouraged to take a significant step in storing and securing their NFTs.
What are NFT Storage Options?
When it comes to storing NFTs, ensuring maximum security is always a must. Leaving them on marketplace platforms is never a good idea as it leaves you vulnerable to possible attacks or a single point of failure.
Fortunately, there are various NFT storage options that offer excellent security. When choosing from different storage solutions, make sure to consider compatibility across different blockchains and with the marketplace you will use to buy and/or sell NFTs.
Software wallets, also called online wallets, are one of the most popular methods used to store NFTs. Its user-friendly interface makes software wallets the most preferred option when it comes to storing NFT.
Most software wallets offer both mobile and web applications. They are secured with encryption, a password and a 12-24 word seed phrase. Since they are connected to the internet, software wallets like Metamask, are easier to use and set up compared to other NFT storage options. However, this also makes them susceptible to hacks as they can be accessed by any browser. In fact, one of the biggest disadvantages of software wallets is that they only provide a standard level of security.
InterPlanetary File System
An InterPlanetary File System (IPFS) is a peer-to-peer hypermedia protocol that allows users to store NFTs off-chain, reducing the risks of cyberattacks. Instead of using standard location-based addressing, IPFS changes how information is distributed to the world through content-based addressing. Once you add a file in IFPS, your file will be split into smaller pieces and given a unique fingerprint called a content identifier (CID).
Since the CID is directly connected to your NFT, it acts as a permanent record of your file. This means that once you have stored your file on IPFS, your file cannot be censored or tampered with. Thus, providing you with maximum security.
Cold Storage Hardware Wallet
Compared to all NFT storage options, cold storage hardware wallets provide the safest way to store your NFTs. It is a physical device, generally similar to a USB device that you use to store files from your computer. Except, in this case, you are storing NFTs. Popular cold storage hardware wallets include Ledger and Trezor.
To gain access to the information stored in a hardware wallet, you will need to physically plug the device into your computer. Since all of your digital assets will be stored on the said device rather than on an online server, it would be impossible to hack and steal your NFTs.
While storing your NFTs on a hardware wallet can be more expensive than other solutions, the level of security it can provide might be worth considering for those investors who own a good amount of NFTs.
Conclusion: Keeping Your NFTs Safe
Storing your NFTs should not be stressful at all. With the wide variety of storing options available in the market, there are great solutions for everyone and every requirement.
For those investors who are willing to spend more on the security of their NFTs, it is better to store your assets in cold storage hardware wallets as they provide the most secure way to mitigate the risk of cyberattacks and data breaches.