Just at a time when consumers are finally beginning to understand cryptocurrencies, a new kid has hit the block, blockchain that is, and that would be NFTs, Non-Fungible Tokens. Actually, NFTs are based on Ethereum technology so they hit the scene at the same point in time when Ethereum’s crypto was released and that would be late 2014 to early 2015. While Bitcoin had been around for half a decade prior to Ethereum, and also rooted in blockchain technology, Ethereum’s blockchain encompasses so much more than crypto. It is a system of ledger entries that can authenticate ownership of literally any kind of media.
In a World Where Transparency and Authenticity Are at Risk
At this point, it isn’t exactly a matter of what they are but rather how important they are in a world where transparency and authenticity are often at risk. A single NFT created with software available on sites like NFT Marketplace at OKX.com with the purpose of authenticating ownership of a digital design can be worth tens of thousands, if not millions of US dollars. It can then be held or traded as ownership of the underlying asset much safer and more securely.
In other words, the NFT authenticates the origin of the digital art and can track subsequent owners, authenticating the current owner. NFTs are digital ledgers in the blockchain that are immutable and can have only one owner at one time. Non-fungible tokens cannot be changed because they are inextricably linked to the underlying asset, and they can’t be broken into smaller bits like crypto or fiat such as a $5 bill into five $1 bills. Once again, this means that an NFT always stays with the underlying asset, but the underlying asset can be bought and sold and is undeniably the property of a single owner at a given time.
Safeguarding (Storing) Your NFTs Made Easy
Although blockchain technology is among the most difficult to hack, it isn’t totally ‘unhackable.’ This is where it gets a bit sticky from a technological vantage point but there are easy ways of explaining this to a total newbie. Several years back there was an app that could read the relative heat signature on a number pad at a cash machine. The user would glance around and with no one close enough to read the pin they were typing in, they thought they were safe.
They completed their transaction and walked away. The next person up had an app on their mobile phone that read the heat signature on keys. The darkest one was the most recent digit pressed and the lightest heat signature was the first. In working backwards, they could gain the pin number of the person in front of them, and they would use that to capture the pin while the app literally hacked into the banking system to read the card number. That is basically how that hack worked and similar to what can happen to your NFT if left on an exchange with hundreds or thousands of other NFTs. However, you do have that private key, that code, that would recognize you as the owner in order to let you access your NFTs.
The Best Advice You Can Be Given
In the end, the best advice you can be given is to immediately take that NFT offline by storing it in what is called a cold storage wallet. This is usually a small USB storage device that obviously can’t be accessed once you pull it out and it goes offline. No matter what other security measures you take or how seemingly inaccessible your account and ledgers are, there is always the chance of a super-hacker gaining access if they can be in the same ‘room’ so to speak. Immediately download your NFTs onto that cold storage device and it’s as good as being held in Fort Knox – as long as you don’t misplace it that is!