How to store NFT assets online and offline; Quick guide for beginners

by James · January 5, 2023

Non-fungible tokens, or NFTs, have recently gained popularity. This is not surprising, especially when you hear about artists making tens of millions of dollars selling a single NFT. NFT’s assets have skyrocketed in the market in the past year alone. Trade in NFTs increased from $100 million in 2020 to a staggering $22 billion in 2021, according to tracking company DappRadar. The combined value of the top 100 NFTs is $16.7 billion.

Table of Contents

What are NFT’s assets?

NFT stands for Non-Fungible Tokens. These non-fungible tokens are digitized tokens of physical assets such as art, music, albums and so on. These digitized tokens are currently worth less than physical assets, but some of them are worth millions of dollars. It emphasizes the importance of learning how to store NFTs securely to avoid losing access to your NFT investments.

Before the advent of blockchain technology, digital assets were less popular than they are now. But due to poor distribution and lack of ownership in the centralized ecosystem. The owner of digital assets could not track their distribution, causing them to lose value. Blockchain provides an immutable digital ledger that allows creators and artists to validate the original part of their creation and manage their assets without the use of intermediaries.

also read: Top 5 NFT Trading Strategies

The expanding market for NFT’s assets

According to a survey, the exponential growth began in 2021. The global NFT market increased from 13.7 million to 2.5 billion dollars. People traded NFTs in large quantities, with total sales exceeding $5 billion. In October, the most popular NFT marketplace, OpenSea, hit an all-time high of $1 billion in sales.

According to industry data from Cryptoslam.io, global NFT sales peaked at around $4.9 billion in January 2022, but have since fallen to only around $565 million so far in December. The amount is about 80% less than December 2021’s $2.8 billion sale of non-fungible tokens.

The popularity of NFTs has grown significantly with the rise of blockchain technology. With the Blockchain Council’s lifetime NFT certifications, you can become an NFT expert today.

Why is it crucial to properly store NFT’s assets?

Non-fungible tokens have evolved into valuable, scarce assets over time. For those interested in how NFTs can be hacked if supported by blockchain technology, it has successfully attracted investors and hackers. The security of NFTs largely depends on how you store them. Keys stored by the owner can be used to access NFTs. If someone manages to get the access key to NFTs, they are free to take ownership.

However, with blockchain Ledger technology, it can be followed. Similar incidents where hackers stole digital assets from Nifty Gateway, an NFT marketplace, have happened before. However, a careful examination of the company’s security showed that it had not been compromised. What caused it then? Well, wrong NFT storage is the cause of this. In the world of cryptocurrencies, there is a saying, “If you don’t have the keys, you don’t own the crypto.” It also involves NFTs because, without access to one’s wallet keys, one cannot access NFTs.

Storage options for NFT’s assets

Security is just as important for NFT storage as it is for cryptocurrency storage. You risk becoming the target of hacks, exchange scams or single points of failure if you leave them on an exchange.

Decentralized blockchain-based storage is much more secure than centralized storage of digital assets and gives owners full control over their assets. In addition, it offers a variety of options for increased mental clarity.

It is important to keep in mind that you should not have cryptocurrency or NFTs in your wallet. Instead, a wallet uses a private key to secure access to the investments stored on the blockchain.

Also read: What is physical NFT?

How to store NFT assets offline?

Therefore, it is crucial to store and store NFTs in offline cold storage solutions. This requires storage in a platform that is not connected to the internet and is thus less vulnerable to unauthorized access, cyber attacks and other errors common to data connected to the internet.

By purchasing a cold storage hardware wallet and transferring the digital assets there, you can store NFTs offline in the best possible way. The wallet will not be accessible to hackers and keyloggers because it will not be online. Each hardware wallet also includes a password and ID for added security.

Steps to Protect NFT’s Assets Privacy

Step 1: Long-term offline storage of digital assets
Step 2: Using a 12-24 word recovery key, also known as a seed phrase, access your digital wallet. Make sure you never give it to anyone or enter it online.
Step 3: Use all available data security measures, such as two-factor authentication and complex passwords.
Step 4: Make sure you don’t give anyone access to your login information.
Step 5: Make sure you never store passwords and seed phrases on your computer. Be sure to always lock them away and store them on paper in physical form.
Step 6: Avoid dangerous or unknown websites
Step 7: Another option is to hide your internet protocol using a virtual private network.

Standard methods for storing NFT’s assets

Software wallets

Software wallets are online and easy ways for novice and non-technical users to store NFTs. These wallets are the most popular option for common people and the user interface is relatively friendly. One of the most famous software wallets that provide basic security for your non-fungible tokens is MetaMask. A 12-24 word seed phrase and a password are used to encrypt and secure MetaMask transactions. These digital wallets, like MetaMask, are online and open to hacker attacks. Enjin and Math wallet are two more popular MetaMask alternatives.

Interplanetary Archive System

The Interplanetary Filing System is a peer-to-peer hypermedia protocol that enables users to store their non-fungible tokens off-chain. The way information is spread around the world has changed. Unlike other systems, IPFS uses content-based addressing as opposed to the more common location-based addressing. When a user adds a file to IPFS, the file is broken into smaller pieces and encrypted hash. Each of these smaller pieces is given a distinct fingerprint known as a CID, or content identifier. These CIDs are hashes that are directly associated with non-fungible tokens.

Hardware wallet

A cold, offline or hardware wallet is the most common and effective security option for storing non-fungible tokens. It indicates that the private keys necessary to access a non-fungible token’s ownership are kept in a physical hardware wallet that is not online. It reduces the sensitivity of wallet gadgets. As an added security measure, it also has two-factor authentication. Without physical access to the hardware wallet, it is impossible to hack it. Users’ most preferred hardware wallets for storing non-fungible tokens are Ledger and Trezor.

Conclusion

Non-fungible tokens are expanding rapidly and users need to be made aware of the increasing risks associated with digital assets. Inadequate storage and security measures are usually blamed for a hacker’s inability to recover keys to NFTs. Because NFTs are so common, companies have begun to create solutions that raise security standards. When it comes to threats and countermeasures related to non-fungible tokens, the NFT certification from the Blockchain Council provides a thorough and in-depth understanding.

Also read: Explain the NFT Whitelist. How do you join an NFT whitelist?