Non-Fungible Token or NFT is a blockchain-based cryptographic asset with unique identification codes and metadata added to a file, creating a unique signature. It can be in the form of an image file, song, tweet, physical item, digital art, and other digital formats.
Fungibility means the ability of a good or asset to be interchanged with other goods or assets of another identical item, like Bitcoin. In contrast, non-fungible means irreplaceable or unable to be replicated with another. Hence, it is unique. Moreover, a token represents some value, which means a non-fungible token holds a unique value.
To further elaborate, NFT is a means of asserting ownership of a unique digital asset. Currently, the most popular application for NFTs has been digital artwork, allowing artists and creators to showcase their creations and collections while monetizing them. When someone owns a digital file, it is marked with code distinguishing them from any digital files.
People might wonder why someone is willing to pay for something easily viewed and shared. In the NFT market, value is subjective and can change depending on what a person can pay. NFTs are not only limited to visual and art mediums. In truth, there are nine main categories of NFTs, and these include art, music, video game items, trading cards and collectibles, sports highlights, memes, and GIFs, domain names, virtual fashion, and other pop culture items.
During the past 12 months, the popularity of NFTs has exploded, with investors pouring billions of dollars in the third quarter of 2021. However, with the amount that investors have poured, NFTs became a primary target for hackers similar to cryptocurrencies.
Using weak authentication measures when securing NFT is proven to be a costly mistake. There are vulnerabilities in the NFT market, and since it is stored in digital wallets, it can prompt bad actors to compromise them should they gain access to it. Using passwords alone to secure any digital wallet can invite hackers to commit fraudulent acts. It is best to use KYC authentication to prevent these attacks from happening.
A secure authentication method like fido2 key is based on a private key, cryptography. During registration, the user only needs to use their biometric to access their account securely.
Visit LoginID’s website to learn more about NFTs and best protect them.