Non-fungible tokens (NFTs) are digital assets that are cryptographically protected on a blockchain and include unique identification codes and metadata. Ex: That Beeple artwork that sold for $ 69 million.
In a very short time, NFTs have grown in popularity and have become one of the most promising uses of blockchain technology. However, they carry significant security risks.
A risky business
The security problem arises in part from a poor understanding of NFTs. On top of that, they constitute a part of an overrated blockchain technology that can open doors to security threats.
NFTs also carry the potential for theft. NFTs stolen from compromised accounts can be sold to the highest bidder, leaving the original owner stranded.
A pot of trouble
When NFTs were developed, they had a technological limitation. This being the inability of blockchain records to contain a complete image file due to the size of the first.
Therefore, a workaround was developed: the encrypted web addresses on the blockchain act as links to the NFT assets.
Why does that matter?
As this solution is still in place, NFT buyers have access to links on live websites instead of blockchain-based tokens. As a result, if attackers break into these websites or go out of business, all NFT values could be gone in no time.
More token problems
Recently, a threat actor tried to sell a zero-day exploit as part of an NFT collection. They probably ended up making a lot of money, as well as exposing companies to cyber risks. This is cause for concern as this risk will only increase as NFT prices stabilize and markets diversify. This means that it could be impractical for organizations to ensure that exploit-based data is not sold to the highest bidder and is subsequently used to compromise those networks.
NFTs have emerged as a valuable assets, but with that, they have also emerged as a potential attack vector. Therefore, it is time for organizations to consider these tokens in their security strategies. The security threat posed by NFTs cannot be ignored.