Non-Fungible Tokens (NFTs) are digital assets that are cryptographically protected on a blockchain and include unique identification codes and metadata. Ex: That Beeple art piece that sold for $69 million.
In a very short time, NFTs have gained huge popularity and have become one of the most promising utilizations of blockchain technology. However, they come with significant security risks.
A risky business
- The security problem partly arises from a poor understanding of NFTs. on top of that, they constitute a part of an overpriced blockchain technology that can open up doors for security threats.
- NFTs also come with a chance of theft. Stolen NFTs from compromised accounts can be sold to the highest bidder, leaving the original owner abandoned to their fate.
A pot of trouble
- When NFTs were developed, they had a technological limitation. This being the incapability of blockchain records to hold a complete image file due to the former’s size.
- Therefore, a workaround was developed - blockchain-encrypted web addresses act as links to NFT assets.
Why does it matter?
As this workaround 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 if the companies go out of business, all NFT values could disappear in a moment.
More token trouble
Recently, a threat actor attempted to sell a zero-day exploit as part of an NFT collection. They probably ended up making big money, as well as exposed enterprises to cyber risks. This comes as a concern since this risk will only grow as NFT prices stabilize and markets branch out. This implies that it might be unfeasible for organizations to guarantee that exploit-based data is not sold to the highest bidder, and subsequently, used to compromise those networks.
The bottom line
NFTs have surfaced as a valuable asset, but with that, they have also emerged as a potential attack vector. Hence, it is time for organizations to take into consideration these tokens in their security strategies. The security threat posed by NFTs cannot be ignored.