The status of Non-Fungible Tokens (NFTs) exploded from last 12 months, with more investors pouring billions into this new asset class. In fact, in the third quarter of 2021, trading volume in NFTs almost amount to $11 billion.
NFTs differ from cryptocurrencies. A NFT is a block-chain based means of asserting ownership of a unique digital asset, such as art, music, trading cards and collectibles, video game items, domain names, virtual fashion, memes and GIFs, and other online pop culture items. Accordingly, because NFTs are uniquely digitally identifiable by their digital signature, they do not have a one-to-one exchangeability.
The non-fungibility of this new asset class makes it unique from traditional crypto. It is also the reason why more people are investing in NFTs. Consequently, with the surge in popularity of NFTs, many NFT marketplaces have also sprung up.
Because of the current popularity of NFTs and the value of these digital assets, it also became a prime target for hackers, just like traditional crypto. The rise in fraudulent attacks and account takeovers of crypto and other digital financial accounts highlights the importance of robust cybersecurity measures.
Many users utilizing a digital wallet for their crypto exchange or NFT often think that setting up a username and a password, along with an additional layer of security with a one-time SMS password, is enough to keep malicious individuals at bay. However, this cybersecurity practice is highly vulnerable or susceptible to phishing or SIM swap attacks.
As conventional authentication methods are proven to be prone to cyberattacks and do not meet most regulatory bodies’ security requirements, crypto and NFT companies have started investing in FIDO 2.0-compliant authentication solutions. This de-facto authentication standard by the FIDO Alliance ensures that the user’s cryptographic credentials are stored locally within their device; thus, it is not susceptible to fraudulent tactics.