How to Safely Store NFTs

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There’s a respected adage in the cryptocurrency community — not your keys, not your coins — and this also equally applies to non-fungible tokens. This proverb tries to convey the idea that if you do not control the access mechanism to your digital assets, in this case, the private keys that give the holder access to their holdings, then you do not really own them, as they are not in your control. This doesn’t solely apply to cryptocurrency either, as we’ve seen citizens from countries all around the world line up at their local banks to take out their money only to be rejected and have no access to their hard-earned savings.

With the very real possibilities of manipulation, hacking, or general misconduct that can put your assets at risk, you must have a proper storage plan and method for your NFTs. This becomes more important as you deal with more valuable NFTs, but everything is relative; you do not want to lose or have an NFT stolen regardless if it’s worth $100 or $1,000,000.

 

Safety Versus Accessibility

We’ve all heard the horror stories of cryptocurrency owners that lose access to their wallets, making their precious cryptocurrency holdings unavailable, or having everything stolen from them, so how can we keep our assets secure without taking on a high potential risk of loss? This requires a systematic plan and fail-proof backups, as preparation is always the best way to establish a proper safety protocol.

The first option for NFT storage is on an application ‘hot wallet’, a cryptocurrency wallet where the private keys are either held by another party or readily available to interact with online. These are the most accessible wallets to interact with, but come with the weakest levels of security. Many NFT platforms offer built-in hot wallets, but make sure you are comfortable with the application before storing your assets there long term.

For example, if you hold Binance Smart Chain-based NFTs, you can keep them on Binance’s built-in native wallet. This makes your NFT highly accessible, but more prone to loss or damage if BSC is hacked or overtaken. For novice NFT users, hot wallets can be a viable option, as they generally require a lot less technical knowledge to interact with while still providing a base level of safety. Once you get a little more experienced, or if you are already deeply involved in the cryptocurrency space, you can move towards hardware and cold storage options.

 

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A visualization of hot wallet versus cold wallet features (phemex.com)

 

The Power of Controlling Your Private Keys

Cold storage wallets are cryptocurrency wallets where the private key is entirely offline, making it much, much harder for anyone to gain access to your holdings. Cold storage wallets generally fall into two categories, hardware wallets and paper wallets, with both representing strong options for storing cryptocurrencies.

Hardware wallets like Ledger and Trezor are top-rated storage options that millions of people use to safely store their cryptographic assets. These highly encrypted physical devices store the users’ private keys offline and make them largely inaccessible to anyone besides the owner, adding additional security layers. With a hardware wallet, you can send a NFT to your wallet address and access it without releasing your private keys to the internet, a very powerful and safe tool.

 

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The Ledger Nano X hardware wallet (ledger.com)

 

If you really want to stay off the grid, you can make your own paper wallet, or a wallet address with absolutely no digital traces to your private key. This wallet can be created on an online or offline computer, allowing the users to write down or store their private keys on a piece of paper, metal, wood, or any other medium as the ultimate form of protection. You can even store your private keys solely in your memory, leaving no physical traces for anyone. Be careful, however. If you lose your private keys or forget them, the assets you store within the wallet will be forever inaccessible.

Many who use paper wallets will have them engraved in metal so the lettering cannot smudge or distort, then storing them in a safe or bank safety deposit box for ultimate safekeeping. This option provides the maximum level of safety, but also a minimal level of accessibility.

 

Hybrids

If you want more accessibility than a cold storage wallet and more safety than an in-house application wallet, there are hybrid wallets like MetaMask that offer a good alternative. Although not the physical wallet itself, just an interactable representation, MetaMask allows users to have complete control over their private keys on an active browser wallet. The more safety precautions you take, the better, but as long as your computer isn’t compromised and you do not reveal your browser wallet private keys, you will have a highly accessible wallet with robust security features.

 

Which Option to Choose

There is no definitive correct answer on which wallet to store your NFTs, as it heavily relies on your preferences and how you plan to interact with your NFTs in the near and long-term future. If you want to mint and sell your NFTs, a hot wallet may make sense for you until the completion of the sale. If you want to keep your NFTs safely tucked away with no interactions from the outside world, then immediately starting with a cold storage wallet may be the optimal choice. Remember that each option has its pros and cons, but at the end of the day, if you do not fully control and protect your private keys, your NFTs could potentially be at risk.

 

This guide has been brought to you by NFTrade, the first cross-chain and blockchain-agnostic NFT platform. NFTrade hosts the complete NFT lifecycle, allowing anyone to seamlessly create, buy, sell, trade, and leverage their NFTs across different blockchains. Using NFTrade, anyone can gain access to the entirety of their NFT, unlocking the full value of the NFT market.



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