Do You Have Faith In Blockchain?

On January 17^th, Crypto.com admitted 483 of its users had been affected by a hack, by which a third party initiated the unauthorized withdrawal of Bitcoin, ETH, and other currencies with a total value of over $30 million. Although Crypto.com claimed that most of these unauthorized transactions were halted by them, some accounts were affected. The good news is that all customers were fully reimbursed. However, events like this raise the recurring question of security in the crypto space.

Should you trust crypto and the blockchain, and if yes, then how?

Trust Requires Perspective
Like anything of value worth keeping in this world, holding cryptocurrencies and NFTs requires a bit of responsibility on your part (more on this later). This is not to say that blockchain is insecure, but rather to put things into perspective. Not even big banks are 100% digitally impenetrable – consider the Bangladesh Bank Cyber Heist in 2016, in which thirty-five fraudulent instructions were issued by security hackers via the SWIFT network to illegally transfer close to US$1 billion from the Federal Reserve Bank of New York account belonging to Bangladesh Bank.

Understanding Authentication
Before getting into how you can do your due diligence security-wise, you should know about authentication and how it occurs on the blockchain. Despite the original blockchain being designed to operate without a central authority (such as a bank or governing regulator), transactions made on it still need to be authenticated. This is done through cryptographic keys. These are essentially a string of data that identifies users and provides them with access to the account or wallet storing value on that system. They’re like passwords, but much longer and more complex. Bitcoin private keys are a 256-bit number and are often presented more simply as 64 characters in the range 0-9 or A-F. Each user has a public and private key. Public keys are available for everyone to see, but your private key should be kept secret, as it is the key to protecting your assets. Both of these keys create the secure digital identity required to authenticate a user via a digital signature, thus allowing them to complete transactions pertaining to both cryptocurrencies and NFTs.

Furthermore, public blockchains require a consensus to make the decision to add a transaction to the chain. This means that the majority of “nodes” (or computers in the network) must agree that the transaction is valid before it happens.

Blockchain Wallet Due Diligence
If you’re a complete beginner on crypto wallets, refer to this guide before creating one. Rather than inputting 64 characters when accessing a blockchain wallet, a seed phrase is given to the wallet owner. This is a 12-24 word phrase that has your private key encoded within it. Here are some best practices to protect your seed phrase and private keys –

• Never store it on any digital devices.
• Write it on more than one sheet of paper in 2 separate parts and store them in different secure locations. This way, if one part is discovered, they still won’t be able to access your assets.
• Store them on something more durable than paper, like a CryptoTag.
• Never type your seed phrase or private key out.
• Never share your seed phrase or private key with anyone.

What about custodial wallets on crypto exchanges? Well, there are some things you can do there, too –

• Don’t accept when a site asks you to save your password. Instead, write them down and store them offline.
• Enable 2 Factor Authentication on all of your accounts.
• Never share your computer screen through a live feed or through screenshots.

Faith Tribe – Decentralised Assets Backed By Reality
Besides the threat of having NFTs stolen, is also the chance of the value of a token you’ve invested in suddenly plummeting. This is one of the reasons stable coins such as Tether and Circle are so popular, as they retain a constant value of $1 by being backed by physical assets. Parisian luxury apparel brand Faith Connexion has incorporated a similar concept that encourages peace of mind in its platform’s users regarding NFT value. The fashion-focused NFT project, Faith Tribe, is the first fully decentralized and community-owned ecosystem for the collaborative creation of fashion items. Fashion designers and creatives will be able to come together on one network and mint new designs as marketable NFTs. What is remarkable about Faith Tribe is the asset-backed aspect to some of the NFTs that will be available on their platform. Their utility token, $FTRB, will actually be usable in purchasing a clothing item. Once quoted, the price of the clothing will always be honored until sold, so no matter what happens to the value of $FTRB, the same amount of clothing can be purchased for its original price. As this is in the context of fast fashion, and against the backdrop of great margins that can dampen volatility, this is a benefit few utility coins can afford users.

Look Forward To Practicality In The NFT Space
When it comes to the security of cryptocurrencies, both exchange custodians and yourself have a key part to play in the safekeeping of your assets. Also, when it comes to the reliability of NFTs holding value, real-world practicality of NFTs is on the rise, with Faith Tribe being a shining example of this.

In fact, some NFTs on Faith Tribe will be available to purchase as both digital and physical items, so even if you’re still somewhat in doubt about blockchain but really want to try it, owning a Faith Tribe piece in the real world might be a great option for how you could enter the space by grabbing your first blockchain-and-physically-based asset. Another reason to buy physical items of Faith clothing with $FTRB is that once the clothing is replaced with tokens, the tokens will be burnt. The idea is that Faith Tribe will then have a deflationary effect on the supply, meaning that over time, the more fashion created, sold, and retired, the more the supply will go down. The overall concept will benefit the entire ecosystem of holders, which adds an incentive to continuously embrace their fashion.

At least then if it turns out NFTs and crypto are not for you, you’ll still be left with something nice to wear.

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Written in partnership with Sachin Negi