Growing in popularity and with the massive growth of online buyers, especially fiery worshipers adored by the artistic field, new forms of art are now being sold in the form of NFT. However, many online purchases metamorphosed into this digital form require a shield to maintain the authenticity of the work in question. NFT holders, here are some reasons why you should take the initiative to cover your digital file with insurance.
What are the principles of an NFT?
An NFT, also called a “non-fungible token” or “non-fungible token”, means a digital file to which it attaches to a digital and non-interchangeable certificate of authenticity. More specifically, it is a cryptographic token stored on a blockchain. The file itself is therefore fungible. Whether it is in the form of a photo, a video or a work of art, it guarantees a title of ownership, secure and infinitely traceable, thanks to blockchain technology.
Attractive technological advantages
Like any digital file, it has various advantages that appeal to many individuals wishing to convert physical merchandise into a digital sale :
- It contributes to greater market efficiency. You streamline supply chains, while reducing the number of intermediaries
- It allows splitting the ownership of real estate
- It guarantees you a much more secure storage of information. As a result, you do not risk hacks, modifications or disappearance, and this using blockchain technology
- It is accessible to all
Disadvantages leading to potential computer dangers
Although this type of digital file offers you multiple advantages, it hides all the same some disadvantages not to be neglected :
- It can put you at a plausible risk of fraud
- Often confused with cryptocurrencies, the non-fungible token is not an asset class, i.e., each NFT has unique properties that set them apart from others
- The production of non-fungible tokens is associated with blockchains, it should therefore be known that this association causes high energy consumption
Why should you insure your NFTs?
Today, opting for the security of this kind of computer file is essential. Since the massive increase in the use of non-fungible tokens, especially in the field of art, it can however face major risks, in particular piracy.
To save your crypto tokens from digital infiltration and hackers, many owners of this type of file may benefit from solutions associated with insurance guaranteeing the protection of your files. It goes without saying that it is quite normal to insure your non-fungible tokens, and this can be seen by their value, which can reach certain capital works.
To find out more about the masterful values of NFTs, especially when these involve online art purchases, we suggest the insurance company Hiscox. This will guide you in depth both in favorable assurances for your non-fungible tokens as well as recent studies regarding NFT buying trends.
In case you opt for the insurance company Hiscox for the security of your so-called NFT digital files, be aware that this company guarantees you computer liability insurance. Although it is not mandatory, it will still be recommended. Any IT risk, regardless of the type of digital file in question, including non-fungible tokens, can potentially face difficulties such as:
- Loss is destruction of data
When you opt for this type of insurance, specially dedicated to the IT sectoryou will be compensated for any dangers or disasters in the course of your digital work.
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Why insure your NFTs?
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