NFTs in 2022: metaverse, mainstream acceptance, and lurking cybercriminals
2021 was undoubtedly a big year for the non-fungible tokens (NFTs). Enthusiasts expect that by the end of 2022, the term ‘NFTs‘ will be as recognizable as the words ‘website’ or ‘social media.’
NFTs caught public attention after American artist Mike Winkelmann (Beeple) sold his artwork for $69 million. It was the first-ever sale by a major auction house (Christie’s) of a piece of art that does not exist in physical form. At the time, Christie’s tweeted that the sale put Beeple in the top three most valuable living artists. The work consists of 5,000 individual images, made one per day over thirteen years.
Many artists are now embracing the opportunity to earn money outside of the well-oiled machine of the art industry. Just look at what is happening in the music world, with niche artists grabbing millions of dollars just by minting their songs.
For artists, NFTs provide an opportunity to sell their digital art and even kick off their careers. $20 billion worth of NFTs lives on Solana and Ethereum, and startups like Bridgesplit are looking for ways to make NFTs liquid - to let you earn a yield on your precious NFT collection without selling it.
NFTs can also be your entry card to communities like The Gutter Cat Gang, whose co-founder Gutter Dan believes that top NFT projects will be the most exclusive clubs in the world in the next five years. Like top country clubs.
According to experts I talked to, in 2022, the NFT market will continue to soar, especially as we start to explore the realms of the metaverse and Web 3.0. Unsurprisingly, threat actors will cloud the enthusiasm around the technology.
‘There’s no stopping this technology’
"In 2021, NFTs made headlines as record-breaking sales of rare collections demanded attention. In 2022, NFTs will move into daily life. We'll see the rise of play-to-earn gaming lead to mainstream adoption of NFTs. By the end of the year, NFTs will be as recognizable as the terms' website' or 'social media' became," Jake Udell, Co-Founder, and CEO of Metalink Labs, told CyberNews. Metalink is a gated platform that will ultimately enable verified owners of NFT collections, like CryptoPunks or The Bored Ape Yacht Club to chat, view each other's collections, and trade NFTs.
According to him, the investment and attention offered to the space by big tech companies indicate that this technology is here to stay. Facebook changed its name to Meta, Nike bought a metaverse company. Therefore, it's clear that 'these big brands see their future as inextricably linked to NFTs.'
"There is no stopping this technology. The various applications beyond what we have now are too powerful and beyond what any of us can imagine today. For example, I imagine we'll be able to create completely customizable NFTs, the same way a website is today," he said.
We are already witnessing considerable movement towards mainstream acceptance of cryptocurrencies and NFTs. For example, El Salvador embraced Bitcoin as its national currency, and VISA launched a crypto advisory service for financial institutions. As for NFTs, Meta's competitors, such as the Sandbox, are building decentralized metaverses on the blockchain in a quest “to disrupt Big Tech companies by moving away from the Web 2.0 era,” where companies collect and monetize user data. With Web 3.0, everyone will own a part of the internet while preserving their privacy.
"Like any market, there will be ebbs and flows. However, the large investments of big brands in developing the space, as well as the increasing acceptance of NFTs as a form of diversifying a portfolio, indicates the inevitable movement towards mainstream market acceptance and adoption. Nothing can slow it down for the long-term," Udell said.
Speculative bubble?
We're well over the hump of understanding cryptocurrency's usefulness and placing it, Stel Valavanis, CEO of Chicago-based onShore security, thinks.
"Anywhere you need trust or a written record without a central authority, blockchain is your answer. We'll see it more with contract negotiations, fast financial transactions, data collection that needs to be kept independent such as for tracking climate data or damages to a population," he said.
Valavanis explained that cryptocurrencies don't need to use blockchain-type systems, but they choose to do so to eliminate central authority. NFTs, he added, become interesting in this context.
"There isn't quite the demand for removing authority, but I'd say that's now part of the culture in which NFTs flourish. Anonymity, which is only partially satisfied by blockchain, isn't so much of an issue with NFTs either, and that's been satisfied in the past with proxy buyers and other methods. I do see NFTs further developing for new types of property. Blockchain adds nothing to that, but it did create the foundation for the unique identifiers that opened the eyes of so many. Some of it is probably going to pop as a speculative bubble, but lots of properties do represent uniqueness and have value," Valavanis said.
Malicious hackers will follow
"Someone stole my NFTs today on @niftygateway and purchased $10K++ worth of today's drop without my knowledge. NFTs were then transferred to another account," Twitter user michaelmiraflor.eth tweeted in March.
Here's another tweet from an artist K' @ Wildewood's Den (21 December 2021): "Hey @opensea, someone stole my artwork and is selling it as an NFT on your website. What's a good way to report this? I see no easy way to report stolen intellectual property on your site…"
Most likely, we will see much more of these complaints in 2022.
Threat actors will not miss an opportunity to take their share of the booming NFT market. We've already witnessed some attempts to steal NFT assets. In October, Check Point Research (CPR) spotted various cases where people tweeted reports claiming they lost their crypto wallet balance while receiving a free gift on the OpenSea, the largest digital marketplace for collectibles and NFTs. Moreover, several reports surfaced claiming digital wallets of merchants disappeared, leaving collectors to lose hundreds of thousands of dollars worth of NFTs.
Malicious actors will not leave NFTs alone in 2022, that's for sure.
Matthew Grace-McMinn, Head of Threat Research at Netacea, expects to see bot attackers trying to further diversify their attack vectors over the coming year to maximize their profits.
"As bots become an increasingly advanced and popular form of attack, we expect to see them exploiting business logic vulnerabilities in other industry verticals that may not have seen extensive bot attacks in the past. We have found more and more bot developers offering their skills to those who want to profit from NFTs. Like those that frequent eBay, Sniper bots are being developed and employed to rapidly purchase and resell NFTs," he told CyberNews.
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