Cryptocurrencies offer great benefits for consumers and businesses, but they also come with challenges. One major challenge is the newfangled technology called “NFT phygital authentication”, which poses a fundamental threat to the security of digital assets. If left unaddressed, it will soon become nearly impossible to sell goods on e-commerce platforms or accept payments using virtual currencies. As more and more users are getting comfortable using cryptos as payment mechanisms, retailers are starting to take note. This puts pressure on organizations to improve the security of their networks and reduce the risk of consumer fraud. Fortunately, there are several easy ways you can help combat this growing problem in your own community.
What is NFT Phygital Authentication?
Phygital authentication is the process by which a user can prove ownership of a digital asset. It’s similar to how you can prove you own a piece of property with a notarized deed. In the case of phygital authentication, you can prove that you own X amount of Y crypto asset. To accomplish this, phygital authentication providers such as Veridiez scan the blockchain and compare the signature of the user on a blockchain transaction with the signature on a digital asset transaction. If the two signatures match up, the user owns the asset. This type of verification is crucial for both consumers and businesses that use cryptocurrencies. NFT phygital authentication helps retailers combat fraud and ensures consumers can trust in the brands they shop with. This technology can also help solve the problem of private equity. For example, if a business has a piece of property that it needs to transfer to ownership, but the current ownership records are not publicly available. Phygital authentication can help solve this problem.
How Does NFT Phygital Authentication Work?
To start the verification process, users have to create an account with the phygital authentication service. The service accesses the public blockchain and pulls the transaction history of the asset. Next, it compares the public transaction history with the private transaction history on the blockchain to establish the authenticity of the asset. Based on the result, the user receives a verification code that can be used to send or receive assets on the blockchain. As far as security is concerned, the verification process is similar to a lock and key scenario. Before the lock is opened, both the public and the private keys have to be present in the lock. If both keys are present, the lock opens and the asset is revealed. With phygital authentication, the private key is safe inside the lock and both the public and the private keys are on the blockchain. If someone attempts to open the lock and falsify the public key, the private key will reveal the asset. This way, the integrity of the verification is guaranteed.
5 Steps to Improve NFT (Nft) Phygital Authentication
1. Get the Most out of Your Blockchain Network – One of the main reasons phygital authentication poses a threat to the security of cryptocurrencies is because of the technology behind it. With phygital authentication, the data required to verify ownership is stored on the blockchain, making it more susceptible to hacking. To solve this problem, you should implement blockchain technologies that allow the data to be stored off the blockchain.
2. Use Hardware Security Keys to Lock Your Assets – Another phygital authentication security flaw is the unsecured storage of the private keys. With a hardware security key, you can lock the keys inside the key and make it nearly impossible for hackers to access the keys. A hardware security key is a physical device that generates and stores the cryptographic keys. The keys are encrypted and secured inside the device, making it virtually impossible for hackers to access them. You can use a hardware security key to secure your assets both on the blockchain and on your computer.
3. Don’t Use a Single Blockchain – As a business owner, you are well-aware of the security risks posed by a single point of failure. Similarly, you should approach the security of phygital authentication the same way. If a single blockchain is used to verify the authenticity of an asset, the problem of phygital authentication can be solved by adding more security to the network.
6 Ways to Improve Crypto Security for Businesses
While it’s safe to say that phygital authentication is a good thing, it also poses a threat to the security of cryptocurrencies. Fortunately, this problem can be solved by implementing the right security measures. Here are a few ways you can do just that. – Use Multi-Factor Authentication – Phygital authentication uses public-key cryptography to verify the signature of the user on the blockchain. To prevent hackers from falsifying user signatures, phygital authentication providers require two factors to be present for a signature to be verified — the user’s private key and their device, usually a hardware security key. To verify ownership of digital assets, phygital authentication providers require the user’s public key from a digital key management system. – Use Separate Blockchains for Different Users – To secure phygital authentication, you should use different blockchains for different users. If a single blockchain is used for phygital authentication and other transactions, the protection provided by the blockchain is diminished. – Use Two-Factor Authentication – Once a user’s identity has been verified, you should also implement two-factor authentication. This allows you to secure user data and phygital authentication data on the same system. If you don’t have two-factor authentication, phygital authentication service providers can easily access the data and falsify it.
What Happens if We Don’t Adapt?
Phygital authentication is a game-changer in the world of digital assets, but it can only be implemented on a blockchain that uses it. If a blockchain doesn’t support phygital authentication, the technology cannot be used. At the moment, that means only a handful of cryptocurrencies. If phygital authentication is not implemented on a blockchain, it simply can’t be implemented. Given the importance of this new technology, it is likely that phygital authentication will become a standard feature on the majority of blockchains in the near future. If phygital authentication becomes the new standard for digital asset authentication, the security of digital assets will be greatly improved. Unfortunately, this comes with a downside. Phygital authentication is only as secure as the blockchain it’s implemented on. If a blockchain is vulnerable, phygital authentication is also vulnerable.
As more people begin to use virtual currencies, the risk of fraud increases. These new phygital authentication technologies can help combat this threat, but they also present a new challenge. If phygital authentication is not implemented on a blockchain, it simply can’t be implemented. Given the importance of this new technology, it is likely that phygital authentication will become a standard feature on the majority of blockchains in the near future. If phygital authentication becomes the new standard for digital asset authentication, the security of digital assets will be greatly improved. Unfortunately, this comes with a downside. Phygital authentication is only as secure as the blockchain it’s implemented on. If a blockchain is vulnerable, phygital authentication is also vulnerable.