Should you still insure your NFTs in 2023?

An NFT translates intangibles to authenticate a work. These include videos, audio recordings and illustrations. Buying an NFT means that you can store it in your virtual space (the blockchain) with the assurance that it is protected in the world of the Internet. You are thus the sole owner and the only right to use it. These purchases allow artists to earn money through cryptocurrency while developing the new art, 2.0.

The concept of NFT is growing enough to raise the question of whether insurance would be necessary in the event of a problem. However, transactions are secure and the virtual world allows almost no possible mistakes. Everything seems to be perfectly safe.

Insurance of virtual works of art

The emergence of NFTs raises the question of whether they are protected enough in the regulated and coded virtual space to protect them. Indeed, data processing has never been completely infallible, and bad intentions are always possible, even for digital works. The paradox of NFT is that, although the trend is accelerating, it is not yet sufficiently known and developed to achieve foolproof protection. The universe, which is still under construction, can therefore leave its share of risks – but like everything, in the end.

It is thus fully possible to insure one’s works, regardless of whether they are virtual or real. Standard insurance companies already offer to insure works of art on the condition of having a physical safe. If this is the case under NFT, then the insurance in question will also cover the damage to this guy. If you doubt the involvement of non-fungible tokens in your contract, do not hesitate to inquire with your insurance. Thus to have more information on the subject and thus not to fall from the height in case of a problem.

Warning, a virtual safe will certainly be the exception to the rule for this type of insurance that only covers physical goods.

Also, these digital files are not insured by traditional insurance, so you need to turn to specialized contracts. Some companies like it Hiscox offer deals on this item, so find out. It is entirely possible to hedge your virtual goods.

Nothing currently required

In fact, NFTs remain at one domain well protected by blockchains, which are virtual spaces created to protect your acquisitions. Virtual safes are very effective, but it will be a matter of keeping your codes confidential and being careful on all types of websites and networks. Beware of scams, dubious links (phishing links) and change your passwords regularly. Anything can happen and you’re obviously not immune to anything.

To give you an example, OpenSea, one of the largest NFT marketplaces, recently suffered a bug that caused artists to lose several NFTs to sell them at ridiculous prices to strategic buyers. These “Non-Fungible Tokens” were then sold for 99% less than what they were worth initially. If, however, the site is very well protected and adapted to virtual works, it is a fact that the errors in the computer field are numerous.. The online world is constantly expanding and can cause harm to those who blindly trust it.

Of course, insurance to guarantee protection and coverage of damages from NFTs will not do everything. But it is precisely for risks that cannot be mitigated that it can be useful. So if you are a big collector of these images or even a creator in this field, be aware of what may be watching your back. You can thank yourself later.

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