Since crypto storage is still a big problem, can NFT integration solve the problem?

Now a trillion-dollar market, the crypto ecosystem has withered some of the toughest conditions in its existence. However, like any technological innovation, it is not without its inherent challenges. This “lucrative” market faces a myriad of shortcomings, including criticism from regulators and long-standing financial institutions. But the main obstacles are currently attributed to the underlying infrastructure.

In a recent interview during Paris Blockchain Week, Binance CEO Changpeng Zhao identified crypto custody as one of the most difficult challenges that remain unsolved. According to CZ, the inaccessible and complex nature of crypto wallets undoubtedly hinders mass adoption in the digital asset space. He was also keen to emphasize that this was one of the problems he would prioritize given an opportunity,

“If I had no financial pressure, I would want to solve the hardest problem blocking adoption. That would be the problem I would try to solve.”

The loophole in crypto storage

Anyone who has interacted with crypto long enough understands that there is a fine line when it comes to storing your newfound wealth. Stakeholders have previously lost huge sums of money as a result of wallet breaches or forgetting one’s seed phrase. As it stands, 20% of the BTC available is unreachable due to lost private keys.

Is this effective for an ecosystem designated as the future of finance? Even if Rome wasn’t built in a day, the problem of crypto wallets needs to be solved sooner rather than later. Some crypto diehards will argue that non-custodial wallets are a long-term solution. However, the complexities involved in securing one’s seeding paint a different picture.

“But today, most people can’t store their private keys securely. The wallets require them to be technical. Your computer can’t get a virus. If your computer gets a virus, all kinds of problems will happen. You’ll lose your money. ” added CZ Binance.

Even worse, the current infrastructure of most non-custodial wallets has no solution for transferring inheritance to future generations. It is quite unfair to invest in an industry where there is no guarantee that one’s offspring will benefit if they die. This is, after all, standard practice in the traditional financial sector.

Unfortunately, escrow wallets offered by crypto exchanges are no better; Although they may have an inheritance structure, users do not have control over their private keys. In the event of a breach such as the infamous Mt Gox hack, chances are that any investor holding funds with the affected exchange will have to incur significant losses.

So, what is the ultimate solution for a secure crypto storage ecosystem? The perfect answer would be that it is neither black nor white, but the rise of non-fungible tokens (NFTs) seems to pave the way for tamper-proof and legacy-designed Web 3.0 wallets.

NFTs; The Future of Crypto Wallet Infrastructures

The NFT hype has taken the crypto industry by storm, with digital advertisers like Beeple making a lot of money from their work. Although a relatively new area of ​​innovation, the inseparable (unique) nature of NFTs could be a game-changer in the development of non-custodial crypto wallets.

Emerging DApps such as Serenity Shield are implementing NFT technology to introduce a strongbox solution that addresses seed recovery and inheritance issues. Launched in 2021, this Web 3.0 project has a fully encrypted solution for storing digital assets. Ideally, Serenity shield allows crypto natives to create an account where they can safely store their seed recovery phrases.

Serenity’s power box then splits the sensitive information into three unique NFT keys. The first NFT is assigned to the account owner, the second to a potential heir while the last key is stored in the Serenity Shield smart contract. Unlocking the information in the strongbox requires at least two of the NFT keys, enabling a user to recover sensitive information or transfer ownership to an heir.

By following the trends in NFT integrations, the value extends beyond play-to-earn and the metaverse economies. There are a wide range of crypto applications that can benefit from scaling through NFT infrastructure. Most notably, this upcoming crypto niche provides a building base for secure DApps, ultimately solving relevant issues such as seed recovery and digital asset inheritance.

Conclusion

Cryptocurrencies may have come of age, but there is a lot that needs to be done to ensure that investors sleep comfortably knowing that their assets are safe. As highlighted in the introduction, it is still a murky world for crypto wallets, whether they are custodial or not. This is not to say that existing problems cannot be solved; newer technologies such as NFTs provide an opportunity to tackle a majority of the underlying issues.