What do you really get when you purchase a NFT?
You own a one of a kind token on a blockchain that references some off-chain information. The token is non-fungible (extraordinary) and permanent (being on a blockchain). That is all that a NFT ensures: You own an extraordinary and unchangeable reference to certain information.
Zeroing in on this center NFT definition, two primary difficulties emerge.
Initial, a NFT is just comparable to the connection to its information. This reference is only a line of code, however for a NFT to have esteem others need to concur it alludes to significant information.
Second, the off-fasten information itself needs to exist, it must be put away some place and it must be available. There are many examples where NFT joins return 404 blunders later on – making those NFTs useless.
InterPlanetary File System (IPFS) and Filecoin, open-source conventions initially made by my manager, Protocol Labs, give expected arrangements. In any case, seeing how to accurately use these arrangements regularly stumbles clients by and by. There are subtleties that should be represented while utilizing them straightforwardly or building administrations on top of them.
We work for Protocol Labs on an item called NFT.Storage and invest a great deal of energy pondering how to ensure NFTs are pretty much as helpful as could really be expected. It’s still early days in the business, and the NFT space truly is the Wild West at the present time. We need to assist with instructing individuals on what NFTs are, the difficulties of NFTs, the advancements that exist to address these difficulties and how we can drive culture around NFTs to exploit these advances.
A new CoinDesk opinion piece proposed that IPFS is definitely not a “long-lasting” answer for NFTs. This is a misrepresentation of what IPFS is. For NFTs to turn out to be really “permanent” computerized records, the local area should foster better practices around connecting to information, and its hidden stockpiling – of which IPFS and Filecoin can be a critical part.
The illusion of permanence
Filecoin’s critics point to the challenges of decentralized storage to say that “NFTs are no more permanent than any other part of the web.” But this oversimplifies the project, by insisting data be “permanent.” Of course, nothing is truly “permanent”; every system comes with its own set of tail risks and disclaimers. If we truly want to protect against even the 0.01% chance that any single system fails, we want to take a more comprehensive, layered approach.
Any solution to off-chain data storage will be multifaceted and should be engineered to be swappable. This might look like marketplaces, artists and collectors all storing data in many places, where the responsibility for storage and accessibility extends beyond a single protocol. As our colleague Mikeal Rogers said, “Put your data in as many providers as it takes for you to feel confident you have permanence.”
And Filecoin is one of these storage options but is often misunderstood. Filecoin’s primary benefit is trustlessly guaranteeing that someone out there is actually storing the data they say they are for an agreed upon amount of time (what Filecoin users call a “deal”). The system is designed to be inexpensive and scalable ($0.01/TiB/year, 15EiB+ capacity).
But this doesn’t prevent it from being able to offer guaranteed storage beyond the duration of a single deal. New developments like the Filecoin Virtual Machine enable automatic deal renewal and repair, creating a powerful foundation for multi-generational storage.
Improving education and changing the culture
It’s important to be honest about NFTs’ limitations. Because NFTs are not the underlying data they represent, it’s important to understand their nuances. Thankfully, there are solutions like IPFS and Filecoin today to solve their shortcomings.
However, we must shift the conversation away from guarantees of “permanence” and towards a better understanding of persistence and resilience. No storage system can truly guarantee permanence, but content addressing allows for anyone who cares about an NFT to store it themselves in their preferred systems.
What can the community do to help the NFT space mature when it comes to storage? A few ideas:
- Wallet providers should make it easy for their users to store their NFT data locally and pin it to IPFS to make it easy for them to take ownership of their NFTs
- More decentralized storage networks should use IPFS CIDs as the primitive for their URIs – CIDs are designed to be universal, interoperable and backward-compatible – read here to learn more
- Have more conversations about NFT storage! Talking about it forces services, tooling providers and storage services to interoperate and solve the problem communally