There is this widespread mind set that blockchain is immortal and by extension NFTs are too, but regarding NFTs, this statement is not entirely true. Although the token itself will live eternally on the blockchain, its underlying asset, is often hosted on Web2 technology.
There is this widespread mind set that blockchain is immortal and by extension NFTs are too, but regarding NFTs, this statement is not entirely true. Although the token itself will live eternally on the blockchain, its underlying asset, image etc, is often hosted on Web2 technology.
To guarantee the immutability that is so dear to NFTs, some projects are using “100% on-chain” NFTs. What does this mean and is this the future standard of the NFT industry?
As we have seen since the beginning of the creation of crypto, one of the biggest barriers to the adoption of Web3 technology is understanding how this technology actually works. Trying to explain simply what a hash function is, why a double transaction is problematic or how the Bitcoin money creation system is a revolution is a feat that only a few manage to accomplish.
Yet, in our age where digital creation is abundant, having a technology that offers digital scarcity has become indispensable. Whole sections of our lives are now digitized which has had an impact on our real lives. Concert ticket, payment application, parcel delivery tracking, newspapers, tax declaration, health data, digital art…and soon identity and even diplomas.
Today, it’s extremely easy to duplicate content on the internet, and in fact, extremely difficult to authenticate in a 100% secure way where the information originated from. Digital scarcity has become more and more important as our real lives continue to build a duplicate online.
Blockchain. The promise of data living forever on the internet, without the possibility of going back. Every action is decisive, definitive, eternal. From now on, it is possible to quantify the digital unquantifiably, do you have any doubts? The information is verifiable by anyone, everything is public and transparent. Well, everything? Not quite.
For this prerequisite to be respected, the blockchain used must be public and sufficiently decentralized. But this brings a problem, that of scalability. Because of the slowness and low number of transactions supported by public blockchains like Bitcoin or Ethereum, the number of users is limited.
A balance between centralization and decentralization has been gradually adopted until, bringing the missing piece of the puzzle to the crypto ecosystem, NFTs arrived!
These tokens perfectly respond to the problem of infinite digital duplication. But NFTs are a bit peculiar because blockchain is not made to host large files. To be able to display a photo, image, video, or other type of media, a link is contained in the metadata. Depending on the project, the media is therefore hosted on a centralized server or via the IPFS system.
In either case, this ensures a certain longevity to the media but in the end, not eternal. The next step would be to use another blockchain to host the media. Or even better: NFTs should host the media themselves.
To honor the promise of having, for example, an artwork living forever on the blockchain, the solution is to have all the data hosted in the NFT. The most famous projects which have chosen this method to host their media are Avastars and Cyberbrokers. They succeeded because the images are not in .jpeg or .png format but in vector format.
But it’s not just the images that are important, so is all the other metadata. The number of editions, properties, description, characteristics, asset IDs… everything must be hosted on-chain.
Why is this important? Because if ever, for one reason or another, the teams were to abandon their project, NFTs and their metadata will still exist on the blockchain. This allows for example anyone to take the code to “recreate” the smart contract and therefore, revive the project at any time. It also allows anyone to use the information contained in the smart contract without having to depend on a third-party service or API.
Because one of the intrinsic crypto values is also that, not to depend on a trusted third party. Yes, the more data there is, the more expensive it will be for everything to be hosted on the blockchain. For Chainbreakers, the switch to 100% on-chain format will have cost them 90 ETH. But this allows these NFTs to live forever and be used by any other NFT project using the same standard.
If the importance of the project is worth it, having NFTs hosted entirely on the blockchain should be the norm.
But then the question arises, are all the NFT projects actually worth it?
Opinions · Intermediate · 5 min
We're committed to providing comprehensive coverage of the NFT market. As such, we had to address Matthew Ball's highly anticipated volume, "The Metaverse: And How It Will Revolutionize Everything."
Written by knack · 09/13/22