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Will the NFT you bought suddenly disappear one day?

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How do you check whether a certain way of storing NFT content is reliable?

It "s an NFT Boom. Do You Know Where Your Digital Art Lives?

Originally written by Brady Dale

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-NFT is a way to prove ownership of digital art and collections.

- A cool image or video owned by an NFT owner is not actually stored on the blockchain. Instead, they point to a file stored elsewhere on the network.

- If files are stored at traditional network addresses, NFT holders are at risk of files being lost and corrupted.

- A solution to this problem has emerged in the NFT space, but there is no consensus on the most appropriate approach, making it difficult for buyers to evaluate which NFTs can be safely stored for the long term.

Clearly, millions of people have realized the tremendous potential of NFT.

Just recently, a Rainbow Cats sold for nearly $600,000, a Hashmask sold for $650,000, super-rare CryptoPunks went for a top $1.5 million and a virtual land in the game Axie Infinity sold for 888ETH.

But amid the frenzy, buyers should also consider a crucial question: what happens to their NFTs when the companies that created them go out of business and the artists leave the field?

But it may be premature for a rapidly growing industry to discuss the issue. NFT trading platform OpenSea, for example, grew from $1 million in August 2020 to $8 million in January 2021, and even to $90 million in February.

NFT is a completely "unique" token on the blockchain that, unlike other tokens, can be interchangeable at will. There's no difference between one of your Bitcoins and one of mine, but each CryptoKitties NFT is a completely different cat.

As this unique token catches more people's attention, it's extremely important that more and more people start thinking deeply about how safe their assets really are and whether they'll be around forever.

Buyers of art or collectibles are more interested in whether the asset lasts forever than buyers of in-game items (such as weapons or virtual land). Moreover, NFT can do a lot more than track content ownership. NFT can turn invoices into collateral for loans or smart contract insurance.

But right now, the most widespread use case is attaching something cool to a token, like a picture or a GIF, or sometimes an audio, video or even text, like the Moment in the recently popular NBA Top Shot on the Flow chain.

So when users buy that cool digital asset, whether it's a basketball collection or a beautiful piece of art, do they know where it's actually hosted? Can it be proved that they can exist in the world forever?

"When you talk to them about blockchain technology and decentralization, consumers don't pay much attention. But when you talk to them about a LeBron James star card, they understand the importance of secure storage." "Said David Pakman, a partner at venture firm Venrock.

After all, if a buyer is paying a large sum of money for an NFT, of course they need to think carefully about the storage of the blockchain.

How is NFT stored?

In the simplest case, the NFT is stored on the Ethereum network as a record (a file with a hash), and the related content it points to (images, etc.) is stored elsewhere in the network (there is a hefty fee for storing images on Ethereum).

"You can look at the contract and query the TokenURI in the contract," OpenSea member Finzer said.

The people who developed the ERC-721 standard explicitly decided not to think too much about where creators put their data and how reliable the storage site was.

The people who developed the ERC-721 standard explicitly decided not to weigh in on where creators put their data and the reliability of the storage site. "Who is the authority, who owns what, and can we prove that?" "It's a bit out of the norm," says William Endriken.

Entriken, a proponent of open-source code, entered the crypto space in 2018 and led the rollout of the ERC-721 standard, which enabled NFT to be born on the Ethereum network.

In short, NFT will tell you where the content was stored when the coin was minted. This standard does not mandate that the data be stored forever. This is something the field needs to work out on its own.

There are more ways to "place" content than there were when the ERC-721 standard was first introduced, and there are sure to be more in the future. The new web will allow the "what is the content" rather than the "where is the content" of the old web, and NFT is an example of this, and it shows its advantages.

Let's make a brief explanation of this problem. On the Internet as we know it, an address refers to a location. On this page there is a specific website and certain files where some of the data is stored. On the Internet, you may see pictures of Rainbow Cat on millions of Web pages, but traditional HTTPS addresses (like the ones that appear at the top of your browser today) can only point to a single online file.

But now we also have content addressing capabilities pioneered by the InterPlanetary File System (IPFS). Content addressing becomes a hash of the content itself, and when no one has done damage to the file, the user can look at the content and find the nearest copy.

That is, if there are 1000 identical copies of Rainbow Cat stored on 1000 different servers around the world, even if 999 of them are destroyed, IPFS will still be able to find the last one left, and the hash of the content will tell you that this is really what you are looking for.

This is why content addressing is particularly important to NFT holders.

Reputation matters

Pakman invested heavily in NFT long before the current NFT boom began. He says that most buyers today don't think about whether their NFT really lasts forever, and that's an important point.

"At the moment, some of the data associated with a decentralized experience is not stored in a decentralized way," Pakman acknowledged, but added that the extent to which buyers are concerned about decentralized storage often depends on how large an NFT issuer is.

For example, Dapper Labs, the company behind the NBA's Top Shot, put the user experience ahead of decentralization from the beginning. But because it is a big, well-funded company, users trust it more.

But with the exception of NBA-licensed star cards, many of the works are created by independent artists, which is a good thing: Creators can finally earn the money they deserve online.

"When we talk about owning a piece of digital art of our own, we want to feel the honor of being the person who supported the artist," Endriken said.

That said, if you've bought NFT from one of the many avant-garde digital artists on sites like SuperRare, Foundation, or Slot, it's worth doing due diligence on how that content is stored on the web.

If an artist gets hit by a bus and their website crashes, can you really prove that the hash in your Ethereum wallet corresponds to a wonderful piece of art?

Self-hosting for NFT

Pinata, a company built on IPFS and Filecoin, is particularly good at storage.

The project argues that when an art buyer buys a painting, the buyer takes on the responsibility of caring for and keeping the painting because it is no longer in the hands of the artist. So, Pinata argues, why should we expect digital content creators to always manage ownership of NFT?

Pinata's solution is that each owner of the NFT stores a copy of the NFT in IPFS, so that even if the creator delets his files, the owner of the NFT still owns a copy of the NFT and can hash to verify that these copies are the same item.

Let's pause here, because Web3 is a little different. To reiterate: Copies can be one, or a thousand, or a million, but NFT is like a contract. No matter how many copies anyone makes, only one record can be given ownership, and it will be kept in only one wallet. No matter how many people have copies, there is only one owner of the NFT.

And, as artist Sarah Friend mentioned in the "Byzantine Dream" podcast, he thinks a digital work of art may become more valuable because the more people decide to own copies.

Without further ado, let's go back to the permanent storage scenario. There is another way in which the creator can at least try to host the content in a permanent storage format. Using Arweave as a storage method is a novel approach, but only if the Arweave network exists forever, so that creators can pay once and store a file.

"Artists can mint their tokens through an integrated platform like Mintbase, or they can upload them using Ardrive (or a similar network drive) and place the Arweave URL into the casting application of their choice," said Sam Williams, CEO of Arweave.

We don't have a way to store things "forever" yet, and even storing them for a long time is a difficult problem, so Arweave is a way to try. "I remember hearing about very big developments in Arweave, but IPFS is a pioneer," OpenSea's Finzer said.

In any case, Pakman thinks it's a good thing to bring up another issue that might make some savvy buyers nervous. Will the people who created NFTs devalue them by trying to take away the rights of content owners?

Take the NBA Top Shot for example. Every time a Moment is cast as NFT, the NBA can't take the copyright from it. " "You have an IP address embedded in it," says Pakman.

It's like a baseball card. For example, even when Major League Baseball has a dispute with Topps Cards, it's impossible to take back physical baseball cards that people have already bought. Similarly, NBA can not take back the Moment that has been cast into NFT.

Is it really reliable?

So, if an NFT buyer notices a persistent retention issue, how do you check that the content is stored reliably?

If the previously mentioned TokenURI is an HTTPS address, it becomes a bit of a hassle.

To self-host, the creator basically has to hand over the server to a new owner. Of course, the new owner can download a copy, but if an NFT starts to become valuable (which is likely), you run into the very tricky issue of NFT authorship.

But that problem, too, is slowly being solved. "So far, we have seen a shift from centralized servers holding NFT media to decentralized storage networks such as IPFS, Arweave, SIA and Storj," said Jake Brukhman of CoinFund.

For the entire NFT field, it makes sense to integrate a "lasting seal," like USDA certified organic or UL certification, that can be used quickly and quickly, and that NFT can last forever, even after the creator has left.

But in the marketplace we don't always know where an item is being stored, and the platforms don't always actively tell others how to determine whether a storage method is reliable.

"If the industry decides to stick to some kind of standard, it's not difficult for us to supplement the reliability judgment." Finzer said.

Alexander Salnikov, co-founder of another trading platform, Rarible, said they are trying to find a way to keep NFT alive forever, but haven't completely locked in a solution yet.

"We hope that Rarible will successfully work with systems like Arweave and Filecoin until it is fully decentralized." Alexander Salnikov said.

"This is definitely a long-term problem that the ecosystem has to deal with," said Elpizo Choi, a developer of the Foundation platform. Foundation has a nice feature that when a work is stored on IPFS, it can be easily verified through the Foundation page.

Kyle Tut, who works for Pinata, a firm used by the Foundation, said: "There still needs to be a standard for NFT owners to ensure the existence of NFT data, which can be decided by the platform, the creator or the collector."

"It is still early days, but I hope we can reach a consensus on consistency and scalability soon." Choi said.