Nonfungible tokens (NFTs) are marketed as blockchain-based technologies, you will find misconceptions about how exactly they’re stored based on two experts. They contended that technically, these tokens don’t appear in the blockchain but they are really stored elsewhere.
Inside a Cointelegraph interview, Jonathan Victor, the Web3 storage lead at Protocol Labs and Alex Salnikov, the co-founding father of Rarible, discussed decentralized storage, the way forward for the NFT space and purchasing NFTs.
Based on Victor, primary chains are extremely limited in dimensions and storing data around the blockchain can be quite costly. Due to the large file sizes of assets, off-chain storage solutions are introduced. He stated that NFT data can live between a located node or decentralized storage systems.
Salnikov also considered in around the subject, stating that since NFTs really are a new idea, there might be lots of misconceptions about how exactly NFT storage works. He stated the transaction is confirmed through the blockchain, however the file is situated elsewhere. He described that:
“It is essential to know the NFT residing in a user’s wallet only suggests the file it represents — the particular file itself, also referred to as an NFT’s metadata, is usually stored elsewhere.”
Regardless of this, professionals noted that storage for NFTs can nonetheless be considered decentralized. Victor described their project NFT.Storage performs this by utilizing decentralized storage systems like Filecoin (FIL) and also the InterPlanetary File System (IPFS). With this particular, they could store NFTs like a public good, like the internet archive. He stated that:
“When we consider decentralization — I love to frame it when it comes to whether there is a anchorman of failure. Simply storing data off-chain does not introduce centralization — as long as we are doing the work attentively.”
Salnikov also shared that within the NFT marketplace Rarible, they stored NFTs using IPFS. However, to help enhance data integrity, the Rarible co-founder stated they integrated with NFT.Storage, which implements both storages on Filecoin and IPFS.
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When requested about the way forward for the NFT space, professionals shared their predictions. Victor believes that you will see more digital goods symbolized by NFTs and much more use cases will appear. Also, he believes the approaching merge on Ethereum (ETH) might help boost NFT prices. However, Salnikov shared their vision from the space is multichain which is why they are attempting to democratize the storage and access of NFTs.
When requested if it is a wise decision to purchase NFTs now, professionals gave a few of their advice. Victor cautioned investors to not put themselves in times where they’d have no choice but sellers. He stated that NFTs are frequently less liquid and advised investors to structure their portfolios in a manner that they aren’t forced right into a fire purchase.
Meanwhile, Salinkov shared stuff that he keeps in your mind like going for a take a step back and searching in the problem. He described that there’ll always be cost volatility on the market, but searching from the broader perspective, the NFT value remains increasing.
