Your NFTs Are Yours, For Now: The problem with NFTs.
The NFT hype has seen incredible support in recent years capturing the interest of millions of people. The idea of holding on to unique digital tokens appealed to the crypto community, showcasing a new concept of ownership while providing a platform for digital artists to get discovered and explore the technology. Regardless of how good the intention is behind this idea, as it stands today, the technology is designed upon a flawed system. Let’s discuss what is wrong with NFTs and why we should be finding alternatives to its flawed logic.
NFT means Non Fungible Token (NFTs), it is a token representing unique assets stored on the blockchain. These are usually digital artworks or NFT collectibles so they can sell for a hefty price, with one collection selling for upwards of 69 million dollars. Unlike physical assets, however, you can’t trade one for another. The sale has to be conducted with crypto on the other end. One of the primary reasons behind the technology’s boom in popularity is owed to the fact that they provide irrefutable hard proof of digital asset ownership, which sparked community interest in what ownership really is.
What makes this idea unique is NFT ownership, as it provides people with the ability to own digital assets. Not in the sense of having them stored on your computer, but actually being labeled as the artwork’s sole owner. Non fungible tokens consist of a few components, the image, metadata, and ownership record. This proves that you are the actual owner of the asset and grants you ownership and advantages — provided that the collection was designed to provide the owner with perks — allowing you to enjoy your digital art.
They’re also popular trading assets on marketplaces, which is why they have an additional feature. The original creator of the digital asset can set it so that they always get a specific percentage of every sale. This creates a basis for artists to gain from any third-party sale of their original artwork.
This is all great stuff, right? Well, there’s a caveat. While the blockchain is permanent, your NFTs aren’t.
Let’s take a look at how NFTs are currently designed.
When you buy one, it will generally have 3 components:
- Metadata: This is information regarding its attributes and characteristics
- Ownership record: This will confirm that you are the real owner of the asset
- The image file: This is the artwork that you see. You purchased the NFT because you liked how it looks, it’s basically the face of the asset.
Despite their increasing popularity as well as utility potential, there’s always another side to the story. With its growing support, comes a growing concern about their true longevity
The common NFT criticism states that they were created in order to decentralize art and provide a permanent solution for both artists and art lovers. While the blockchain is a permanent space, NFTs storage doesn’t happen on the blockchain, well, at least not the entirety of your digital asset.
Your valuable piece’s Metadata and ownership are stored on the blockchain, while the actual NFT itself is stored on centralized file-hosting services. This means that it is technically possible for your image to be altered, or even deleted, leaving you with just data & no image.
A lot of enthusiasts and holders love to show off their ownership of rare NFT artworks, as Twitter and many more social networks have allowed users to set their authenticated NFT as a profile avatar. This isn’t just an aesthetic thing either, as these can be extremely valuable assets! Especially when some have sold for over 500K USD, so showing them off sounds appealing to their holders, almost like a trophy. That is why losing the image means losing the NFT.
Let’s visualize the house of cards collapse
So let’s say you purchased a rare NFT for 10,000 USD. You bought it because you loved its aesthetic and wanted to be the sole owner of the art. Once you bought it, you wanted to flaunt it all over your social media, so you linked your wallet to Twitter and loaded it as your avatar. You also did the same on Reddit. Who’s to judge? You’re proud of your latest expensive & rare purchase!
Now let’s assume that the image file is stored on Amazon Web Services, which for some reason had to close down, for the sake of the argument, let’s assume that the cost of maintaining storage servers exceeds their revenue.
Once the service closes down, your NFT is left without an image. The only thing you have to show for your $10,000 purchase is the metadata + ownership record with an expired link leading to a “404 page not found”. How would that make you feel? That is why urgent intervention is required for NFT art to be deemed sustainable.
So what can we do to fix NFTs?
There’s no way around it, they need to be fully decentralized. The entire NFT (Metadata, Ownership record, and Image) must be stored on the blockchain. That is the only method through which their long-term existence can be ensured.
Yes it can, even possibly in the near future. There already are solutions being developed to solve this problem, one of which is Drivechains by Everscale. These are decentralized storage devices built for the Everscale network. At its core, a drivechain is a workchain that is optimized in order to store large amounts of data. This can be used in order to store all NFT data on the blockchain, avoiding the need to use a centralized file-hosting service. With this solution, not only the metadata & ownership records would be stored on-chain, but the image file too, thus, achieving the initial goal behind NFTs (fully decentralized digital art) while providing the needed infrastructure for non fungible tokens.
This would solve multiple problems that NFTs face today. One of which is ownership. When you upload images to some services, you’re on some level providing them with rights to your image, as uploading any material to their service grants them a non-exclusive, royalty-free, perpetual, irrevocable worldwide license (with sublicense and assignment rights) to use, display, and in any present or future, create derivative works of your valuable artwork. This goes against all NFT ownership concepts set out by the crypto community. You actually may not own the image representing your MFT, and that’s a major concern.
The second problem Everscale’s drivechains solve is longevity. No longer will you depend on a file hosting service for the existence of your artwork. The blockchain is permanent, while a centralized service may not be. Files saved on a centralized service can be altered. If someone has access to a service’s server, the image can be replaced, edited, or even deleted, while data recorded on the blockchain is permanent and cannot be altered in any way. That’s because the blockchain was designed to be immutable, which was achieved by utilizing cryptographic hashes mixed with block interrelationship, making data entered on the blockchain permanent. NFTs have provided the art community as well as art lovers with a semi-decentralized infrastructure that has proven to be successful at making art relevant, especially for a generation of digitally-inclined users. The only thing left is to fix what’s wrong with this flawed system, and only then can we call NFTs ‘decentralized art’.