DFINITY’s IC Blockchain Ensures Ownership and Decentralization of NFTs

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What are the Overpriced Google Drive Links for Many NFTs? And How the Internet Computer Finally Solves This Problem.

DFINITY is a key player in the blockchain industry. History will remember 2021 as the “Year of NFT” because of its popularity. This was driven initially by NBA Top Shot but quickly eclipsed by CryptoPunks, Beeple, Bored Ape Yacht Club and many others. NFT market capitalization was hovering around $330 million in 2020. One year later, news outlets reported that capitalizations had surpassed $41 billion. This is a remarkable growth rate for the industry in only 12 months.

NFTs have brought a new generation of participants to the crypto and blockchain space. New entrants are eagerly looking for the next Bored Ape project and dreaming about the riches that only crypto can offer. However, despite all the interest in NFTs, it’s likely that many participants still don’t have a clear understanding of the technology behind them and what they are buying when funds exchange for digital assets.

NFTs will continue to grow and mature over the next months and years. As the valuations associated with a small group of NFTs continue rising, it is more important than ever that individuals involved in these transactions understand exactly what they purchased.

Understanding what’s “Inside” an NFT

NFTs, in their simplest form, are simply smart contracts that have been filled with data and stored on a specific blockchain. These data could include digital art files, digital signatures and histories that are associated with the smart contract. A buyer of an NFT is effectively purchasing a smart contract with all its data on a specific blockchain.

Understanding the Technical Contents in an NFT is Important

Anybody who has ever participated in the selling, buying, or transferring of NFTs knows that these transactions can be very expensive. Users must pay gas fees in addition to the cost of the digital asset. These fees can sometimes amount to hundreds of dollars for the party that takes ownership of the asset. The cost of maintaining the NFT’s data is often overlooked by the public. This cost, which is usually maintained by the NFT issuer, can be very high depending on the NFT’s blockchain.

One gigabyte of data stored on the Ethereum blockchain can be stored for $240 million annually. While the Solana blockchain is more popular than Ethereum, it still remains out of reach for many people. It costs $840,000 per annum for the same storage.

Beeple, a digital artist, sold an NFT artwork entitled “Every day’s: The First 5,000 Days” last year for $69 million. The piece of art, 316,939.910 bytes in length, would have cost $72 million to store on Ethereum blockchain (at a price of 1GB = $240million) — more than the amount for the work. The same artwork would have cost $250,000 to store if Beeple had launched on Solana.

The result is that most tokenized digital artworks have NFT files that contain data that “points to” the actual file. This file is kept off-chain. This arrangement allows NFT participants to avoid having to store the actual files on-chain and still be able to buy, sell, or exchange the product.

Storing files off-Chain

Not only is it possible for NFT owners do not to know that some of the content purchased on their NFT does not exist in the NFT file, but also because NFT data stored off-chain can expose the NFT holder and increase the risk of centralization.

Imagine that digital artwork associated with an NFT is stored on a Google Web Services or Amazon Web Services server. Someone must pay the cost of renting and maintaining that server — this could often be the creators of NFTs. The creators may stop paying storage costs one day. After the servers are shut down and rented to another party, the link in the NFT file will point to nothing.

Another scenario is where Amazon or Google decides that they don’t want to support such activities on their infrastructure. These Web 2.0 giants could in a matter of seconds shut down the servers hosting this digital art, posing problems for the NFT because it points to a link that does not exist.

NFTs that do not store data on-chain run the risk of losing the underlying content. This is because they rely on central third parties to either continue to support IT infrastructure or pay maintenance.

DFINITY’s Internet Computer Solves This

Although Solana and Ethereum have been the most popular blockchains for NFT deployments over the past 12 months, there will be an increase in NFT projects launched on DFINITY’s Internet Computer blockchain.

Why?

DFINITY’s Internet Computer blockchain (IC) is the first to offer a truly decentralized NFT experience. DFINITY’s Internet Computer (IC) blockchain provides a fast and affordable way to process transactions, from decentralized launching platforms to the decentralized storage of NFT files.

IC is cheaper than other blockchains that require users to pay up to $9,999 per year for 1GB of data storage.

NFT creators will be more inclined to store data files directly on Internet Computer Blockchain because they’ll be incentivized to do so from a marketing, financial and operational standpoint.

This would save you a lot of money compared to storing on Ethereum or Solana and maybe even from centralized servers. Creators won’t have to worry about maintaining files off-chain and will be able to sell NFT files without any downtime. The ability to claim that an NFT and its contents are contained on the DFINITY Internet Computer Blockchain is a powerful marketing angle, especially in a world where most files remain off-chain. DFINITY makes it easy for users to not worry about files being lost or “shut down” and holders to know that DFINITY offers a level of security that is unmatched in today’s market.

DFINITY’s NFT Offers Continue to Build Momentum

DFINITY, the Internet Computer Blockchain and NFTs will be growing their presence in this important market as they continue to thrive into 2022. Origyn Foundation will be the first NFT marketplace to launch on the Internet Computer. NFT viewers are set to witness a new model in the digital asset space, thanks to investors such as Polychain Capital, Bill Ackman and Paris Hilton.

As more people enter the NFT space and learn more about NFTs and the data behind them, there will be greater demand for a decentralized, complete solution. DFINITY and its Internet Computer have been leading the charge in decoding what it means to own NFTs on the blockchain.

 

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