Nonfungible tokens don’t live on the blockchain, experts say

Two experts say there are misconceptions about how nonfungible tokens, or NFTs, are stored. They are being advertised as blockchain-based technology. These experts argued that these tokens technically do not exist on the blockchain, but are stored elsewhere.

Cointelegraph interviewed Jonathan Victor, Protocol Labs’ Web3 storage lead, and Alex Salnikov (the co-founder of Rarible), about decentralized storage, investing in NFTs, and the future of the NFT market.

Victor says that main chains are small and can be expensive to store data on. Off-chain storage solutions have been introduced because of the large files of assets. He stated that NFT data can be stored anywhere, from a hosted node to decentralized storage networks.

Salnikov also spoke on the subject, stating that NFTs are still a relatively new concept and there may be many misconceptions about NFT storage. The blockchain confirms the transaction, but the file is stored somewhere else. He explained:

It is important to realize that the NFT in a user’s wallet does not point to the file it represents. The actual file, also known by NFT’s metadata is usually stored elsewhere.

The experts pointed out that NFT storage can still be considered to be decentralized. Victor explained that NFT.Storage uses decentralized storage networks such as Filecoin (FIL), and InterPlanetary File Systems (IPFS). This allows them to store NFTs in a public place, much like the internet archive. He stated that:

“Decentralization is something I love to think about. It’s not about whether there’s one point of failure. As long as we do it carefully, simply storing data off-chain won’t create centralization.

Salnikov also revealed that they used IPFS to store NFTs in Rarible’s NFT marketplace. To improve data integrity, Salnikov, co-founder of Rarible, said they integrated with NFT.Storage. This allows for both Filecoin and IPFS storage.

Related: Redditor transforms NFT criticism into NFTs

The experts were asked to predict the future of NFT. Victor believes there will be more NFT-based digital goods and more use cases. The upcoming merger on Ethereum (ETH), may also boost NFT prices. Salnikov, on the other hand, stated that their vision for the space is multi-chain. This is why they are trying democratize access to NFTs and storage.

The experts offered some advice when asked if investing in NFTs is a good idea. Victor advised investors to avoid putting themselves in a position where they might be forced sellers. Victor advised investors not to put themselves in a position where they would be forced to sell.

Salinkov also shared some things that he remembers, such as taking a step back to see the bigger picture. While there will always be market volatility, he explained that the NFT value is on the rise if you look at the bigger picture.

2021's Most Anticipated Growth & Wealth-Building Opportunity

Join Thousands of Early Adopters Just Like You Who Want to Grow Capital and Truly Understand Cryptocurrency Together

Jason Basler

Jason Basler– Financial Updates My Name is Jason Basler and I am also the main source from the ‘Topnewsscoop.com’ of all the exclusive and most delicate visualization of the activities in the business sector. My first step towards this journey was taken in the very early years of my life. I started with an independent financial consultant. However, I only had almost 4 years of skills and experience in this market. I have always been a free personality and like to fly one place to another, to explore more and more. Moreover, this passion and craze of traveling gave me a chance to report a section for best news associations. Last but not least, I am presently working full-time as an editor. Address: 4830 Crim Lane Dayton, OH 45402, United States of America Phone Number:  +1 937 727 7917 Email: [email protected]

2021's Most Anticipated Growth & Wealth-Building Opportunity

Join Thousands of Early Adopters Just Like You Who Want to Grow Capital and Truly Understand Cryptocurrency Together

Close Bitnami banner
Bitnami