Chillax's Digital Playground: Navigating NFT Storage
Methods of NFT Storage: On-Chain, Off-Chain, and Decentralized Solutions
Non-fungible tokens (NFTs) may look like mystical, digital artifacts, but in reality, they're just data made up of 1s and 0s, similar to this article you're reading or a YouTube video you're watching. Just like other digital media, these 1s and 0s are stored on powerful computers we call servers.
But not all NFT storage is made equal. Some NFT owners might own only a URL or token ID, leaving them without the actual artwork. So, it's important to know how NFT storage works before diving into buying or creating one.
Before we delve deeper, here are some key concepts to understand:
- 💻 Servers - High-powered computers that run various programs simultaneously. NFTs reside and are stored on these servers.
- 🖼️ Hosting - A collection of services, usually run on servers, that includes storage for NFTs.
- Metadata - Data that provides information about other data, helping servers process and manage it more efficiently. For PFP NFTs, metadata includes the name, colors, size, shape, hat type, glasses type, and so on.
- 🔓 Hash - A cryptographic function that encodes information for verifiable and efficient storage. An NFT and its metadata can be stored in a single hash. You can get hands-on experience with hashing by checking out this hash generator.
- 📜 Smart contract - Encoded instructions that live on a blockchain, serving as the building blocks of decentralized applications (dApps), including most NFTs.
On-chain vs off-chain storage
Storing an NFT on-chain means inserting the entire NFT, including metadata and digital assets (like images), directly onto the blockchain. Off-chain storage means storing some or most of the NFT externally.
On-chain storage provides strong security and censorship resistance since the data is part of the blockchain ledger. However, it's costly, particularly for large files like high-resolution images or videos, and it has storage constraints due to gas limits. That's why only a few NFT projects choose this method of storage.
An example of an on-chain NFT is Autoglyphs. Due to the size of JPEG images, most NFT projects opt for off-chain storage, like CryptoPunks and Bored Ape Yacht Club.
Centralized vs decentralized hosting
In the case of off-chain storage, the smart contract contains information that points to an off-chain location where the actual NFT image is stored, often in a hash format. This hash can refer either to a centralized or decentralized hosting provider.
Centralized hosting providers, like Amazon and Google, run servers that store the 1s and 0s that make up the NFT. The main risk with centralized hosting providers is that they might shut down, potentially taking the owner's NFT with them. That's why many projects prefer to use decentralized solutions like the InterPlanetary File System (IPFS). IPFS is a distributed peer-to-peer network that stores files across multiple nodes, making them resistant to single points of failure.
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- Despite their digital nature, non-fungible tokens (NFTs) are essentially data made up of 1s and 0s, similar to this article or a YouTube video.
- Simply owning a URL or token ID does not guarantees ownership of the NFT's actual artwork, highlighting the importance of understanding NFT storage.
- Servers, high-powered computers that run various programs, store NFTs.
- Hosting services, run on servers, are a collection of services for efficient NFT storage.
- Metadata provides essential information about NFTs, helping servers properly manage them.
- A hash, a cryptographic function, encodes information for verifiable and efficient storage, allowing an NFT and its metadata to be stored in a single hash.
- Smart contracts, encoded instructions that live on a blockchain, serve as the building blocks of decentralized applications (dApps), including most NFTs.
- On-chain storage inserts the entire NFT, including metadata and digital assets, directly onto the blockchain, offering strong security and censorship resistance, but it can be costly and has storage constraints.
- Off-chain storage keeps some or most of the NFT externally, with the smart contract containing information pointing to an off-chain location, often in a hash format.
- Decentralized hosting solutions like InterPlanetary File System (IPFS) are preferred by many projects because they store files across multiple nodes, making them resistant to single points of failure and theoretically safer than centralized providers.
