Spooky NFT tricks: Now you see it, now you don't
Yesterday, the world woke up to an odd event. Facebook, Instagram, and WhatsApp are all offline because a Facebook employee sent a line of code that nuked their DNS. This is the thing that tells all the computers in the world where to find Facebook. In an instant, all of Facebook was gone.
This is a great moment to talk about the benefits (and limitations) of both centralized and decentralized technologies.
Maybe you have a Facebook profile and have been gleefully uploading all of your photos and other content. What happens when Facebook goes poof? Where do your pictures go?
Facebook is a centralized social media service, and all of the data you upload is placed on servers owned by Facebook. You only have the access to your content that Facebook allows, and that can be terminated at any time.
This is the case with any centralized app - either the application itself, or your permission to use the application - along with your user profile or any uploaded data - could simply disappear.
Enter decentralized apps and blockchain!
Because ownership is recorded on the blockchain, you can verify specific content belongs to a wallet address. Blockchain can be used to record ownership of all kinds of things: social media posts, game assets, art, and more. We discussed much of this in the first newsletter.
However, there are still a lot of cases where NFTs use centralized services, and this is a weakness for those projects. You may love playing blockchain games like Splinterlands, Zed.run, or Axie Infinity, but these games owe their existence to various centralized services.
For instance, the art for this Zed Run horse NFT is stored on Google’s cloud - see the image below. If the game fails, my horse will disappear. I’ll still have the record on the blockchain, but without the art or utility, I would own a worthless NFT.
Centralized services provide convenience and speed for NFT projects, and these tradeoffs come with risks. So if you’re either an NFT collector, or if you’re an artist who wants to produce NFTs, it’s really important to know where your art is being stored.
Storage solutions for NFTs
There are three possible ways to host NFT art:
On the blockchain
On decentralized servers
On centralized servers
Storing NFT art on the blockchain is by far the most permanent way to host your art. However, it’s not suitable for most applications because space on the blockchain is limited. Examples of projects with on-chain art are Avastars and On-Chain Monkey.
The second option is to use decentralized file storage. Interplanetary File System (IPFS) is a fully decentralized file hosting system. Unless incentivized, IPFS is slow. And if you want to guarantee your content remains on the network, you need to run your own IPFS node. For most artists, the idea of being a sysadmin isn’t too appealing. Thankfully, there are other solutions.
Arweave is a decentralized community project allowing you to host data permanently on both Arweave and IPFS for a one-time fee. Arweave has its own economy supported by the AR token. Here is a sample of a CardanoSounds NFT hosted on Arweave.
Pinata is an NFT hosting service that is somewhere between centralized and decentralized servers. Pinata takes care of running the IPFS nodes and has a tiered pricing plan. The free tier gives 1 GB of storage and API access, and is great for learning and testing. As with any hosted solution, Pinata has an acceptable use policy and follows US law, including DMCA.
Finally, NFTs stored on centralized servers are the least secure. Centralized servers provide speed, which is great for large files and streaming video. However, if someone neglects to pay the hosting bill…
Keep in mind NFTs are in a rapidly evolving stage, and what is hot today might not be hot tomorrow (or even exist). It’s easy to fall prey to FOMO - Fear of Missing Out. Patience is extremely important, and diligence in doing thorough research before buying into or creating your own NFT project.
Coming up this week: user Ed has requested a beginners guide to setting up crypto wallets, and I’ll be highlighting some more NFT news and projects. Do you have questions about NFTs or cryptocurrencies? Email tokensforgood@gmail.com!