NFTs, Are yours actually Non-Fungible? A look at NFTs and IPFS utility.
Hello again. I hope everyone is having an amazing day. Today I wanted to continue from yesterday and talk about NFTs! They are really the hottest buzz topic in the crypto-verse right now. People are buying anything from CryptoPunks to Zebras even racing horses.
Let's take a look at just what an NFT is. An NFT or non-fungible token is a minted asset on the blockchain. The “Non-Fungible” aspect of NFT is simply that the item is one of a kind, cannot be altered, and is identified on the blockchain as such. Let’s look at the Mona Lisa painting for example. There is only one original painting and a multitude of copies and duplicates. However, none of the copies hold anywhere near the same value as the original. Minting an NFT token is much like a certificate of authenticity for the item it is attached to.
A vast majority of current NFTs have a hash stored on a server often with a link to the item it represents. Ideally, these would not be able to change and would always be available at the related links. However, current NFT items are stored using URLs that only point to the locations of the items. Items can be changed or deleted altogether without affecting the hash or “token.” For instance, look at the story where an artist changed all of the images of NFTs he sold to rugs after he sold them. All he had to do was go to the URL that had the image file, upload an image of a rug, name it the same as the original file, and boom those NFTs are now worthless and altered.
Enter IPFS or in PAC Protocol’s upcoming YanDNA. IPFS minted NFTs cannot be altered since the IPFS protocol is content-based, not location-based. When a file is uploaded to IPFS the associated hash or “token” is created from the items data itself. Even the smallest change, like changing a comma to a period of a document alters the item's data and thus will need to create a completely new hash for that document. Conversely, you cannot duplicate the items either. This creates tremendous storage of value for NFTs as they are guaranteed authentic purely by the design of IPFS.
Another great aspect of IPFS vs current HTTP or URL-based storage is the availability of the item. HTTP or URL-based systems availability rely entirely on the host or server the data is stored on. Meaning if a host shuts down their server, or a catastrophic failure happens the item will no longer be retrievable. Since IPFS is a distributed storage system the likely hood of the entire ecosystem going down is highly improbable.
So, let me ask you something. If you purchased an NFT that is not on an IPFS network, do you really own the item associated with it? Do you own the location it is stored or the item at that location? Do you have control over the server hosting that data?
NFTs are changing the way art and entertainment are being consumed and delivered to the masses. The future use potential for NFTs is far beyond anything happening now. Imagine, individuals with an NFT authenticator for themselves, being able to sign contracts that cannot be changed or altered. Real estate and I mean actual real-world real estate could be minted into an NFT and the history of that property associated with the token could drastically improve the home buying process's speed and transparency.
The world and the way business is done is rapidly changing before our eyes. I firmly believe NFTs, IPFS, and quite frankly PAC Protocol’s YanDNA is going to play a very important role in the future for many aspects of our lives. In closing, I will leave you with this, Not IPFS, Not Your NFT. Thank you again for taking the time to read my posts.