Featured image from Pixabay, Charts from TradingView.com
“Not your keys, not your crypto” has been many a crypto holders mantra over the years. Should we add “not your keys, not your NFT?”
Chatter has ramped up this year about NFTs – from the release of licensed Marvel comic book covers, to NBA athletes dropping six figures on Bored Ape NFTs, and everything in between.
What hasn’t been outlined through all of the madness? A deeper dive on NFT hodlers options when it comes to storage off of marketplaces.
Lay It All Out
One of the biggest selling points around NFT is that they are an established means of ownership via blockchains. However, what sort of options do consumers have when it comes to transferring NFTs off of the marketplace that they are purchased on? What type of cold storage solutions are available? Why is any of this important? These are some questions that arguably are not asked or discussed nearly as much as they need to be in the mainstream crypto conversation.
Before we jump into potential consumer solutions to some of these issues, let’s first cover some pertinent information.
NFT data is given it’s ubiquity (and thus to a large degree, it’s value) based on hashes on IPFS – or the InterPlanetary File System. IPFS is decentralized in it’s nature, allowing consumers to access files across the internet regardless of centralized storage. IPFS creator, Protocol Labs, also created Filecoin. The two protocols work hand-in-hand in storing and transferring verifiable data – with Filecoin handling the storage aspect.
More Data, More Problems
OpenSea, the largest NFT marketplace (and growing) to date, has for years supported NFTs with decentralized metadata since it’s launch. It wasn’t until just a couple months ago that the marketplace supported the ability for creators to utilize IPFS and Filecoin when creating on the platform.
Why is this important? Well, smart contracts on Ethereum-based tokens generate a function to locate the metadata. Most importantly, the value of that function is typically living on centralized servers (AWS, Google Cloud, etc). If the server goes down, your NFT might be hard to find. Also worth noting here is that these types of smart contracts leave the door open for developer modification.
Of course, each NFT project is likely to be a little bit different. CryptoPunks, for example, have a centralized mirror image with Larva Labs, so while image modification is still technically possible, Punks can be verified in the centralized server. With each unique NFT project comes a unique set of standards, so your mileage may vary.
Platforms like OpenSea also often offer “freezing” for NFTs. This allows users to freeze the metadata, which is irreversible and will lock the metadata permanently; your NFT metadata will then be around for as long as Ethereum and Filecoin are in existence.
Related Reading | NFTs In A Nutshell: A Weekly Review
Keep It Simple, Silly
Let’s get down to the brass tax of storage. Simply put, there is no one-size-fits-all choice when it comes to NFT storage. However, the most straightforward option here is a hardware wallet – simply because of how adjacent it is to traditional, fungible cryptocurrency cold storage. The leading external wallet that can support NFTs is likely Ledger – and will require an interface, like MetaMask, to display your NFT.
In recent months, Ledger even put out a dedicated internal posting on how to connect MetaMask and secure your NFTs on a Ledger Nano.
Some major cold storage solutions, like Trezor, do not support NFTs.
Ethereum is the dominant force behind the emergence of NFTs - but other blockchains may be looking to address other issues at a faster pace. | Source: ETH-USD on TradingView.com
There are of course a number of emerging options. One is Pinata, a cloud file-storage and retrieval service built for NFTs first. Pinata offers an IPFS API that allows data to be “pinned” to an IPFS node, signifying it’s importance, and easily accessed. This means that services like Pinata can “pin” your NFT data and make it easily, quickly, securely accessible. Consumers can even use multiple pinning services for data redundancy and increased confidence in the ability to access data.
Also in the conversation is Arweave, a unique new project that aims to store documents, data, and applications forever – the “permaweb.” Arweave is another leading decentralized digital option for consumers. Much like a traditional blockchain, Arweave has created the “data blockchain” which they call “blockweave.” Miners refer to data that was previously stored, in the same function that a blockchain would operate. Think of it as a community-maintained web archive and hard drive.
Finally, there is NFT.Storage. This new service is currently in beta, and supports NFTs on Filecoin and IPFS. NFT.Storage supports three different means of storage for NFTs and currently has a 32GB file size cap.
Beyond these traditional storage solutions, consumers should also consider other emerging blockchains that are adapting to address these needs. Enjin, for example, has developed Beam – a blockchain QR code solution for NFTs. As emerging projects develop, expect them to play more prominent roles with upcoming NFT projects.
As the space grows, we are likely going to see more software support tools to emerge. As always, stay safe, and happy NFT hunting!
Related Reading | Plenty Of Fish: OpenSea Dominates NFT Marketplace Volume