One of the arguments put forward by the defenders of NFTs is that these tokens, being based on blockchain, allow them to free themselves from the rules of third-party platforms. However, the dependence on the markets where the NFTs are acquired is still present. To the extent that, as you are already seeing, many of the NFT tokens are becoming unavailable Because the servers of the websites where they are hosted have closed.
This is not the case with all NFTs and it is not an inherent problem with these tokens, but it is a sample of the different problems that are emerging as this tool becomes popular. A bad implementation that can leave investments of thousands of euros in nothing.
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The vast majority of NFTs may disappear in the next few years if the platforms go bankrupt
The usual mechanism of NFTs that are sold on platforms such as Niftygateway or Makersplace is to point to an internet URL or a IPFS hash. Typically, the NFT points to an IPFS link maintained by the company where the token was purchased.
As the user explains Jonty wareing, in the case of Beeple’s work sold through Nifty, the NFT token is for a JSON file hosted on the servers by Nifty.
Here’s an example. This artwork is by Beeple and sold via Nifty:https://t.co/TlJKH8kAew
The NFT token is for this JSON file hosted directly on Nifty’s servers: https://t.co/GQUaCnObvX pic.twitter.com/kMKmZrLTep
– Jonty Wareing (@jonty) March 17, 2021
This has a clear problem and that is that if Nifty were to fail, the token would lose its value since it would not point anywhere. And it is not something that can be changed, since is a value that is set like this during creation of the token.
According to the user, all the NFTs that use this system will be anchored to the platforms where they were sold. And hence, in case these platforms disappear, so will those tokens.
Another type of solution is the one used by Christie’s in the Beeple work sold for $ 69 million. In that case the NFT points to an IPFS hash. The user links to the metadata for this link, which are public. Some metadata that is hosted independently. Nevertheless, the metadata itself is linked to Makersplace. So, in practice, even though the IPFS solution would be more resistant to server changes, it still leaves the NFT tied to the platform as long as the metadata is defined that way.
An IPFS hash that the thread describes will only continue to display the metadata files as long as a node on the network continues to host them. That is, if the third-party platform stops working, the IPFS would surely stop working as well. Something that would already be happening, well different NFTs with IPFS have been found that are no longer hosted anywhere.
DAY 6 (144 hrs)
Random @IPFS file audit update of @niftygateway NFTs
🔴 Failed to load at all for @ 3lau @ozuna @grimezsz @troubleandrew @RAC @fewocious
🟠 Loading partially for @Steve Aoki @ deadmau5 @ SSX3LAU @toomuchlag_
🟢 100% loaded for @trevorjonesart @mariussperlich https://t.co/oWYkMcXzsb– Check My NFT 🔎 🖼️ (@CheckMyNFT) March 16, 2021
Considering that many of the NFT sales platforms are small companies, it is likely that in a few years many buyers will be surprised if these companies end up closing.
In contrast, the OpenSea platform has recently received a investment of 23 million dollars to strengthen their position as priority markets for NFTs. If consolidated, the NFTs sold through that site will offer an extra peace of mind to its users, but may mean the disappearance of other rival markets. And therefore many NFTs.
NFTs are experiencing great growth in recent months, but still there is room to improve its implementation. Today, in many cases insufficient guarantees are provided. And that should be an important wake-up call when the numbers being handled start to get so large.
In Engadget | Some buy a Picasso, others a tweet: the fever of the NFTs and its potential revolution of digital art (Clear the X # 131)
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The news
Many NFTs are built on a house of cards: if the server’s web goes offline, the tokens are broken
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