According to Jonathan Victor, just because data is stored off-chain doesn’t mean it is centralized. When it’s done carefully, it’s still decentralized.
There are misconceptions about how nonfungible tokens (NFTs), which are promoted as blockchain-based technology, are kept, according to two academics. Technically, they said, these tokens don’t exist in the blockchain and are instead kept somewhere else.
Jonathan Victor, the Web3 storage lead at Protocol Labs, and Alex Salnikov, the co-founder of Rarible, spoke with Cointelegraph about decentralized storage, the NFT industry’s future, and investing in NFTs.
Victor claims that because of the size restrictions on major chains, keeping data on the blockchain can be highly costly. Off-chain storage solutions are offered as a result of the huge file sizes of the assets. He claimed that NFT data may be stored anywhere, including distributed storage networks or hosted nodes.
Salnikov also commented on the subject, stating that as NFTs are a novel idea, there may be many misunderstandings regarding how NFT storage functions. He said that although the blockchain had verified the transaction, the file was not where it should be. He detailed this:
The experts pointed out that storage for NFTs may still be thought of as decentralized in spite of this. Victor cited the InterPlanetary File System and Filecoin (FIL) as examples of decentralized storage networks that their technology NFT. Storage uses to do this (IPFS). With this, they may store NFTs as a shared resource, much like the internet archive. He claimed:
Salnikov also revealed that NFTs were saved via IPFS in the NFT marketplace Rarible. However, the Raible co-founder said that they combined with NFT. Storage, which implements both storage on Filecoin and IPFS, to further strengthen data integrity.
The experts provided their projections for the NFT market’s future when asked. Victor predicts that NFTs will represent a greater variety of digital products and that new applications will emerge. He also thinks that the imminent Ethereum (ETH) integration might help NFT prices increase. Salnikov, on the other side, explained that their goal is to democratize NFT storage and access since they see the area as being multichain.
The experts offered some guidance when asked if it makes sense to invest in NFTs at this time. Investors were advised by Victor to avoid placing themselves in a position where they would be compelled to sell. NFTs are frequently less liquid, he claimed, and he urged investors to build their portfolios so they are not pressured into a fire sell.
Salinkov highlighted other reminders that he keeps in mind, such as taking a step back and seeing the larger picture. Although there will always be price fluctuation in the market, from a larger viewpoint, the NFT value is still increasing, he added.
