We have been talking for several months about terms that were relatively unknown until recently, such as the metaverse or NFTs . When we refer to the second, we are actually dealing with a virtual good with which we can trade on the internet.
In fact, there are many companies, as well as many end users, who are entering this sector. It is worth mentioning that the growth of the aforementioned NFTs since last year has been enormous. However, before entering into negotiations with these digital goods, we should know what we are really buying. This is precisely what we want to talk about in these same lines.
We must bear in mind that each sale of these virtual items is accompanied by an important warning that we must consider. And it is that we are actually buying a link to a file on someone’s server remotely. This means that, among other things, that link could change at any time. We can affirm that this is the way in which the aforementioned NFTs work, which could become a serious problem for their owners later on.
How buying NFT works
The meaning of these goods is Non Fungible Token , which basically means that it is unique. It is a unique piece of code on a chain of blocks like blockchain that we can buy and own. To give us an idea, that code points to works of art such as photographs or videos. Thus, many users are now displaying their collectible digital art. These have sometimes sold for staggering sums of money. This invites financial speculation similar to other cryptocurrencies, so it is largely unregulated.
Some may be surprised to discover that the works of art represented by NFTs are not stored on the blockchain. Instead, NFTs contain a link that points to a digital art file that can be a photo or video. All of this is hosted on a conventional web server. Its developer notes that the most common NFT standard is defined as an enhancement to Ethereum created in 2018. The standard has the option of using an image in the form of metadata for NFTs .
Thanks to the mechanism used, it is expected that many implementations will take advantage of it to provide independent metadata for each NFT. Thus, one of these assets represents the ownership of a house, or rather the metadata about the house, that is, its image, occupants, etc.
What is the future of these digital goods
So that we understand each other, when acquiring an element of this type corresponding to a work of art, the ownership or control of the work is not transferred . This means that when we buy an NFT of a work of art, we actually acquire a web link to it .
These digital items don’t even store a metadata image hash that would verify that the NFT points to the correct image or video. The reason the acquisition is not stored directly on the Ethereum blockchain is because they are extremely slow and expensive to store that digital data. Each byte is very expensive, which makes it impractical to store even small images, let alone the high-resolution images or videos that NFTs target.
Even if we had a lot of money and tried to store works of art on the Ethereum blockchain, it would take too long to load. All of this means that over time NFTs will break, specifically their bonds . Therefore, the design of NFTs is expected to change to a more robust model where images are stored in a distributed file system such as IPFS. But at the moment what we really buy is a somewhat fragile web link.