Right now NFTs are being sold for 10s of millions of dollars, but what exactly is being sold? What is on the blockchain and what is not on the blockchain?
For the vast majority of NFTs marketplaces the only thing that is saved on the blockchain is a token ID and a URL to the information about that token. This means for your $4,000 NFT what you purchased was something like this tokenID: 400, URL: https://google.databucket/id. and that’s is. If the URL were to die such as someone stop paying the bill or worse, someone changed what was at that URL all meaningful information about what the token is would be lost or changed.
This is actually a flaw in the NFT specification and has been argued about in much length. In one camp you have people who believe that some identifying information about an NFT is extremely important. On the other you have people who think it would be too expensive to mandate any information.
How can we combat this? It’s simple we must save a some meaningful data about what the NFT on the blockchain. The cheapest way to save meaningful information is to save a hash or digital signature of the data. A hash is a digest that is a boiled down string of characters that gets spit out when you run any large file through it. The large file will always produce the same hash. You can’t figure out what the file is from the hash, but if you have the original file you can run it through the same hash algorithm and get the same digital fingerprint.
Most of the big marketplaces, OpenSea, Rariable, Mintable, Nifty Gateway, do not save any hash or any identifiable information about an NFT so what you own is a token with a vague generic URL. At Ownerfy we do save this hash. It is something that needs to be baked into the NFT smart contract that stores the NFTs on the blockchain. We designed our smart contract with that that in mind. This means as long as the original image is maintained somewhere, anywhere. It could even be saved by the author then it can always be provable that this NFT image has not been changed and existed AS-IS at the time of the creation of the NFT.
There are other methods to attempt to improve authenticity. One is to use IPFS. IPFS is an alternate internet where files are shared based on their hashes. In this case the link is a hash that fetches the text JSON data for an NFT, not a hash of the image. So if the IPFS link, which is hosted privately stays active it can be proven that the text metadata has not changed. However this metadata would still only include a link to an image, which does not prove what the image is or was.
Only by saving a hash of the image itself with the token minting on the blockchain can we guarantee that an image existed at a certain time and is associated with that NFT. Ownerfy is the only platform currently that does this and will continue on to do it.
