What are IPFS NFTs ? In NFT creation, blockchain is an excellent way to handle minting, bookkeeping, immutable metadata across multiple nodes. At the same time, it is difficult to store large amounts of data on the blockchain due to the high cost of replicating data among thousands of nodes in the network. Therefore, the necessity to store and secure NFT data off-chain marks the beginning and launch of IPFS (Interplanetary File System). IPFS can help solve these problems and ensure the durability and accessibility of NFT data stored on the decentralized network. IPFS is a peer-to-peer version-controlled file system and hypermedia protocol for storing and retrieving data.
NFT , NFT stands for file and NFT metadata Non-fungible tokens, or NFTs , are a special kind of crypto asset. Unlike fungible tokens, they are not fungible because each NFT has a unique on-chain signature. So it's no surprise that NFTs are being used to represent digital art and digital collectibles. However, it's worth pointing out that NFTs can represent any unique digital or physical item. This representation is usually done by assigning an NFT representation file to the NFT . However, it is important to note that these files are not stored on the blockchain. After all, this has economic and technical consequences, since blockchains were not designed to store large files. Instead, developers use cloud storage solutions to store files representing NFTs . IPFS is one of the best decentralized options for this purpose (more on that below). Also, after the files are properly stored, the developers fetch their URLs and add them to the NFT metadata. Additionally, the latter includes some other details about the NFT , usually in the form of a JSON file. Just like the files representing NFTs , developers tend to store NFT metadata files in the same way. Therefore, IPFS NFT metadata storage tends to be the most common solution. The actual detail contained in the NFT smart contract is a link to the NFT metadata ( URI ). Of course, smart contracts also include other standardized information. However, the exact details depend on the type of NFT ( ERC-721 , ERC-1155 , SPL , etc.). Finally, once Web3 developers deploy the NFT smart contract, they create (mint) the NFT . During this process, the on-chain transaction stores the NFT metadata link ( URI ) on the blockchain. What is IPFS ? The Interplanetary File System or IPFS is a distributed system for uploading, storing and accessing websites, applications, data and files. Furthermore, Protocol Labs developed this peer-to-peer (P2P) hypermedia protocol to preserve and grow human knowledge. After all, IPFS makes the web more resilient, scalable, and open. Additionally, as a P2P file-sharing protocol, IPFS enables users to host and access content in a decentralized manner. Additionally, user operators host a portion of the overall data, which creates a unique and innovative system for storing and sharing files or other content. Also note that IPFS is not location-based like traditional HTTP systems. Instead, it uses a content addressing strategy. Therefore, all content in the IPFS ecosystem has a unique hash value as a content identifier ( CID ). Therefore, IPFS users can find any file, website, data, etc. based on content rather than location. Essentially, in order to find specific data, IPFS utilizes a cryptographic hash unique to the requested content. Additionally, IPFS also identifies content by linking it together. How IPFS Works If you want a more in-depth look at how IPFS works, be sure to check out the documentation for the protocol. However, a quick understanding of the following three principles will help you appreciate IPFS NFTs : Identification through content addressing - with IPFS , content is found by "what's in it" rather than "where it is located". This is possible because every piece of content in the IPFS protocol has a CID (a unique hash of the content's origin). Content linking via DAG (Directed Acyclic Graph) - IPFS uses a Merkle DAG where all nodes have an identifier in the form of a hash of the node's content. Additionally, IPFS typically splits user content into parts of blocks to build a Merkle DAG representation. This means that different file parts can come from multiple sources and still be authenticated effectively. In a way, this is similar to using BitTorrent , which allows you to get files from multiple peers at the same time. Content Discovery via DHT (Distributed Hash Table) - IPFS uses DHT to find out which nodes are hosting the content queried by the user. Also, since a hash table is essentially a key-to-value database, a DHT is a table split across peers in a distributed network. So to find something, you need to query these peers. What are IPFS NFTs ? At this point, you know what NFT and IPFS are . So, you probably already have a solid understanding of what an IPFS NFT is . However, since the term " IPFS NFT " can be a bit confusing, it may not be enough to know what an NFT is and what IPFS means. Therefore, an explanation is needed. IPFS NFTs are not non-fungible tokens "owned" or "minted" by IPFS. Instead, the term " IPFS NFT " refers to all NFTs that use IPFS to store files representing NFTs , NFT metadata, or both . Also, in the same way, " IPFS NFT Metadata" focuses on NFT metadata files stored using IPFS . IPFS and NFTs : the relationship Most NFTs function by storing data off-chain. In NFTs , URLs are used to point to data somewhere on the internet. As you know, links may change, disappear, or take you somewhere completely different than you expected. Here's an example scenario from above: March 11 , 2021 , is the day Mike Winkelmann made history. Most people know him by the name Beeple , who sold the “ Everydays : The First 5000 Days ” NFT for $ 69 million . Imagine you bought that NFT and can access it via URL , the data is stored off-chain. You open the link expecting to see your beautiful NFT art, but what you see is: That would be a problem, especially since you just paid $ 69 million for it. Most of us wouldn't buy an NFT at anywhere near that price , but it could happen to anyone who buys an NFT regardless of its price . So, what's the easy solution? IPFS . As a network that uses cryptography and is related to the blockchain, your file doesn't come from a standard URL , and you can be sure it's always there, no matter what. For example, Beeple 's work is stored on IPFS , and many other NFTs use IPFS as primary or secondary storage. With IPFS , you use a network of different hosts to help store your files (as long as someone is hosting them on the network), rather than accessing content from a specific domain or server like plain HTTP . If you've heard of Filecoin , it's a coin mined by users who dedicate storage servers to the IPFS network and act as an incentive for hosts to keep the network up and running. Currently, it’s a bit murky as to who is responsible for storing NFTs — the artist or the buyer. Anyway, if you ever buy an NFT , I would recommend using IPFS to back up your files. Should you use IPFS for NFT storage? There are certain projects and NFT utilities that can actually provide additional value to users by using a centralized storage solution for NFT representation files and / or NFT metadata files. However, everyone involved in Web3 development should strive for an appropriate level of decentralization. Therefore, we believe that decentralized storage solutions are the way to go. When it comes to these solutions, IPFS is often the best choice. Now, before you start using NFT IPFS solutions, make sure you understand the main pros and cons of using IPFS for NFT storage. One of the main disadvantages of IPFS is that it does not store files permanently because it does not use blockchain technology. However, this is where Filecoin neatly complements IPFS . On the other hand, IPFS has some distinct advantages: Inefficient – IPFS ’s P2P system retrieves content from multiple nodes at the same time, which makes it very efficient. This can also save a lot of bandwidth. After all, increased efficiency helps reduce system costs. Resilience - IPFS provides a highly resilient system by simplifying the creation of networks for mirroring data. Additionally, IPFS content is self-versioning due to content addressing. Decentralization - Information censorship and single point of failure issues are at the heart of centralized storage solutions and Web2 in general. Therefore, the decentralized nature of IPFS eliminates these problems by providing a flat and open network. Availability - By facilitating the creation of a resilient network, IPFS enables more durable availability. For example, this increases connectivity in developing countries or those with slower coffee shop WiFi connections. How does IPFS store NFT data? IPFS is an open-source hypermedia protocol that allows peer-to-peer (p2p) decentralized data storage through: simplified sharing , censorship resistance , and easy retrieval . IPFS decides to move data around the web and uses its content address and its file versioning advanced functions and data structures to find what you ask for. The following three interdependent basic steps constitute a complete IPFS ecosystem. Step 1 : Content Addressing via Unique Identifier Once a user uploads NFT data on IPFS , they receive an IPFS hash of the content, known as a CID . A CID is a unique identifier or address used to refer to NFT data of content, regardless of how and where it is stored. CIDs are created from content. Therefore, using CIDs to reference NFT data prevents issues like weak links and rug pulling. IPFS follows specific data structure preferences, conventions, and IPLD , from original content to IPFS addresses, which uniquely identify content on the IPFS network . The next step is to explore how to embed links between content into the content address through the DAG data structure. Step 2 : Content storage and linking via DAG IPFS provides a decentralized data storage and retrieval method to preserve NFT data for a long time. The Persistence layer in IPFS uses cryptographic proofs to ensure the persistence and persistence of NFT data over time. In terms of NFT data links, IPFS uses a Merkle DAG optimized for representing directories and files . Merkle DAGs can be built in a number of ways . To build a Merkle DAG representation of stored NFT data , IPFS initially splits it into blocks. Splitting it into chunks means different parts of the file can come from different sources and can be authenticated quickly. Merkle DAGs also provide another important property: if you have two similar files, parts of different Merkle DAGs are used to refer to the same subset of data. It makes it easier to transfer different versions of large datasets (such as genomics studies or weather data). The reasoning behind this is that you only need to transfer the newly changed parts instead of creating completely new files each time. Therefore, the entire NFT data is linked and represented through Merkle DAG . Step 3 : Content retrieval via Distributed Hash Table (DHT) IPFS uses a distributed hash table to find which nodes host NFT data. A hash table represents a key-value database. This hash table is distributed across all peers in a distributed network, where libp2p handles connections and interactions between peers. libp2p queries the DHT to understand and find which nodes store each block that makes up the NFT data. Once you have found the content, you need to connect to that content ( NFT data) and retrieve it. IPFS uses the Bitswap module for this purpose to establish a connection with a peer and send a demand list (a list of all blocks containing the desired NFT data). After receiving the requested content blocks, they can be verified by hashing and comparing their CIDs . These CIDs also help with block deduplication. How does Libp2p support connection multiplexing? It is not easy to establish a connection and maintain its fee. With IPFS , Libp2p enables connection multiplexing between peers with high interoperability and eliminates the need to set up multiple connections differently for each service. The IPFS ecosystem creates CIDs for content and links them by generating an IPLD Merkle DAG . Content is retrieved using the DHT provided by libp2p , and users can then download it using a multiplexed connection. All of these are kept together by the middle part of the stack, linked by a unique identifier. How to use IPFS to store NFT digital collections ? IPFS has received a lot of attention because of its persistence, persistence and fixed characteristics. There has been a surge in demand for data management systems and storage with easily retrievable and secure CIDs , enabling users to adopt IPFS best practices. To ensure the storage security of NFTs , it is recommended to at least start using IPFS as a secondary backup. With IPFS , creators of NFTs can immediately reap the benefits of decentralized, immutable, and verifiable storage. Creators can seamlessly push content to IPFS to create an immutable link to the NFT metadata and ensure content is permanently stored. Blog Source - https://whatisblockchain.com/
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